Why Detroit opposes Obama’s big trade deal

From The Washington Post:

Official projections show the American auto industry will win if President Obama’s signature trade deal, the Trans-Pacific Partnership, is ratified. A few more cars would be made in America and a few more people would be working in the automotive industry.

For that reason, Detroit might have seemed like a surprising place for Donald Trump to make a major speech about why he opposes the trade deal, and his views on the economy more broadly.

In the industry, though, the trade agreement that the Obama administration has negotiated with 11 other countries is viewed with suspicion. Automakers doubt they will be able to sell many American cars in those other countries, and decades of bitter competition with Japanese firms has bred skepticism and hostility.

U.S. automakers are focused on what they see as foreign governments’ efforts to reduce the price of their currency and give their own manufacturers an unfair advantage. Trump talked about the issue in his speech, predicting the new trade agreement would result in less business for automakers would set back Detroit’s economy even further.

“We will withdraw from the deal before that can ever happen,” Trump said, adding that the trade agreements his Democratic rival had supported in the past had impoverished U.S. workers. “Hillary Clinton has supported the trade deals stripping this city, and this country, of its jobs and wealth,” Trump said.

The International Trade Commission, a nonpartisan, independent federal agency, forecasts that the output of U.S. automakers will be $1.6 billion higher by 2032 if the trade agreement is ratified than under current trade rules. Their payrolls would be about 0.3 percent higher.

Several provisions of the deal would contribute to these increases, according to the commission. Malaysia and Vietnam would eliminate tariffs on U.S. cars. Japan would agree to accept several U.S. safety standards instead of imposing its own on American cars and would also exempt a larger number of exported vehicles …

Continue Reading