Beware Bipartisan Move On Trade, Tax Reform


Senate Finance Committee Chairman Max Baucus (D-Mont.) and House Ways and Means Committee Chairman Dave Camp (R-Mich.) had been rather quiet when winning approval for an ever-growing list of Free Trade Agreements (FTAs). But now they’re getting vocal, as Baucus eyes retirement and Camp plans to soon leave his Ways and Means chairmanship.

They want to give us “one good turn,” before hitting the lounge chairs.

So, the two lately have made several television and speaking appearances in the wake of the Senate’s 93-4 approval of Michael Froman as the new US trade representative in June.

Sen. Elizabeth Warren (D-Mass.), a staunch critic of banking and trade policies that line the poets of the super-rich, was joined by Sens. Joe Manchin (D-W.Va.), Carl Levin (D-Mich.) and Bernie Sanders (I-Vt.) in opposing Froman’s nomination. Warren said he appears intent on ramming through the massive but shadowy Trans Pacific Partnership (TPP). The concept of transparency, especially with regards to the TPP, seems as foreign to Froman as an igloo on Venus.

“Tracking the trajectory of FTAs [Free Trade Agreements],” Warren said on the Senate floor, is becoming exceedingly difficult, because without a policy of openness to permit such tracking, “real input” about FTAs is impossible. She added that the Office of the U.S. Trade Representative (USTR) has admitted that “public opposition would be significant” if the TPP’s details were more widely known. The TPP, if ever finalized, would be the Godzilla of all trade pacts, encompassing at least 11 far-flung nations, including: Australia, Brunei, Chile, Canada, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. Japan and South Korea have yet to join but have expressed some interest.

“In other words, if the people knew what was going on, they’d stop it,” Warren stated. She stressed that if simply allowing public transparency about the TPA brings such a result, “then that trade agreement should not be the policy of the U.S.”

And Warren is troubled that the USTR refuses to release what’s called the “Composite Bracketed Text (CBT),” which is “the proposed language [of the TPA] from the U.S. and other countries,” which “serves as the focal point for [their TPP] negotiations.”

Warren previously asked Froman if he would release either the full CBT, or a shorter “scrubbed version.” The answer was “no” to both requests. Even the Bush administration was more open than this on trade issues, she noted, adding: “The American people have a right to know more about our negotiations that will have a dramatic effect on our working men and women ...”

Notably, Rep. Camp recently said on C-Span that he and Baucus want to give President Obama Fast Track Authority for the TPP to try and seal the TPP deal before the rubes stir and begin shouting.

“We’re close to getting an agreement [in Congress] on the TPP,” Baucus beamed on the same broadcast.

Rep. Camp, at the Washington International Trade Association dinner July 18, said, “I’m also glad you’re honoring ... Mike Froman, who is new to USTR but an old hand on trade policy.” Recognizing the USTR staff, Camp added; “Our accomplishments — seven bipartisan trade bills last Congress — have been all the more meaningful with the strong partnership we have created.”

Camp continued: “The sooner we can conclude a robust TPP, the sooner we can start expanding participation in TPP.” And, speaking of another huge planned trade pact, Camp noted: “A comprehensive US-EU agreement would cover 50% of global GDP and serve as an influential model to promote free trade and open markets around the world.”  

It’s lovely and all for Messrs. Camp and Baucus to tenderheartedly look after us like this, yet the problem lies in free-traders’ ridiculous assumption that, to sell products, we must send them into multiple world markets, instead of enriching the purchasing power of Americans and selling most of the production in the domestic market, thereby creating what the late trade analyst Gus Stelzer called “the ripple multiplier effect.”

That happens when Americans, with their economy protected by sufficient tariffs on foreign imports, produce broad categories of durable goods, while earning high wages in the process. This gives birth to more US-based parts suppliers, who also do well.

Then, domestic sales outlets briskly sell the durable goods, and everyone involved, with their enhanced purchasing power, spends their money on local restaurants and various other businesses, while also starting new businesses. This translates into borrowing less money from banks and having less in the way of interest charges to pass on in the form of higher prices.

The confounded anti-tariff, free-trade system spreads economic activity too thin and extends supply lines too long. Having national economies do well separately is far better than forcing every nation, through FTAs, to be a cog in a giant wheel. No nation need import those things it can grow or make for itself, and imports can be limited to filling shortages or bringing in things otherwise unobtainable.

Baucus and Camp are “working” the key Washington lobbying offices on K Street, “briefing corporate America on their legislative plans” for rewriting the US tax code, Politico added. These chairmen of the two tax-writing committees recently visited Philadelphia businesses to “hear directly from Americans about how to spark a more prosperous economy and make today’s broken tax code fairer for families and job creators.” Yet the part about eliminating many of the tax deductions routinely used by most Americans is being downplayed — so far.

Mark Anderson is a veteran journalist. Email him at

From The Progressive Populist, September 1, 2013

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