- - Wednesday, January 25, 2017


A few days ago, in two of his first acts as president of the United States, Donald Trump formally withdrew the United States from the ill-conceived Trans-Pacific Partnership, and served notice to Mexico and Canada that he would seek to renegotiate the North American Free Trade Agreement (NAFTA) to get a better deal for American workers. He was absolutely right to do so.

I served for 30 years on the House Foreign Affairs Committee and even longer in public service. For years, I opposed massive multilateral trade agreements that bit-by-bit ceded our constitutional authority and economic autonomy to international organizations like the World Trade Organization, or the United Nations Commission for International Trade Law. By ceding that authority we endangered our country’s long-term economic health.

For example, in the 1960s, 24 percent of American workers were employed in manufacturing, today only 8 percent. Manufacturing drives productivity, technology innovation and economic growth. The manufacturing sector historically has led the economy in productivity, which is essential to future economic growth and continually increasing living standards. When manufacturing jobs are replaced by service-sector jobs, overall productivity growth tends to slow which, in turn, slows economy-wide growth and wage gains.

In addition, a strong U.S. manufacturing base is essential for maintaining a strong national defense and homeland security. America’s defense capabilities rely on a strong industrial base. But the shift from domestic to globalized production and technology capacity has made the American industrial base more vulnerable to disruptions from international crises — including terrorism — than ever before.

Many experts say the shift away from manufacturing was inevitable. Perhaps, but if that’s true there is no doubt that bad trade agreements speed up the shift.

Beyond the loss of manufacturing jobs, the U.S. trade deficit — the world’s largest trade deficit — also poses great risks for the economy. No other industrialized. country runs trade deficits like we do, and we have since 1975.

Our trade deficit with our NAFTA partners currently stands at roughly $76 billion (Canada: $15.5 billion, and Mexico: $60.6 billion). Our trade deficit with China is a staggering $367 billion, almost 40 percent of our overall trade deficit. Why is this bad? Because in order to finance our trade deficits, the United States must borrow money abroad. China has been the largest holder of U.S. debt. But in the last few years, Beijing has been dumping U.S. government debt to prop up its currency, and stimulate its economy, including through increased military spending. Think about that: The string of artificial islands China is building in the South China Sea, which are increasing regional tensions and endangering vital shipping lanes, are likely being built with our money. This is not only a threat to that region of the world but to the United States and our interests as well.

Don’t get me wrong, I am not anti-trade. The reality is throughout history, long-term economic prosperity has come through trade and the economic activity that supports it. But I believe that free trade can only be beneficial to the United States if it is also fair trade.

As the world’s largest consumer market, I believe that we can achieve a more equitable trade balance through bilateral trade agreements. Only through bilateral trade agreements can we have the flexibility to reward those trading partners who maintain an equitable trade balance with the United States. Those trading partners (such as China), which use such things as tariffs and currency manipulation to gain huge trade surpluses, are hurting the American economy and are endangering American jobs. Mr. Trump understands this and is right when he says trade must be not only free but fair. In most cases, this can only be accomplished by bilateral trade agreements.

Former President Obama’s failed foreign policy of leading from behind proved that we should never seek the permission of other nations before defending America’s national security. Likewise, we should never seek the permission of other nations to defend the American economy and American workers. We should not kowtow to the World Trade Organization or any other unaccountable, unelected trade dispute organizations. We lose more than we win, and we will continue to lose to the detriment of our economy.

By putting America first — through appropriate tax incentives, strong bilateral trade agreements that encourage a fair balance of trade, and aggressive enforcement of trade agreements when our trading partners behave unfairly — we can strengthen the American economy, grow American jobs and ensure our future. President Trump is right.

Dan Burton is a former chairman of the House Foreign Affairs Committee.



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