[ Crista Huff| September 23, 2016 |Goodfellow]
On September 19, the United Steelworkers (USW) sent a spectacular email to the chairmen of the Congressional Steel Caucus. Within the correspondence, the USW laid out thorough, logical and convincing reasons as to how the TPP will further damage the U.S. steel industry.
The U.S.-Korea free trade agreement (KORUS) gave the U.S. a pronounced inter-country trade deficit in steel.
The U.S. trade deficit within the steel industry will be exacerbated when we allow additional steel imports.
Shortfalls within TPP Rules of Origin will lead to lower-quality steel imports. Non-TPP countries — such as China — will work in tandem with TPP partner countries to take advantage of their access to U.S. markets and reduced tariffs. For example, TPP Rules of Origin would allow up to 63% of an automobile’s parts to come from non-TPP countries, yet the assembled vehicles would qualify for duty-free import status into the U.S. and be labelled “Made in America”.
Despite a current and problematic overcapacity in global steel production, Vietnam plans to grow its steel industry almost seven-fold by 2025. The country plans to export 10 million tons of steel per year, while also reducing its importation of steel products. In addition, the TPP allows Vietnamese steel coming into the U.S. to arrive duty-free, while U.S. steel entering Vietnam would continue to be subject to tariffs for 13 years.
Japan, another TPP partner country, already has a trade surplus in steel goods with the U.S. — a surplus which will be exacerbated by the removal of U.S. tariffs under the TPP.
Steel companies in several TPP partner countries are subject to far lower environmental standards than are U.S. steel companies. The costs of compliance with U.S. government regulations — and the lack of compliance abroad — makes U.S. steel products more costly than their foreign competition.
Foreign currency manipulation is a chronic problem that is not addressed in the TPP.
It should be noted the steel production in the U.S. fell 27% in 2015, largely due to currency manipulation and trade cheating on the part of Asian countries. An industry cannot shrink 27% per year for more than a few years without being at risk of disappearing altogether.
People might say, “Crista, you’re a far-right conservative political activist. Why are you promoting a lefty organization like the USW?” The reason should be obvious. As a fiscal conservative, I care immensely about jobs and the economy; and as a stock market analyst, I understand how money and business function. Poorly negotiated trade agreements have led to hemorrhaging manufacturing job losses in America.
My stance is, “First, do no harm.” We need to stop signing carbon copies of past trade agreements that led to U.S. job loss! From there, we need tofix past trade agreements. Finally, we need to employ real business people when it’s time to negotiate new trade agreements.
This is not rocket science. Any set of fifty random business leaders could accomplish better negotiations than those produced by the group of career government employees in the office of the U.S. Trade Representative.
“The TPP utterly fails the U.S. steel industry and its workers and will only lead to further layoffs and undermining of domestic manufacturing,” stated Leo W. Gerard, International President of the USW.
I stand with #steel. First, do no harm.