Though the Democratic Party’s presidential nominee, former Secretary of State Hillary Clinton, once praised the Trans Pacific Partnership (TPP) as the “gold standard” of trade agreements, she has subsequently backed away from her earlier support. Clinton, like Republican nominee Donald Trump, has taken an increasingly hostile view toward free trade. In light of this disappointing development, NTU is not surprised by the negative treatment of free trade by the Platform.
Prior Trade Agreements
The trade section of the Platform laments that prior trade agreements have “not lived up to the hype.” This is inaccurate. Though often maligned by opportunistic politicians and labor unions, the North American Free Trade Agreement (NAFTA), for example, has been a success. Likewise, the Central American Free Trade Agreement – Dominican Republic (CAFTA-DR) has been a winner for American families and businesses. As a 2012 Congressional Research Service report on the Agreement said, “The data suggest that CAFTA-DR has supported a long-term trend in the region toward trade and investment liberalization, encouraging diversification into higher value-added, and in some cases, technology-enhanced goods. U.S. exports have grown, with gains in agriculture and more modest growth in manufactured goods.” Simply put, these two trade agreements have been good for American taxpayers and calls to withdraw from them are misplaced.
The Platform calls for strengthening and enforcing existing trade agreements, including “holding countries accountable on currency manipulation …” Like the Republican Platform, the Democratic Platform’s call to punish countries for alleged currency manipulation is ill-advised. If a country devalues its currency to encourage exports, it raises the price of items it imports from foreign countries. At the same time, forcing countries to raise the value of their currency could raise the prices of imported goods that families and businesses in the United States rely on. The economic impact of changes in currency value is a highly complex matter – currency manipulation does not provide a simple, clear-cut path to prosperity.