Trade Compliance

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U.S. Manufacturers Claim Fast Track Opponents Distorting Facts

Posted February 23, 2015


The record expansion of the U.S. trade deficit in December has provided ammunition to critics of President Barack Obama’s trade policy, and in particular, those opposed to the administration’s current push to fast track negotiations on the 12-nation Trans-Pacific Partnership Agreement.

The most recent Commerce Department figures earlier this month showed that the trade deficit jumped 17.1 percent, the largest amount ever in dollar terms, to $46.56 billion. For all of 2014, the trade deficits in goods with China and the European Union hit records, totaling nearly half a trillion dollars.

“This abysmal new data shows how the past agreements that serve as the template for the trade deals Obama is now pushing destroy more middle-class jobs and further suppress wages,” said Lori Wallach, trade expert at Public Citizen.

A release issued by the watchdog group claims the ballooning trade deficit is evidence that previous efforts to lower trade barriers have backfired. “Prior to the establishment of Fast Track and the trade agreements it enabled, the United States had balanced trade; since then, the U.S. trade deficit has exploded,” the group said.

Further disregarding the axiom that correlation does not imply causation, the group goes on to state that “in every year since Fast Track was first implemented in 1975, the United States has run a trade deficit. And since establishment of NAFTA and the WTO in the mid-1990s, the U.S. trade deficit jumped exponentially from under $100 billion to over $700 billion.” 

The National Association of Manufacturers (NAM) angrily fired back, calling on groups like Public Citizen to “stop distorting the facts” on what it contends is actually an overall manufacturing trade surplus with its 20 FTA partners for several years. NAM maintains that based on official Commerce Department data, the U.S. in fact had a manufacturing trade surplus of $55 billion with its FTA partners in 2014, compared with a more than $579 billion deficit with other countries.

The trade association attributes the wildly differing interpretation to Public Citizen’s calculations being “based on math that is just plain wrong.” NAM claims that the group recalculates the government data to subtract the value of products that they calculate are imported and then re-exported without change while neglecting to make the corresponding adjustment to the import side, which includes those same “re-exports” as imports for consumption.