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  • Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

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April 11, 2018

New Trump Administration Trade Report Sticks to the Status Quo

The Trump administration’s recently released 2018 National Trade Estimate Report could become classic reading for political science students studying the “deep state” concept.

The 2018 report, which provides a 500-page compilation of policies in other countries that U.S. commercial interests claim are “trade barriers,” is remarkably similar to Obama-era editions of this congressionally-mandated annual report.

Yes, it was shocking that the Obama administration issued a report that labeled countries’ public health and environmental policies, food-labelling laws, and even religious standards as significant trade barriers. Sadly, this aspect of the report is not surprising for the new administration. 

But attacks in the report on other countries’ policies that reflect the new administration’s approach can only be explained by the reality that too many career trade-policy staff are rutted in pro-status-quo groupthink.

Exhibit A: A key administration demand in the North American Free Trade Agreement (NAFTA) renegotiations is to cut investor-state dispute settlement (ISDS). Administration officials have made clear that ISDS is considered a problem because it makes it less risky and costly to outsource jobs and because it undermines sovereignty. The ISDS system empowers foreign investors and corporations to skirt domestic courts and attack domestic policies by going before tribunals of three corporate lawyers to adjudicate claims. These extra-judicial international arbitration tribunals can order unlimited compensation be paid to investors by a host country’s taxpayers.

Yet this year’s report identifies as a barrier Mexico’s hydrocarbons law because it requires foreign companies to use the domestic court system in Mexico to arbitrate certain government disputes – rather than allowing foreign firms to use unaccountable international tribunals.

Along the same lines, the Trump administration is seeking to roll back NAFTA terms that require the waiver of Buy American and other domestic preference programs. But the report attacks Quebec’s requirement that 60 percent of the goods used in wind energy projects be sourced domestically as this “could pose hurdles for U.S. companies in the renewable energy sector in Canada.”

Jumping from NAFTA to other news headlines, another barrier listed is the European Union’s new privacy law. According to the report, the policy adds “new requirements for accountability, data governance, and notification of a data breach,” which may “increase administrative costs and burdens” for U.S. companies operating in Europe. Funny thing is that U.S. megacorporation Facebook, facing attacks on its lax safeguards, just announced it is adopting the European standard for its operations worldwide.

It bears noting that once again even public health policies designed to improve maternal and infant health are attacked as trade barriers in the report. That includes Malaysia’s proposed revisions to “its existing Code of Ethics for the Marketing of Infant Foods and Related Products” that would restrict corporate marketing practices aimed at toddlers and young children. Also, the report criticizes Hong Kong’s recent regulations governing the marketing of infant formula. Although acknowledging that the regulations are based on “World Health Organization guidance and purportedly voluntary,” the report parrots the food industry’s concern that Hong Kong’s new policies might become mandatory.

Other eyebrow-raising trade barriers? The report criticizes Malaysia – a predominantly Muslim country – for having certain restrictions on the importation of alcohol, and Brunei – another predominantly Muslim country – for requiring that non-halal foods be sold in specially designated rooms.

It remains to be seen whether future National Trade Estimate reports by the Trump administration will be consistent with the administration’s stated positions or the deep-state “trade-think” of decades of Democratic and Republican administrations past will prevail. Either way, we will be watching closely.

March 28, 2018

On Announcement of Revisions to U.S.-Korea Free Trade Agreement

Statement of Lori Wallach, Director of Public Citizen’s Global Trade Watch

WASHINGTON, D.C. – As the administration announced revisions to the U.S.-Korea Free Trade Agreement (FTA), Lori Wallach, director of Public Citizen’s Global Trade Watch, commented:

“Despite the touted 10,000 tariff cuts and promises of more exports, more jobs, our deficit almost doubled in the FTA’s first five years as U.S. agricultural exports declined and a flood of Korean cars were shipped here.

“It’s unclear how the proposed changes to the pact itself would reverse the doubling of our Korea trade deficit under KORUS, but the new currency agreement could make a difference if it has teeth, delaying the U.S. tariff cuts on Korean trucks could stop the big imbalance from getting even worse, and the parallel steel agreement is significant.

“The limited revisions to KORUS do not the promised new American trade agreement model make, which puts added pressure on NAFTA renegotiations to deliver a deal that eliminates the job outsourcing incentives in our past trade deals and adds strong labor and environmental standards with swift and certain enforcement.  

“Success on many key issues that were not addressed at all in this deal – such as the elimination of job outsourcing incentives and the controversial ISDS tribunals, the tightening of automobile rules of origin, and the addition of strictly enforced labor and environmental standards – will determine if a renegotiated NAFTA can get the bipartisan support necessary to get it passed.”

KORUS Outcomes: First Five Years

Despite the Korea FTA including more than 10,000 tariff cuts, 80 percent of which began on Day One:

U.S. exports to Korea declined 7.8 percent ($3.7 billion), and imports from Korea increased 13.1 percent ($8.1 billion) by the end of KORUS’ fifth year.

  • Since the FTA took effect, S. average monthly exports to Korea have fallen in nine of the 15 U.S. sectors that export the most to Korea, relative to the year before the FTA.
  • U.S. exports to Korea of agricultural goods have fallen 5.4 percent in the first five years of the Korea FTA, despite almost two-thirds of U.S. agricultural exports by value obtaining immediate duty-free entry to Korea under the pact. U.S. agricultural imports from Korea, meanwhile, have grown 45.4 percent under the FTA. As a result, the U.S. agricultural trade balance with Korea has declined 8.1 percent, or $554 million, since the FTA’s implementation. The Obama administration promised that U.S. exports of meat would rise particularly swiftly, thanks to the deal’s tariff reductions on these products. However, despite U.S. officials’ promises that the pact would enhance cooperation between the U.S. and Korean governments to resolve food safety and animal health issues that affect trade, South Korea has imposed temporary bans on imports of American poultry in each of the last three years, including 2017. Comparing the fifth year of the FTA to the year before it went into effect, U.S. poultry producers have faced a 78 percent collapse of exports to Korea – a loss of 82,000 metric tons of poultry exports to Korea. U.S. pork exports have also dropped 1 percent.
  • The 85 percent trade deficit increase with Korea under the pact – from $14 billion in the 12 months before the pact went into effect on March 15, 2012, to $26 billion in its fifth year – came in the context of the overall U.S. trade deficit with the world decreasing by 5 percent. While U.S. goods imports from the world decreased by 7.1 percent, goods imports from Korea increased by 13.1 percent.
  • During that period Korea’s GDP rose 15 percent, and the unemployment rate has averaged 3.4 percent, belying the claims from KORUS defenders that the growing deficit was fueled by weak growth and thus weak demand in Korea.  
  • The U.S. service sector trade surplus with Korea grew much slower since the FTA. In KORUS’ first five years, it increased by only $2 billion from 2011 to 2015, a growth rate of 29 percent, which is notably 64 percent slower than our services surplus growth over the five years before the FTA went into effect.
  • Record-breaking U.S. trade deficits with Korea have become the new normal under the FTA – in 59 of the 60 months of KORUS’ first five years, the U.S. goods trade deficit with Korea has exceeded the average monthly trade deficit in the five years before the deal.
  • The auto sector was among the hardest hit: The U.S. trade deficit with Korea in motor vehicles grew 55.7 percent in the pact’s first five years. S. imports of motor vehicles from Korea have increased by 64.2 percent, or $6.4 billion by the fifth year of the Korea FTA.
  • Exports of machinery and computer/electronic products, collectively comprising 27 percent of U.S. exports to Korea, have fallen 17.1 and 18.8 percent, respectively.

March 22, 2018

Public Citizen Report: ‘Follow the Money: Did Administration Officials’ Financial Entanglements With China Delay Trump’s Promised Tough-on-China Trade Policy?’

WASHINGTON, D.C. – As the administration is poised to announce long-awaited action on a China trade investigation launched last summer, Public Citizen released a report revealing Trump administration Cabinet members’ and top advisors’ longstanding personal financial entanglements with the Chinese government and government-connected firms. The report raises the question of whether the lack of action during President Donald Trump’s first year in office despite China being candidate Trump’s top target of trade wrath is better explained by the current or past Chinese financial entanglements of numerous top administration officials rather than an ideological battle over trade in the White House.

The report reveals the widespread business connections – some ongoing – between Trump Cabinet officials and other senior staff and Chinese government-run or connected firms that may have affected administration trade policies on China. For instance, despite pledging to divest from two Chinese shipping firms in which he was invested, U.S. Commerce Secretary Wilbur Ross’ financial transaction reports do not include the sale of an estimated $125 million stake in Navigator Holdings, which operates a fleet of liquefied natural gas (LNG) tanker ships that could benefit from several gas-related investment deals with Chinese government-linked firms that Ross announced since becoming Commerce secretary.

“The exits of White House Economic Adviser Gary Cohn and U.S. Secretary of State Rex Tillerson will significantly diminish the top staff with past or current significant financial stakes in China and with Chinese government entities, although Ross remains,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “Will changes in personnel lead to changes in policy with the recent trade enforcement actions paving the way to creation of the comprehensive new China trade policy that is decades overdue?”

Only on China trade were administration trade actions during Trump’s first year opposite of Trump’s campaign pledges and rhetoric. Even Trump’s bellicose China trade rhetoric from the campaign was replaced by an uncharacteristically subdued tone. Rumors have raged since Thanksgiving that the administration would impose punitive measures against Chinese technology theft via a Section 301 investigation that the administration initiated in August. But time and again, action was delayed.

During Trump’s China state visit, Ross gleefully touted Goldman Sachs’ new $5 billion joint fund with the Chinese government’s main investment arm and plans by other state-owned and state-linked firms to buy assets in sensitive U.S. infrastructure, energy and food sectors. Such investments may facilitate the Chinese government “Made in China 2025” plan to dominate the global economy but would seem antithetical to Trump’s promised “tough on China” agenda.

A review of the top-level staff of the Trump administration shows stark conflicts of interests not just relating to business in or with China, but with the Chinese government. These ties and conflicts include:

  • Previous or current ownership of shares in companies profiting from Chinese state-owned investment in the United States (Ross, Cohn, Treasury Secretary Steve Mnuchin, Trump Senior Adviser Jared Kushner);
  • Investments in companies doing business in China that may not have been divested at the time an official was engaged in policymaking that could impact his investments (Ross);
  • Co-investments with Chinese state-owned investors that may not have been divested at the time an official was engaged in policymaking that could impact his investments (Ross);
  • Previous direct ownership of stakes in Chinese state-owned companies (Cohn and Tillerson);
  • Ownership of businesses awaiting approvals for pending trademark applications in China (Ivanka Trump); and more.

The new report provides a compilation of information that is available about these links; many investments might not be disclosed as they may be held in investment vehicles in which the underlying assets are not known.

March 08, 2018

TPP-11 Countries Sign a Deal — While We Dodged a Bullet on ISDS Expansion Here, Our International Allies Face a Major Fight

Thanks to years of organizing, we in the United States saved ourselves from the corporate-dominated Trans-Pacific Partnership (TPP) by ensuring that the controversial deal was universally reviled across party lines and could never gain a majority in Congress.

But it is deeply unfortunate for our international partners that this week the remaining 11 TPP countries — including Canada and Mexico — signed the deeply flawed TPP model for their countries in a cynically renamed “Comprehensive and Progressive Trans-Pacific Partnership.” We know from our years-long, internationally-coordinated TPP campaign that our sisters and brothers in those nations fought against the corporate-rigged TPP model as hard as we did. We stand in solidarity with them as they continue to mobilize to block the ratification and implementation of this TPP-11 deal in their countries.

While some of the most egregious provisions pushed by Big Pharma that would have further threatened access to life-saving medicines were fortunately set aside (for now) in the revised TPP-11 deal, most of the TPP’s dangerous rules remain intact. It is shocking, for instance, that Canada, Mexico and others agreed to maintain the infamous investor-state dispute settlement (ISDS) system (with only some minor tweaks), that empowers multinational corporations to attack public interest laws before panels of three corporate lawyers.

We dodged a bullet here in the United States — the TPP would have doubled U.S. exposure to investor-state attacks against U.S. policies by newly empowering more than 1,000 additional corporations in TPP countries, which own more than 9,200 additional subsidiaries in the United States, to launch investor-state cases against the U.S. government.

But, it is beyond perplexing that Canada and Mexico would agree to expand their liability to these ISDS attacks on their laws in the TPP-11. In the North America Free Trade Agreement (NAFTA) renegotiations, the United States has proposed to radically roll back ISDS, which should be good news for Canada and Mexico, since Canadian and Mexican taxpayers have paid $392 million to mostly U.S. corporations who won ISDS attacks against their public interest laws using NAFTA.

The corporate lobby, which has been doing all it can to block the positive NAFTA proposal to roll back ISDS, is undoubtedly rejoicing that the TPP-11 countries have signaled their willingness to accept expansion of the controversial ISDS system.

But the diverse consensus to end ISDS in NAFTA and elsewhere spans the political spectrum, with stark criticism coming from voices as disparate as U.S. Supreme Court Chief Justice John RobertsReagan-era associate deputy attorney general Bruce Fein, the pro-free-trade libertarian Cato Institutethink tank, U.S. Senator Elizabeth Warren (D-Mass.)Nobel laureate economist Joseph Stiglitzunions and environmental groups.

We will continue to push to remove ISDS from NAFTA and support our allies in Canada, Mexico and in the other TPP-11 nations as they fight ISDS expansion.

February 27, 2018

In Memory of Zahara Heckscher

Zahara_HeckscherAll of us at Public Citizen lift up in loving memory our dear friend and peaceful warrior Zahara Heckscher, who passed away on February 24 at the age of 53, after her years-long battle with breast cancer. 

Among her many talents as a writer, poet, teacher and facilitator, Zahara was a fierce, creative and committed activist. As she valiantly battled advanced breast cancer, she became determined to fight for all patients to have access to the cutting-edge cancer medicines that extended her life. 

When she learned that prescription drug companies were using the Trans-Pacific Partnership (TPP) negotiations to lock in extended monopolies that threatened access to affordable medicines, Zahara became a passionate trade justice advocate on behalf of cancer patients around the world. 

She galvanized testimony from people living with cancer and HIV/AIDS from the United States and other TPP countries to protest what she dubbed the “TPP death sentence clause” — a provision that would require governments to grant monopoly periods for biologic medicines used to treat cancer and other serious illnesses and thus deny patients access to more affordable generic and biosimilar medicines.  

The battle over biologics and access to cancer treatment was responsible for dragging out TPP talks for years. In October 2015, she carried those patients’ stories with her to the final round of TPP negotiations in Atlanta to demand that the TPP negotiators drop the “death sentence clause”. She was arrested as she attempted to enter the negotiations, holding an IV-pole, calling on the U.S. Trade Representative (USTR) to drop its insistence on demanding the extended monopoly period for biologic medicines. 

The video of her arrest was shared widely on social media, and her subsequent media interviews on Democracy Now, The Big Picture and others contributed to the national conversation about the dangers of the TPP for health. Due in part to the advocacy of public health advocates like Zahara, the pharmaceutical industry and USTR failed to convince the other TPP nations to accept the full twelve-year monopoly they had been demanding, but the final TPP did include a five-year period.

Zahara insisted that cancer patients cannot wait even one additional year for access to medicines that can keep them alive, so she turned her efforts to stopping Congress from ratifying the TPP.

On World Cancer Day in February 2016, she and fellow cancer survivor Hannah were arrested blocking the entrance to PhRMA, the pharmaceutical industry’s lobby that had pushed the TPP death sentence clause, to warn the public and Congress about TPP’s dangers for access to cancer medicines.  Together, Zahara and Hannah then co-founded Cancer Families for Affordable Medicines, creating public education and advocacy materials for cancer patients and their loved ones to support access to medicines by convincing their members of Congress to vote no on the TPP. 

As the pressure on Congress to pass the TPP mounted in the summer of 2016, Zahara took her message directly to Capitol Hill, getting arrested a third time at the office of Congressman Polis, and traveling to speak in-district to undecided members of Congress to demonstrate what was at stake in the TPP for cancer patients and their loved ones. Despite the fact that TPP passage was a top priority of the White House, Republican congressional leadership and Chamber of Commerce, the district-by-district activism by people like Zahara ensured that the TPP could not achieve majority support in Congress.

In the last year, Zahara’s waning physical strength did not stop her from continuing her trade justice activism. Concerned by reports that the Trump administration was pushing for the same “death sentence clause” in its renegotiations of the North America Free Trade Agreement (NAFTA), just last month, Zahara made an educational video to urge people to take action to ensure that NAFTA renegotiations not further undermine access to essential medicines.

Until the very end, Zahara used every tool at her disposal — from her razor-sharp intellect to her poetic spirit to even the cancer itself — to bless the world and to change it for the better. Her strategic and creative trade justice activism was just one small piece of her multi-faceted legacy. She was an inspiration. We will miss her dearly.

February 23, 2018

Mexico City NAFTA Renegotiation Round: If No Progress on Major U.S. NAFTA Reform Proposals, What is Path Forward?

WASHINGTON, D.C. – As the seventh round of North American Free Trade Agreement (NAFTA) renegotiation talks begin in Mexico City this weekend, Lori Wallach, director of Public Citizen’s Global Trade Watch, commented:

“A NAFTA replacement deal that would enjoy bipartisan congressional support is entirely possible because U.S. negotiators have stood up to the interests trying to thwart real change and have resolutely pushed proposals to cut NAFTA’s job outsourcing incentives and the ISDS tribunals where corporations can attack our laws and to add stronger rules of origin and an accountability-injecting sunset clause.

With time running short, the question is whether some of these U.S. proposals to restructure NAFTA can be agreed upon in Mexico City and progress made on adding strong labor and environmental standards with swift and certain enforcement to stop companies from moving U.S. jobs to Mexico to pay workers poverty wages and dump toxins and then import those products back for sale here.”

The State of Play as the 7th Round of NAFTA Renegotiations Talks Begin

Two major related questions loom over the seventh round of NAFTA renegotiations that will be begin this weekend: the timeline and whether the three countries can make progress on the elements of a deal that will be necessary for it to get through the U.S. Congress.

The extended end-of-March deadline that the NAFTA countries set for completing a deal is fast approaching, as is the July 1 Mexican presidential election.

The U.S. corporate lobby has battled against the proposals that U.S. Trade Representative (USTR) tabled at the October NAFTA round to restructure NAFTA’s investment, procurement and rules of origin terms and to add higher rules of origin and a review and sunset provision. Not surprisingly, given these changes are necessary both to deliver on President Trump’s campaign promises on NAFTA and to achieve a deal that can get through Congress, the administration has not budged on these proposals.

For most of 2017, both Mexico and Canada simply refused to engage on the main U.S. demands, which was the corporate lobby’s advice. In late December Mexico shifted course, perhaps recognizing that ignoring priority U.S. NAFTA reform proposals actually would not make them go away.

Now with the window of opportunity closing to get a deal before Mexico’s election season kicks into high gear, will agreement be reached in Mexico City on any of the core U.S. reforms? Doing so could pave the way to the sorts of grand bargains that get trade deals done. And given that the United States launched the renegotiations with specific goals in mind, if the changes needed to deliver on those goals remain deadlocked, what is the path forward to any deal - much less one that achieves the bipartisan support needed to ensure passage?

Not surprisingly, the administration is seeking a deal that counters NAFTA’s job outsourcing trend and appeals to the Democratic-swing voters in Midwestern states that sent Trump to the White House – and the unions to which many of them belong. And, certainly this administration does not want to repeat the Obama administration’s strategic blunder of agreeing to a deal that cannot achieve majority support in Congress despite months of intense lobbying a la the Trans-Pacific Partnership.

Agreement on the U.S. proposal on NAFTA’s controversial investment chapter and its Investment-State Dispute Settlement (ISDS) system could be the key to unlocking the impasse. ISDS is unpopular in Congress, not only with Democrats but with a sizeable bloc of GOP committed to opposing any pact that includes ISDS. Progressive and conservative organizations and unions have long held the same view.

ISDS has become a third rail issue because it both promotes job outsourcing and undermines what conservatives call sovereignty and progressives call democratic governance.

The substantive investor protections ISDS enforces operate like no-cost risk insurance and combined with access to a pro-investor dispute resolution regime outside domestic courts, eliminate many of the usual risks and costs that make corporations think twice about moving production to a low-wage developing country like Mexico. More than 930,000 specific U.S. jobs have been certified by the U.S. Labor Department as lost to NAFTA outsourcing and import floods under just one narrow program called Trade Adjustment Assistance (TAA).

Meanwhile, the GOP-majority, the National Conference of State Legislatures, the National Association of Attorneys Generals, the National Association of Countries and the League of Cities all oppose ISDS as a threat to sovereignty. No doubt. The regime grants new rights unavailable in U.S. law or courts to thousands of foreign corporations to sue the U.S. government before a panel of three private-sector lawyers. These lawyers can award the corporations unlimited sums to be paid by American taxpayers, including for the loss of expected future profits. These foreign corporations need only convince the lawyers that a U.S. law or safety regulation or court ruling violates their NAFTA rights. Their decisions are not subject to appeal and the amount awarded has no limit.

Even conservative U.S. Supreme Court Chief Justice John Roberts has weighed in on the ISDS sovereignty threat in his dissent in BG Group PLC v. Republic of Argentina. In that 2014 case, the majority ruled in favor of the enforceability under U.S. law of an ISDS tribunal’s ruling. Roberts decried the notion of a country allowing an extra-judicial international tribunal to “… review its public policies and effectively annul the authoritative acts of its legislature, executive and judiciary … a Contracting Party grants to private adjudicators not necessarily of its own choosing, who can meet literally anywhere in the world, a power it typically reserves to its own courts, if it grants it at all: the power to sit in judgment on its sovereign acts.”

Unless the Unites States joins the growing number of countries extracting themselves from ISD agreements, it’s just a matter of time before the United States loses a case. The number of cases being filed and the types of laws, government decisions and court rulings being attacked through ISDS is expanding. There were 50 total ISDS cases from the 1950s to 2000. In recent years, more than 50 cases are filed annually. Almost half a billion dollars has been paid out so far by Canadian and Mexican taxpayers just under NAFTA and $36 billion in additional known claims is now pending under NAFTA. (Because a lot of these cases result in governments changing laws or paying off foreign corporations before the cases get to the stage where they get listed publicly, many cases remain unknown.) And increasing large developed countries are facing ISDS attacks, with Germany paying out tens of millions thanks to two cases. 

The intensive focus of the corporate lobby on saving ISDS in NAFTA has verified that these investor privileges and protections that facilitate outsourcing, not any actual trade terms, are what the corporate lobby most values about NAFTA. Yet, for all the claims and hype about ISDS somehow being necessary for U.S. investors’ success, the reality is that if they are worried about investing in Mexico, they can buy risk insurance so it’s their skin in the game not the U.S. Treasury’s. And, if firms investing in oil, gas or mining concessions in Canada or Mexico want ISDS-style protections, they can include in their concessions contracts with those governments’ terms sending disputes to the same UN and World Bank arbitration venues that NAFTA uses. That would provide U.S. firms the same protections in Mexico or Canada that NAFTA now provides them, but it would not empower Mexican or Canadian investors – or Japanese or Chinese firms incorporated in Mexico or Canada – with investments in the United States to use ISDS to attack U.S. policies.

February 07, 2018

New Trade Deficit Tracker

Public Citizen’s Global Trade Watch launches new Trade Deficit Tracker. Contrary to candidate Donald Trump’s pledge to speedily reduce the U.S. trade deficit, in Trump’s first year in office the goods trade deficit is larger than any time since 2008 and up 5 percent overall even in inflation-controlled terms from last year, with a significant jump in the China trade deficit and a 8 percent increase in the North American Free Trade Agreement deficit. Trump has not exercised his available executive authority to fulfill campaign pledges to limit imports, including those from firms that outsource jobs; label China a currency manipulator; revoke trade agreement waivers on “Buy America” procurement policies that outsource U.S. tax dollars to purchase imports for government use; or limit government contracts to firms that outsource jobs.

The overall 2017 U.S. goods trade deficit in inflation-controlled terms was $796 billion in 2017, up 5.4 percent or $40.9 billion from 2016, which was led by a U.S.-China goods deficit of $375 billion in 2017, up 5.5 percent and $19.5 billion from 2016. The 2017 U.S-NAFTA goods trade deficit was up 7.8 percent or $13.8 billion from 2016.

To document the significant increase in U.S. trade deficits under the Trump administration, Public Citizen’s Global Trade Watch has launched a new tracker. The tracker visualizes and tracks significant developments related to U.S. trade deficits with NAFTA partners (Canada and Mexico), and China respectively. Click here or on the image below to visit the tracker.

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www.citizen.org/our-work/globalization-and-trade/trumps-trade-deficit

February 06, 2018

Trade Deficit Up 5 Percent in Trump’s First Year, Raising Stakes for Quick NAFTA Replacement Deal that Stops Outsourcing, China Trade Action

With Trade Policy Unchanged in Trump’s First Year, Outcomes He Attacked Continue

WASHINGTON, D.C. – Contrary to candidate Donald Trump’s pledge to speedily reduce the U.S. trade deficit, in Trump’s first year in office the goods trade deficit is up 5 percent overall from last year, with the China trade deficit larger than last year and a 8 percent increase in the North American Free Trade Agreement deficit. Trump has not exercised his available executive authority to fulfill campaign pledges to limit imports, including those from firms that outsource jobs; label China a currency manipulator; revoke trade agreement waivers on “Buy America” procurement policies that outsource U.S. tax dollars to purchase imports for government use; or limit government contracts to firms that outsource jobs.

“Right now, the same trade policy that Trump attacked ferociously and promised to speedily replace is still in place,” said Lori Wallach. “The first-year Trump jump in the U.S. trade deficit adds urgency to the administration actually securing a NAFTA replacement deal that ends NAFTA’s job outsourcing incentives and implementing a new China trade policy.”

The overall 2017 U.S. goods trade deficit was $796 billion in 2017, up 5.4 percent or $40.9 billion from 2016. The U.S. trade deficit is now larger than at any time since 2008. This was led by a U.S.-China goods deficit of $375 billion in 2017, up 5.5 percent and $19.5 billion from 2016. The 2017 U.S-NAFTA goods trade deficit was up 7.8 percent or $13.8 billion from 2016.

“It’s not surprising that the deficit is up, because in year one there has been a wide gulf between Trump’s fiery trade rhetoric and action. So the same failed trade policy Trump attacked as a candidate is still in place, outsourcing continues and promised actions remains undone,” Wallach said. “The Trump administration has made some good proposals to transform NAFTA, but the corporate lobby is so intent on blocking those changes that it has delayed – and could – derail the whole process. And so far, the administration has not implemented the comprehensive new approach to our China trade policy that is needed.”

China Trade: Trump reversed his pledge to take action on his first day on currency issues and has achieved little since to expand U.S. exports to China or limit Chinese imports here. Nor has he followed through on promised actions to limit Chinese steel and aluminum imports using section 232 of the Trade Expansion Act of 1962. Also outstanding is action on a Section 301 petition on China the administration initiated in mid-2016.

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U.S.–NAFTA Trade: Between 2011 and 2016, the U.S. goods trade deficit with NAFTA nations declined 11.6 percent, or $23.2 billion (excluding re-exports). This decline has been consistent except for a small 2.9 percent increase in 2014. The U.S. NAFTA goods trade deficit is now mostly manufactured and agricultural goods. Fossil fuels have declined as a share of the total deficit from 82 percent in 1993 before NAFTA to 16 percent in 2016.

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January 05, 2018

Trade Deficits Up in Trump’s 11 Months in Office; Rather Than Promised Speedy Reduction, 2017 Deficit Will Be Larger Than in 2016

Pressure Mounts for Trump to Deliver on Trade Pledges as Korea Trade Pact Renegotiation Talks Open in D.C. and NAFTA Talks Head to Showdown in Montreal Later This Month

WASHINGTON, D.C. – Today’s November trade data release shows the U.S. trade deficit with Canada and Mexico is 7.9 percent higher and with China is 5.1 percent higher during the first 11 months of the Trump administration compared to the same period in 2016, spotlighting the gap between President Donald Trump’s campaign pledges to speedily reduce the U.S. trade deficit and the lack of trade policy reforms achieved in his first year. The 2017 11-month China deficit is $352 billion, Mexico is $116 billion and Canada is $59 billion, respectively, compared with $335 billion, $110 billion, and $52 billion, respectively, at the 11-month mark in 2016.

Overall, the North American Free Trade Agreement (NAFTA) deficit has grown during the first year of the Trump administration after seeing a progressive decline from 2011 to 2016, while the China trade deficit continues its upward trajectory.

“The growing trade deficits and related lost jobs stands in stark contrast to Trump’s promised speedy reduction of our trade deficit by transforming our China trade policy and securing a better NAFTA deal,” said Lori Wallach, director, Public Citizen’s Global Trade Watch. “The administration has made some good proposals to transform NAFTA, but the corporate lobby’s efforts to block those changes may derail the whole process, and so far the administration has taken no action on China trade at all.”

Since that pact’s implementation in March 2012, U.S. exports to Korea have declined, while U.S. imports from Korea have increased, resulting in a large goods trade deficit increase of 85 percent in the pact’s first five years in effect. Today’s data shows that the U.S.-Korea trade deficit remains higher than before the agreement went into effect.

Trump launched the promised NAFTA renegotiation in August, but U.S. corporate interests have persuaded Canada and Mexico to not engage on U.S. proposals to transform NAFTA in ways that U.S. unions, small businesses and consumer groups have long argued would slow job outsourcing and downward pressure on U.S. wages. As a result, the January 23-28 Montreal round of NAFTA talks has become a pivot point. If Mexico and Canada do not engage, the prospect is heightened that Trump may give notice to withdraw from NAFTA. NAFTA entered its 24th year on Jan. 1, 2018.

With respect to China, Trump reversed his pledge to take action on his first day on currency issues and has achieved little since to expand U.S. exports to China or limit Chinese imports here. Trump also has not exercised his authority to revoke trade agreement waivers on “Buy America” procurement policies that outsource U.S. tax dollars to purchase imported goods for government use. Nor has he followed through on promised actions to limit Chinese steel and aluminum imports using section 232 of the Trade Expansion Act of 1962. Also outstanding is action on a Section 301 petition on China the administration initiated in mid-2016.

U.S. – NAFTA Trade

Between 2011 and 2016, the U.S. goods trade deficit with NAFTA nations declined 11.6 percent, or $23.2 billion. This decline has been consistent except for a small 2.9 percent increase in 2014. During Trump’s first 11 months, however, the U.S. goods trade deficit increased 7.9 percent, or $12.8 billion relative to the same period in 2016. The U.S. NAFTA goods trade deficit is now mostly manufactured and agricultural goods. Fossil fuels have declined as a share of the total deficit from 82 percent in 1993 before NAFTA to 16 percent in 2016.

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View graphic covering NAFTA trade deficit data over longer timespan.

The full-year trade data (January–December) show a similar trend. After the Great Recession, the NAFTA deficit hit its peak in 2011 but has been decreasing gradually each year, with a small increase in 2014.

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 U.S. – China Trade

The U.S. goods trade deficit with China has increased every year since 2009, except for an insubstantial decrease in 2016. Under the Trump presidency, that small deficit reduction has been reversed, and the goods trade deficit is now rising again.

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View graphic covering U.S.-China trade deficit data over longer timespan.

December 05, 2017

New Trade Data Shows Marked Rise in Deficits During Trump’s First 10 Months, Spotlighting Urgency of Successful NAFTA Renegotiation, Action on China Trade

2017 Trade Deficits With NAFTA Countries and China on Track to Surpass Large 2016 Deficits – Instead of Speedy Deficit Decreases Trump Promised

WASHINGTON, D.C. – Contrary to President Donald Trump’s campaign promises to speedily reduce the U.S. trade deficit, the deficit with Canada and Mexico is 9.4 percent higher and with China 4.1 percent higher during the first 10 months of the Trump administration relative to the same period in 2016, according to the Census Bureau’s goods trade data released today. The North American Free Trade Agreement (NAFTA) deficit in the first year of the Trump administration is on track to reverse a steady decline from 2011 to 2016 of 11.6 percent, or $23.2 billion, while the China trade deficit looks to resume its steady growth since 2009 after a brief decline in 2016.  

Candidate Donald Trump promised quick action to balance the large and persistent U.S. trade deficits with China and the NAFTA nations. “We have a massive trade deficit with China, a deficit that we have to find a way quickly, and I mean quickly, to balance,he said.

While Trump launched renegotiation of NAFTA in August, he reversed his pledge to take action on his first day in office on China trade and has achieved little since to expand U.S. exports to China or limit Chinese imports here. He also has not exercised his authority to revoke trade agreement waivers on “Buy America” procurement policies that outsource U.S. tax dollars to purchase imported goods for government use. Nor has he followed through on promised actions to limit Chinese steel and aluminum imports using section 232 of the Trade Expansion Act of 1962.

“Candidate Trump slammed our huge trade deficits and related lost jobs and lower wages, and promised a speedy fix, but almost a year into his presidency, no major policies have changed, and now Trump owns trade deficits even larger than last year’s,” said Lori Wallach, director, Public Citizen’s Global Trade Watch. “The administration has made some good NAFTA renegotiation proposals that could make a difference, but the U.S. corporate lobby is urging Mexico and Canada to block those changes. It’s a mystery why the Commerce Department has not followed through on the China actions it announced earlier. 

U.S. – NAFTA Trade

Between 2011 and 2016, the U.S. goods trade deficit with NAFTA countries declined 11.6 percent, or $23.2 billion. This decline has been consistent except for a small jump in 2014, when the U.S. deficit increased by 2.9 percent. During Trump’s first 10 months, however, the U.S. goods trade deficit has increased 9.4 percent, or $13.6 billion relative to the same period in 2016.  The U.S. trade deficit with NAFTA countries is now mostly composed of manufactured and agricultural goods, while fossil fuels have declined as a share of the total deficit from 82 percent in 1993 before NAFTA to 16 percent in 2016.”

1

Click here for graphic covering NAFTA trade deficit data over longer timespan

The full-year trade data (Jan. – Dec.) show a similar trend. After the Great Recession, the NAFTA deficit hit its peak in 2011, but has been gradually decreasing each year with a small increase in 2014.  3

U.S. – China Trade

The U.S. goods trade deficit with China has been increasing every year since 2009, except for an insubstantial decrease in 2016. Under the Trump presidency, that small deficit reduction has been reversed, and is now rising again.

2

Click here for graphic covering U.S.-China trade deficit data over longer timespan

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