Monday, August 8, 2016

What It Means to Have a Trade Deal That Puts America First

Congress can enact reform that would truly create "America First" trade policies. (Photo: Fabian Bimmer /Reuters/Newscom)
The new Republican Party platform suggests: “We need better-negotiated trade agreements that put America first.” Here are nine ways future trade agreements could really put America—or more specifically, Americans—first. Trade agreements should:



  1. Guarantee U.S. manufacturers have the freedom to buy low-priced inputs like steel and raw materials free of export duties imposed by foreign governments and import duties imposed by the U.S. government.
  2. Get rid of regressive, anti-family U.S. tariffs on clothing and shoes. The average import tax on shoes, fabric, clothing, and related goods is 11.3 percent. These goods provide nearly half of all U.S. tariff revenue, even though they account for less than 7 percent of U.S. imports.
  3. Reduce barriers that cause Americans to pay double the world price for sugar, making it difficult to continue to produce Oreo cookies and similar products in the United States.
  4. Give Americans the freedom to use foreign-built ships to transport goods within the United States, just like we can use foreign-built trucks and aircraft. Previous trade agreements have taken shipbuilding off the table.
  5. Encourage countries to get rid of subsidized government-owned enterprises like the Export-Import Bank and Fannie Mae.
  6. Promote the interests of U.S. car and truck buyers by eliminating the 25 percent U.S. tariff on imported pickup trucks.
  7. Focus on issues related to trade and commerce and not “monkey around with labor standards and environmental standards around the world,” as former Ways and Means Committee Chairman Bill Archer put it.
  8. Limit the use of anti-dumping tariffs to cases where predatory pricing exists. Anti-dumping policies are a form of cronyism in which politically connected industries have the legal right to impose unnecessarily high prices on American businesses and consumers, and which other countries use to block U.S. exports.
  9. Encourage governments to use the best-made products at the best prices instead of cutting deals with well-connected domestic interests. U.S. “Buy America” laws gouge taxpayers by limiting competition from foreign producers. They also encourage other countries to adopt “Don’t Buy American” laws to limit opportunities for competitive U.S. exporters.
There’s no need to negotiate new trade deals or renegotiate old ones to achieve these beneficial results. Congress could enact most of these reforms on its own. But as long as politically powerful special interest groups like sugar producers and shipbuilders continue to block beneficial reforms, well-negotiated trade agreements may be the most practical way to boost U.S. trade freedom.