7/21 Erik Paulsen Correspondence Corner : NAFTA (and what he is focused on)


PREFACE :
Erik Paulsen regularly issues a video Correspondence Corner in which he responds to constituent questions.
It is a great ploy — Congressman Paulsen determines what question is to be answered … thus, providing him an opportunity to portray himself as effectively responding to issues that he wishes to address as if they are the most critical issues that voters want addressed.
The MN Political Roundtable will be evaluating Congressman Paulsen’s responses and encouraging readers to offer their own assessments.

Yesterday’s topic, H.R. 3163 Medicare Part B Home Infusion Services Temporary Transitional Payment Act.

Today’s topic, NAFTA and digital trade

Paul of Loretto writes that the Trump Administration has released its objectives as they begin to renegotiate the North American Free Trade Agreement (below is how the Trump White House views the past trade deals)

For too long, Americans have been forced to accept trade deals that put the interests of insiders and the Washington elite over the hard-working men and women of this country. As a result, blue-collar towns and cities have watched their factories close and good-paying jobs move overseas, while Americans face a mounting trade deficit and a devastated manufacturing base.

With a lifetime of negotiating experience, the President understands how critical it is to put American workers and businesses first when it comes to trade. With tough and fair agreements, international trade can be used to grow our economy, return millions of jobs to America’s shores, and revitalize our nation’s suffering communities.

It would seem that Paul of Loretto and President Trump have the same goal in the NAFTA renegotiation ==> to protect American jobs.

So if you are concerned how Canada uses a stumpage fee to protect its softwood lumber prices (which has a direct impact on Minnesota’s lumber industry), or you believe that there needs to be a stated amount of regional content needed to qualify for NAFTA’s tariff benefits, you want your Congressman to be focused on that … ya know, Make America Great Again by protecting AND increasing American jobs.

Does Congressman Paulsen respond as suggested in Forbes (i.e. establishing a strong domestic content requirement – a specific percentage of U.S.-made goods – in the auto industry, for example, 62.5 percent of a car or truck must be produced within North America before it can enter the U.S., Mexico, or Canada tariff free) ?

Or does Congressman Paulsen heed President Trump’s warning

So, how does Congressman Paulsen respond to Paul of Loretto ?
He promotes his letter to the White House and to his statements during the recent Ways and Means Committee hearing.

Yeah, no mention of domestic content requirement or border tax, Congressman Paulsen is focused on digital trade.

Yeah and no mention of manufacturing jobs.
Heck, it would seem as if the Trump team is really not focused on it either … just look at the entire (albeit brief) section on objectives for industrial goods:

Maintain existing reciprocal duty-free market access for industrial goods and strengthen disciplines to address non-tariff barriers that constrain U.S. exports to NAFTA countries.

Maintain existing duty-free access to NAFTA country markets for U.S. textile and apparel products and seek to improve competitive opportunities for exports of U.S. textile and apparel products while taking into account U.S. import sensitivities.

– Promote greater regulatory compatibility with respect to key goods sectors to reduce burdens associated with unnecessary differences in regulation, including through regulatory cooperation where appropriate.

Maintain was not bolded in the White House announcement, but it sure echoes the fact that they are pretty content with the status quo … as has been noted on Minnesota Progressive Project just another example of how Trump voters got well and truly suckered.

Contrast that with how the Trump team addresses other sectors —

Promote competitive supply of telecommunications services by facilitating market entry through transparent regulation and an independent regulator.

Secure commitments to provide reasonable network access for telecommunications suppliers through interconnection and access to physical facilities and scarce resources.

– Establish provisions protecting telecommunications services suppliers’ choice of technology.

Funny thing is that reading Paulsen’s letter to the Trump team features the same approach and concerns.

Is any wonder that House Ways and Means Committee Chairman Kevin Brady and Trade Subcommittee Chairman Dave Reichert released a statement praising the Trump team’s
announcement
[In case you don’t know Chairman Brady is from Texas so he has a vested interest in keeping products moving through his state while Congressman Reichert is from Washington — a state with a strong presence in the cyber world.]

So it is no surprise that Congressman Paulsen seems so supportive … he knows how to please his Washington friends … as well as his donors… like Amazon.

Why mention Amazon … well, because that was the headline

Trump’s NAFTA could be big win for Amazon, e-commerce

[highlights below]

Trump’s objectives on e-commerce look a lot like the ones included in the Obama administration’s Trans Pacific Partnership, a trade deal Trump not only withdrew from, but slammed as a terrible for American workers and businesses.
“Add that to your list of contradictions when it comes to the administration’s trade policy,” says Joshua Meltzer, a trade expert at the Brookings Institution. .”
The NAFTA goals put forward by the White House would raise the threshold for when a duty, or tax, is required of foreign shoppers. Such a change would ostensibly be a boon for online retailers in the U.S.
Here’s how it works now: Mexican shoppers pay a duty if they buy more than $50 of goods from online platforms or from U.S. retailers. Canadians only have to spend about $16 on U.S. goods before incurring a tax on their purchases. The shoppers pay the tax to their home country — Canada or Mexico.
Trump’s trade team says it wants to raise the duty free threshold to $800, which is the same level for Americans buying goods in Mexico or Canada.
“This, if accepted, would really magnify trade over the internet and shopping across the border,” says Gary Clyde Hufbauer, a trade expert at the Peterson Institute for International Economics.

And where did the idea come from to raise the threshold to $800 … how about the Paulsen-supported HR 644 Trade Facilitation and Trade Enforcement Act of 2015 when Congress raised the US threshold from $200 to $800.

Canada has indicated that they are not happy with this suggestion … maybe because they look at as losing tax revenues something that Congressman Paulsen never considers as CBO stated that HR 644 would add $2.2 BILLION over ten years during the next decade

So who is happy with the Trump team … well, the Chamber of Commerce is … while workers feel that they have been let down again as stated by Steel Workers President Leo Gerard, “This is not what workers who supported President Trump in the election expected: They assumed that he would renegotiate NAFTA to create better paying jobs for them and their families, rather than chasing higher profits and greater protections for corporate interests.”

One thing the Trump team did include is a statement about “minimum wages” … but the vague language doesn’t really say anything. What we do know is that the US minimum wage of $7.25 was established in 2009. Since then Mexico has raised it eleven times (and is still below America at roughly US$4) while Canada has regularly raised theirs — which is more than the US.
Funny thing is that Commerce Secretary Wilbur Ross has complained about Mexico’s lower wage and wants them to increase it so their citizens could buy more American goods … wonder why Congress doesn’t give American workers a raise so they could buy more American goods ?
Heh … funny thing … did you ever hear Congressman Paulsen say he got a constituent letter asking him to support H.R 15 Raise The Wage Act ?
Hmmm … he must still be waiting for someone to write before joining the 162 other sponsors of the bill.

Time will tell what the NAFTA renegotiation will produce … yet, it can be confidently said that President Trump will claim that he has negotiated a much better deal with so many more American jobs produced.
And it can be confidently stated that Erik Paulsen will get more checks from Amazon.

Tags: , , ,