This document discusses the need for a national trade strategy in the United States that focuses on net exports, job creation, and wealth creation. It argues that past trade agreements have failed to achieve these goals because they took a tariff-based approach and resulted in unilateral disarmament against trade rivals that use tactics like currency manipulation, value-added taxes, and state-owned enterprises. The document advocates for a strategy that neutralizes state capitalism tactics and maximizes domestic market share and net exports to benefit the American economy.

1. A Trade and Economic
Policy for America
Michael Stumo, CEO
Coalition for a Prosperous America

2. CPA: Representing American Producers
Brian O’Shaughnessy Joe Logan Bob Baugh
Revere Copper Products Ohio Fmrs Union AFL-CIO
Pam Potthoff Rob Dumont
John Hansen
Women Involved in Tooling, Manufacturing
NFU
Farm Economics & Technologies Assn

3. About CPA
A national non-profit group representing the
interests of 2.7 million households through
our farm, ranch, manufacturing and worker
members
Working to balance trade - eliminate the
trade deficit - as the biggest source of jobs
and growth for America
Educating voters on trade issues and the
voting records of elected officials on these
issues

4. What is economic growth?
“Recession” = Contraction of GDP
Net Imports/Trade Deficits
Biggest Most Volatile
subtract from GDP
GDP = C + I + G + NE
Investment
Net Exports:
Consumption Total Exports minus
Government Total Imports
Procurement

5. National Trade Strategy
Goals
Net exports
Net job creation (full employment)
Wealth creation
Grow full supply chain
Auto, computer, food, robotics, etc.

6. Why trade agreements fail?
Tariff-based focus results in unilateral U.S.
disarmament. Trade rivals replace tariff cuts.
Currency manipulation
Value added taxes: 18% avg VAT tariff/subsidy
State-owned, state-controlled entities
Indigenous innovation
Many other state-capitalism tactics

8. Net Imports Harm U.S.
Economy
Job loss: 10,000 jobs per $1B trade deficit
Wealth loss: Offshoring transfers profits
elsewhere
Innovation loss: New innovation offshored
Future loss: What will our kids do?

12. Obama: “Double Exports”
Bush already
doubled
exports.
Exports
increases
under Clinton.
Our exports
have grown
almost every
year, including
to China.

13. Asymmetrical Warfare
America: Free trade
Unilateral disarmament
“Faith based” trade
Successful Exporters: State Managed
Capitalism
China, Japan, South
Korea, Germany, etc.

14. Currency Cheating:
Tariff & Subsidy

15. Border Adjustable Taxes/Value Added Taxes

16. Value Added Taxes are tariffs
$356 Billion trade distortion

17. How they use VATs
Tariff and a subsidy
Offset other costs like health care
Offset tariff reduction
Canada/Mexico: 15% VAT after NAFTA
Central America: 12% VAT after CAFTA
Korea: 10% VAT now. Later increase?
China: 19% VAT

18. Korea FTA - ITC Net Numbers
International Trade Commission
Net trade with world: No change
Net trade with Korea: $3.5B improve (current is $13B
deficit)
Net job creation: None
THUS, no government argument for net benefit.
Economic Policy Institute (EPI)
Net trade with Korea: Negative $13.5
Net jobs: Negative 159,000

19. Korea FTA: ITC Credibility
Projected $1B added deficit - China PNTR
Actual was $185B added deficit

20. Korea FTA: Problems
State-managed economy
Currency manipulator: No restriction.
VAT of 10%. No restriction on increases.
Rule of origin: 35%
China trans-shipment. No. Korea trans-
shipment
Beef rule of origin: Last place of substantial
transformation

21. Sector Specific Arguments
Tactical opposition on sector specific net
export grounds is a failed strategy.
Cannot support Korea agreement, then
oppose Trans Pacific Partnership or
Colombia
National Trade Strategy based upon
American economic interests is a successful
strategy.

22. National Trade Strategy
Neutralize state capitalism
Maximize domestic market share
Net exports... or at least balanced trade
Net job creation - full employment
Capture whole supply chain
Capture innovation: Invent it here, make it
here