1. A Trade and Economic Policy for America
Michael Stumo, CEO
Coalition for a Prosperous America

2. CPA: Representing American Producers
Brian O’Shaughnessy
Revere Copper Products
Joe Logan
Ohio Fmrs Union
Bob Baugh
AFL-CIO
Pam Potthoff
Women Involved in
Farm Economics
Rob Dumont
Tooling, Manufacturing
& Technologies Assn
John Hansen
NFU

3. About CPA
A national non-profit group representing the interests of 2.7 million households through our farm, ranch, manufacturing and worker members
Working to balance trade - eliminate the trade deficit - as the biggest source of jobs and growth for America
Educating voters on trade issues and the voting records of elected officials on these issues

4. What is economic growth?
“Recession” = Contraction of GDP
GDP = C + I + G + NE
Net Imports/Trade Deficits
subtract from GDP
Biggest
Most Volatile
Investment
Net Exports:
Total Exports minus
Total Imports
Consumption
Government Procurement

5. National Trade Strategy
Goals
Net exports
Net job creation (full employment)
Wealth creation
Grow full supply chain
Auto, computer, food, robotics, etc.

6. Why trade agreements fail?
Tariff-based focus results in unilateral U.S. disarmament. Trade rivals replace tariff cuts.
Currency manipulation
Value added taxes: 18% avg VAT tariff/subsidy
State-owned, state-controlled entities
Indigenous innovation
Many other state-capitalism tactics

8. Net Imports Harm U.S. Economy
Job loss: 10,000 jobs per $1B trade deficit
Wealth loss: Offshoring transfers profits elsewhere
Innovation loss: New innovation offshored
Future loss: What will our kids do?

12. Obama: “Double Exports”
Bush already doubled exports. Exports increases under Clinton. Our exports have grown almost every year, including to China.

13. Asymmetrical Warfare America: Free trade Unilateral disarmament
“Faith based” trade
Successful Exporters: State Managed Capitalism
China, Japan, South Korea, Germany, etc.

14. Currency Cheating: Tariff & Subsidy

15. Border Adjustable Taxes/Value Added Taxes

16. Value Added Taxes are tariffs
$356 Billion trade distortion

17. How they use VATs Tariff and a subsidy
Offset other costs like health care
Offset tariff reduction
Canada/Mexico: 15% VAT after NAFTA
Central America: 12% VAT after CAFTA
Korea: 10% VAT now. Later increase?
China: 19% VAT

18. Korea FTA - ITC Net Numbers
International Trade Commission
Net trade with world: No change
Net trade with Korea: $3.5B improve (current is $13B deficit)
Net job creation: None
THUS, no government argument for net benefit.
Economic Policy Institute (EPI)
Net trade with Korea: Negative $13.5
Net jobs: Negative 159,000

19. Korea FTA: ITC Credibility
Projected $1B added deficit - China PNTR
Actual was $185B added deficit

20. Korea FTA: Problems State-managed economy
Currency manipulator: No restriction.
VAT of 10%. No restriction on increases.
Rule of origin: 35%
China trans-shipment. No. Korea trans- shipment
Beef rule of origin: Last place of substantial transformation

21. Sector Specific Arguments
Tactical opposition on sector specific net export grounds is a failed strategy.
Cannot support Korea agreement, then oppose Trans Pacific Partnership or Colombia
National Trade Strategy based upon American economic interests is a successful strategy.

22. National Trade Strategy
Neutralize state capitalism
Maximize domestic market share
Net exports... or at least balanced trade
Net job creation - full employment
Capture whole supply chain
Capture innovation: Invent it here, make it here