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We’re one week away from the first of four scheduled debates in the presidential race – three between Donald Trump and Hillary Clinton and another featuring vice presidential candidates Mike Pence and Tim Kaine.
While we hope these debates will tease out the specifics of each candidate’s plans, we have already heard a lot on the campaign trail about their key policy positions, and that offers some hints as to what we can expect to hear on stage Monday night. Drawing on their recent comments and published policy positions, we’ll set the stage for this first debate over the coming week by analyzing the facts relevant to those positions and then highlighting what the American business community will be listening for during the debate.
First up: Trade.
Topic: The Trans-Pacific Partnership
Donald Trump: “The TPP would be the death blow for American manufacturing.” (June 28, 2016 speech titled "Declaring American Economic Independence")
American Businesses: Actually, the U.S. Department of Commerce estimates that exports of manufactured goods directly support approximately 6 million U.S. factory jobs—roughly half of all manufacturing employment. Manufacturing jobs tied to trade pay wages that are typically 18% higher than those that aren’t. While U.S. tariffs on imports of manufactured goods average about 1%, U.S. manufacturers often face steep tariffs and nontariff barriers in other TPP countries. The TPP would eliminate those foreign tariffs on U.S.-made manufactured goods, providing a substantial boost to U.S. manufacturers and the workers they employ.
Hillary Clinton: “I did say, when I was secretary of state, three years ago, that I hoped it would be the gold standard. It was just finally negotiated last week, and in looking at it, it didn't meet my standards. My standards for more new, good jobs for Americans, for raising wages for Americans. And I want to make sure that I can look into the eyes of any middle-class American and say, "this will help raise your wages." And I concluded I could not.” (October 13, 2015 Democratic Debate in Las Vegas)
American Businesses: New trade agreements like the TPP foster the creation of high-skill, high-wage jobs. Researchers with the Peterson Institute for International Economics estimate that the TPP will increase annual real incomes in the United States by $131 billion. They also expect the TPP will gradually improve the quality of jobs available in the United States, with around 650,000 more people ultimately working in higher paying export-related jobs (and fewer in lower-wage, non-export-related jobs) because of the TPP.
Topic: Trade Deficits and NAFTA
Donald Trump: “We're losing so much with Mexico and China -- with China, we're losing $500 billion a year. And then people say, "don't we want to trade?" I don't mind trading, but I don't want to lose $500 billion. I don't want to lose $58 billion.” (February 25, 2016 Republican Debate)
American Businesses: It is factually incorrect to say trade agreements are contributing to the U.S. trade deficit, as the deficit arises from trade in manufactured goods with countries where the United States has no trade agreement in place. With regard to manufactured goods, the United States ran a cumulative trade surplus with its trade agreement partner countries of more than $280 billion over the past eight years (2008-2015), according to data from the U.S. Department of Commerce. Further, the United States has global trade surpluses in services and agricultural products. If you’re worried about the trade deficit, trade agreements are part of the solution — not the problem
And as for Mexico and NAFTA, the U.S. services trade surplus with Canada and Mexico reached $41.8 billion in 2014 (latest available). For manufactured goods, the United States ran a cumulative trade surplus with Canada and Mexico of more than $70 billion over the past eight years. Trade with our two immediate neighbors supports nearly 14 million U.S. jobs, with 5 million of these net jobs are supported by the increase in trade generated by NAFTA since 1994.
Topic: The Need for World Trade
Hillary Clinton: “We have to trade with the rest of the world. We are 5 percent of the world's population. We have to trade with the other 95 percent. And trade has to be reciprocal. That's the way the global economy works.” (February 4, 2016 Democratic Debate in New Hampshire)
American Businesses: Secretary Clinton is exactly right – trade allows us to access 95% of the world and continue to build on the 41 million U.S. jobs that already depend on world trade. So why wouldn’t she support the TPP and other future trade agreements? A few other facts on why American jobs depend on engaging in world trade: 92% of the world’s economic growth is beyond our borders, and of the 300,000 American businesses that rely on exporting, 98% of them are small and medium –sized businesses.
Topic: A Trade Deal with Europe
Donald Trump: “The future of Europe, as well as the United States, depends on a cohesive global economy. All of us must work toward together toward that very significant common goal.” (January 22, 2013 CNN opinion piece)
American Businesses: Ok, so we cheated a little and reached back three and a half years, but Donald Trump clearly understands the importance of international trade in providing us the opportunity to create jobs and economic growth through access to purchasing power around the globe, 80% of which is outside of the United States. And while we need the TPP approved by Congress as soon as possible, the next step to building Trump’s “cohesive global economy” is the Transatlantic Trade and Investment Partnership (TTIP). As business leaders on both sides of the Atlantic Ocean wrote early this year, “Europe and the United States enjoy the world’s largest trading relationship, representing nearly half of global GDP,” and the passage of TTIP will “ensure that the United States and the European Union continue to lead the drive for trade and investment liberalization globally.”