New Year, New President,

New Trade Agenda?

John Murphy
U.S. Chamber of Commerce
Who Said It?

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We are absolutely going to keep
trading. I am not an isolationist I
want free trade, but its got to be
fair trade. Its got to be good deals
for the United States The fact
that Im negotiating trade will mean
that were going to make good
trade deals.

TRUMP 2016
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NAFTA has been devastating and
a big mistake We should use the
hammer of a potential opt-out as
leverage to ensure that we actually
get labor and environmental
standards that are enforced.

OBAMA 2008

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We need to crack down on currency
manipulation which can be
destructive for American workers.
China, Japan and other Asian
economies kept their goods artificially
cheap for years by holding down the
value of their currencies We need to
expand our toolbox to include
effective new remedies, such as
duties or tariffs and other measures.

CLINTON 2016
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 The Opportunity
and the
Challenge of Trade

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The Opportunity of Trade
GROWTH: Exports rose by 50% in 2009-
2014
Led by growth in exports to Mexico and
Canada, which topped $200B
JOBS: 41 million American jobs depend on
international trade
One-third of U.S. jobs created in those years
were in trade-intensive industries
MANUFACTURING: 1/2 of the 12 million U.S.
manufacturing jobs depend on exports
AGRICULTURE: 1 in 3 acres on U.S. farms
planted for export
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The Challenge of Trade

U.S. market largely open to imports, but

tariffs in developing countries much
higher
Its like going into a basketball game
down by a dozen points from the tip-off
Discriminatory regulations and non-tariff
barriers can make it even worse

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 The Solution?
New, Market-
Opening
Trade Agreements

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Trade Surplus?!

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 Others Moving Ahead

No. of FTA Partner Countries

70
60 58
60
50
50
40
30
20
20
10
0
Chile European Union Mexico United States

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Trump Administration Views

Competing power centers

Bannon VS Cohn

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Economic Nationalism

Infringements on sovereignty are bad

Gulliver and the Lilliputians
WTO
Global value chains are bad
Trade deficits are bad

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Trumps 7-Part Trade Plan

1) Withdraw from the Trans-Pacific Partnership

2) Appoint toughest, smartest trade negotiators
3) Crack down on violations of trade agreements
4) Renegotiate NAFTA or withdraw from it
5) Label China a currency manipulator
6) Challenge China subsidies, trade secret theft
7) Impose tariffs on imports from China if needed

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Withdraw from the TPP

The biggest betrayal in a long line of

betrayals where politicians have sold out
U.S. workers.
But the circumstances that led us to it
remain:
2/3 of worlds middle class consumers in Asia
They love made in USA products
But trade barriers keep our goods out
Intra-Asian trade pacts add to U.S.
disadvantage
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Manufacturing Concerns

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Manufacturing Concerns

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Renegotiate/Withdraw from
NAFTA
[NAFTA is] a disaster. ... We will either
renegotiate it, or we will break it.
Because, you know, every agreement
has an end
Threat to impose a 20% (or 35%) tariff on
imports from Mexico to balance deficit

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The Facts on NAFTA

JOBS: 14 million American jobs depend

on trade with Canada and Mexico
EXPORTS: $645 billion in U.S. sales to
our No. 1 and 2 export markets
MANUFACTURING: For manufactured
goods, the U.S. ran a cumulative trade
surplus with Canada and Mexico of more
than $70 billion over the past eight years
(2008-1015).
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Two Scenarios for NAFTA
Renegotiation
Quick and Light
Canadian dairy
Mexican yarn
Rules of origin for autos
Amendment to existing agreement
Full Bore
Managed trade targeting trade deficit
Two bilateral trade agreements

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Trumps China Pledges
1) Declare China a currency manipulator
2) Force China to uphold intellectual
property laws and stop their unfair and
unlawful practice of forcing U.S.
companies to share proprietary
technology with Chinese competitors as
a condition of entry to Chinas market
3) End Chinas illegal export subsidies and
lax labor and environmental standards

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Other countries/issues

Cuba
Russia
Iran
Ex-Im Bank

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Public Attitudes
toward Trade

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Trade Seen as Opportunity (74%), Not Threat
(23%)

February 1-5, 2017

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But Older, White, GOP-Leaning Men More
Negative
Free trade agreements between the U.S. and other
countries have been a __ for the United States

Good thing Bad thing

% %
TOTAL
Population 51 39

White men 40 52
18-29 56 35
30-49 41 51
Older,
50-64 34 63 white men
65+ 33 55 are
the most
opposed
to FTAs
Note: Whites include only those who are not Hispanic.
Source: Pew Research Center Survey, March 17-27, 2016.

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 Reuters/Ipsos Poll (October): Voters Favor
Clintons Trade Policies Over Trumps 43% to
37%

Poll taken in Michigan, Ohio,

Pennsylvania
The public agrees international
trade deals can help people by
lowering prices for goods
They doubt Trump can deliver on
promise to restore U.S.
manufacturing jobs.
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 NBC/WSJ Poll (July): 55% Say Free Trade is
Good
for America vs 38% Saying its Bad
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7% net
25 improvement in 8
months
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15

10

These bars
show the net
positive Dec. 2015 July 2016
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response
 But the Public Mostly
Doesnt Care About Trade

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 Trade Ranks at the Bottom of Voters
Concerns
Rating each a top priority for the president and Congress
-- -------------------------------------------
Bush-- Obama---------------------------------------------

2007 2009 2010 2011 2012 2013 2014 2015 2016

% % % % % % % % %
Defending against
80 76 80 73 69 71 73 76 75
terrorism
Strengthening nations
68 85 83 87 86 86 80 75 75
economy
Reducing the budget
53 53 60 64 69 72 63 64 56
deficit
Dealing with
55 41 40 46 39 39 40 52 51
immigration*
Protecting the
57 41 44 40 43 52 49 51 47
environment
Dealing with moral 47 45 45 43 44 40 39 48 -
breakdown in country
Dealing with global
38 30 28 26 25 28 29 38 38
warming+
Dealing with global
34 31
*Before 2014, question asked about illegal immigration. 32 34 38 31 28 30 31
+ trade issues
In 2016, question asked about global climate change.
Source: Pew Research Center Survey, January 7-14, 2016. Trade is almost always
last! 32
 Most Americans Dont Care About FTAs

Neither favor
nor oppose
FTAs

Washington Post Wonk Blog 33

Final Thoughts

A new dealmaker in chief

Where you stand is where you sit
Congress and Article I of the Constitution
Voice of business

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 John Murphy
Senior Vice President for
International Policy
U.S. Chamber of Commerce
jmurphy@uschamber.com

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