Politico (8/7/17)
I understand people can have reasonable differences of opinion on trade deals like the Trans-Pacific Partnership (TPP), but why is it that the proponents have to insist, with zero evidence, that not doing the deal was an economic disaster? Yes, I know the political argument, which seemed to arise late in the game, that US standing in the world has collapsed because we didn’t follow through on the TPP. But let’s just stick with the economics.
Politico (8/7/17) ran a lengthy piece saying that the US pullout from the TPP undermined the hopes for a revival of rural America. It cited as evidence a report from the United States International Trade Commission that projected the deal would have increased agricultural output by 0.5 percent when fully phased in, 15 years from now. Seriously, folks, a 0.5 percent increase in output is going to save rural America? That’s three months of normal growth; who are you trying to fool?
New York Times (8/8/17)
The New York Times (8/8/17) joined the act with a news article that started out by pointing to the costs from the Trump administration’s ambiguities on trade policy. While the piece made many reasonable points, it then turned to the losses from pulling out from the TPP, telling readers:
One accomplishment that Mr. Trump has notched on trade has been an agreement with China that opened its market to American beef exports. For the beef industry, however, the benefits of that deal pale in comparison with the cost of abandoning the Trans-Pacific Partnership, which had been spearheaded by President Barack Obama. It would have provided access to the enormous Japanese market.
Instead, Japanese tariffs on American frozen beef, which would have declined under Mr. Obama’s deal, are on the rise. Last week, they increased to 50 percent from 38 percent, making America’s meat even more vulnerable to competition from countries such as Australia.
“TPP was fantastic,” said Kent Bacus, director of international trade for the National Cattlemen’s Beef Association. “When you walk away from it without a meaningful alternative, that causes a lot of alarm in the beef industry.”
While the piece tells us how important the Japanese beef market is, it would have been useful to get some sense of proportion. According to the piece, Japan’s entire market is $1.5 billion annually. US beef production is currently $60 billion. This means that if US producers were able to secure half of Japan’s market—a very impressive accomplishment for a country halfway across the world—it would raise the demand for US beef by 1.3 percent.
The piece also misleads readers on the nature of global markets. If Australia gets preferred access to Japan’s beef market, then some of the beef that Australia used to export to other countries will be diverted to Japan. This will open up new export markets for US beef. It is worth noting that, while the piece includes the exuberant praise of the TPP from Mr. Bacus, it does not quote or cite any critics of the deal.
The piece then turns to the tariffs imposed on Canadian softwood lumber, ostensibly because Canada subsidizes its lumber exports. It tells readers:
And imposing tariffs to protect one domestic industry often does damage to another. The most prominent recent example comes from an industry that is dear to Mr. Trump’s heart: home construction….
These days, home builders may not be as apt to cheer. In April, the Trump administration announced that it would impose new tariffs on Canadian softwood lumber, saying the exports are unfairly subsidized. The proposed tariffs, which could be as high as 24 percent, have already led to a spike in lumber prices. According to Bloomberg data, they are up nearly 18 percent this year.
That has put the squeeze on American home builders, who rely heavily on Canadian lumber. The United States imported $5.7 billion in softwood lumber last year, mainly for residential building.
It’s not clear where Bloomberg gets its data, but the Bureau of Labor Statistics reports that softwood lumber prices have increased by 9.7 percent over the last year, just over half of the 18 percent figure cited in the piece. We are currently building more than 600,000 new homes a year, with an average sales price of almost $380,000. This puts the total value of new homes in the range of $220 billion.
If, as a result of the tariff, we paid 24 percent more on $5.7 billion in softwood imported from Canada, this would increase the cost by roughly $1.4 billion. That would imply an increase in costs of a bit more than 0.6 percent of the sales price. That is not altogether trivial, but it seems unlikely to wreck the housing industry.
A version of this post originally appeared on CEPR’s blog Beat the Press (8/8/17). You can send a message to the New York Times at letters@nytimes.com (Twitter:@NYTimes). Please remember that respectful communication is the most effective.
We avoided the Investor-State Dispute Settlement mechanism. Which is a wonderful achievement in and of itself.
It figures it’s the New York Slimes looks at “beef” and frozen, not cows, as a commodity. To be shipped overseas to China on global warming sailing vessels. And it could have been the “enormous market” in Japan had Trump, like the libraal Obama, pushed for TPP. Just what dilapidated US infrastructure needs. Another trade deal written as a free ticket for and by the corporations. Ca-ching. If you’ve seen the videos those animals, sentient beings, roll off assembly lines with all the compassion of building a car. This type of capitalist tripe cannot be despised sufficiently: “making America’s meat even more vulnerable to competition from countries such as Australia.” Let the planet burst into flames and split in two. We’ll still have our competitive capitalist predilections intact. Instead of cutting down trees in Canada for home building lumber it should be hemp.
I’ve never been able to believe that these so-called “free” trade deals were ever anything more than a leveraging tool for conservatives to debilitate the US labor movement, and stats like the above by DB just help prove that out.
Why would anyone want American meat? it’s filled with all kinds of antibiotics. I suppose that doctors will soon have to give advice to their patients as: ” take 2 chickens and call me in the morning”: It’s getting very hard to find real food! Now we read that 17 countries in the EU have contaminated eggs. I gave up on American business caring about employees when Disneyland in Florida was dumping its tech people to hire H1 visa people from India. Fortunately, they were found out and ha! The suppposed :Happiest place on earth” screws its own employees. Who can you trust anymore?
After WW 2, when every manufacturing nation was blown up except America, then the corporations cared and even paid 90% in taxes……and rich people were still rich.When Americans were the market for America products , then employees were treated much better. I wonder, was it because so many Americans shared in the war, and that it took everyone to make the American world work. ? So corporations , now you are screwing over all the people of every nation, and who’s going to buy when they have no money? Maybe corporate America, that’s what being “hoisted on your own petard,,” means. : )
Sadly Mt.Baker to answer your question “yes” the corporate media do need to lie to promote trade deals hey! those corporate advetisers from whomever the hell is on the pages or websites of the people you and the team at FAIR have criticized for decades is what keeps those outlets operating sadly. Corporate media or state media like the BBC or ABC or TV NZ is never going to hold power properly into account, and when they do they will get flak and many will be demoted or swiftly told to tone it down. Yes they need to lie, produce fake news, as they are an extension of powerful interests and the state. To expect anything more from them is delusional.