Senator Lankford Urges Trump Administration to Prioritize Job Creation Over Trade Deficits in NAFTA Renegotiations
WASHINGTON, DC – Senator James Lankford (R-OK) today led a letter to the Trump Administration with respect to US trade policy, including the ongoing renegotiation of the North American Free Trade Agreement (NAFTA). Lankford was joined on the letter by Senate Budget Committee Chairman Mike Enzi (R-WY) and Senate Commerce, Science, and Transportation Committee Chairman John Thune (R-SD). Specifically, the Senators urged the US Trade Representative, Robert Lighthizer, to refrain from the pursuit of a “sunset” clause in new trade agreements, and also explained the lack of correlation between the US trade deficit and national employment figures. Lankford also wrote about this topic in an August op-ed in the Washington Post entitled, The US trade deficit is a good thing.
Of note, the Senators wrote, “We would like to highlight that, over the past decade, the year in which the US unemployment rate was at its highest is the same year that the US trade deficit was at its lowest. At the very least, there is a negligible correlation between the number of jobs in the U.S. economy and our nation’s trade deficit. At most, they appear at times to be inversely related. Thus, if the desired result of current trade agreement renegotiations is job growth, concern over a negative trade balance should not be part of those discussions.”
In reaction to the letter, Oklahoma Cattlemen’s Association Executive Vice President Michael Kelsey said, “The Oklahoma Cattlemen’s Association appreciates Senator Lankford’s strong commitment to free and fair trade. His highlighting reduction of excessive government red tape is spot on and should be the top priority of our trade agreements.”
Oklahoma Farm Bureau President Rodd Moesel said, “Oklahoma farmers and ranchers depend on international agricultural markets to remain in business, as 95 percent of the world’s consumers live outside of the United States. The North American Free Trade Agreement allowed Mexico to become a leading destination for Oklahoma’s leading agriculture commodities – beef and wheat. The trade pact led to an increase of agricultural exports from $8.9 billion in 1993 to $38 billion in 2016, and allowed U.S. agriculture to maintain a positive trade balance with Mexico in 20 of the 23 years since NAFTA was created. Oklahoma Farm Bureau agrees with Sen. James Lankford: placing higher tariffs on imports will create additional trade barriers for Oklahoma farmers and ranchers and will harm our state’s second leading industry. We believe the modernization of NAFTA must prioritize and defend the gains achieved in U.S. agricultural trade.”
Oklahoma Grain and Feed Association President and CEO Joe Neal Hampton said, “Senator Lankford’s defense of free and fair trade should be applauded by Oklahomans and his colleagues in Congress alike. Oklahoma benefits greatly from open trade with countries around the world. The Oklahoma Agribusiness Retailers Association appreciates Lankford’s commitment to opening up markets for Oklahoma agricultural exporters and ensuring our current trade agreements, like NAFTA, continue to benefit our state’s workers, consumers, and businesses.”
A PDF of the letter is available here, and the full text of the letter is below:
November 15, 2017
The Honorable Robert Lighthizer
Office of the United States Trade Representative
600 17th Street NW, Washington, DC
Dear Ambassador Lighthizer,
We appreciate your service to our nation as you work to improve the United States’ trade relationships around the world. It is important now more than ever that the benefits of trade liberalization are championed by the world’s most powerful and prosperous economy.
We commend the Trump Administration’s enthusiasm to ensure that past trade agreements continue to promote U.S. interests. However, it should be clear that any need for a “sunset” provision in trade agreements is unnecessary. Your very engagement in not only reviewing, but renegotiating, the North American Free Trade Agreement (NAFTA) without any current sunset is evidence of every future U.S. administration’s ability to review and renegotiate trade deals. As you know, any change in U.S. law needed to conform to any renegotiated deal cannot be implemented unilaterally, but must be approved by Congress.
With the beginning of the renewed NAFTA negotiations in August, it has appeared that U.S. trade negotiators, under your leadership, are prioritizing reducing imports relative to exports in an attempt to create jobs here at home. While we agree that creating jobs should be a priority, seeking to do so through enacting additional barriers to trade and taxes on imports should not be the focus of U.S. trade policy. This is especially true since tariffs burden lower-income families disproportionately. Instead, we should begin reducing excessive government red tape, which depresses workers’ wages and constrains small business growth.
We would like to highlight that, over the past decade, the year in which the U.S. unemployment rate was at its highest is the same year that the U.S. trade deficit was at its lowest. At the very least, there is a negligible correlation between the number of jobs in the U.S. economy and our nation’s trade deficit. At most, they appear at times to be inversely related. Thus, if the desired result of current trade agreement renegotiations is job growth, concern over a negative trade balance should not be part of those discussions.
However, there are real problems with the labor market that are not connected to U.S. trade policy that need to be addressed – namely, the inflexibility of our nation’s labor market, which prevents us from reaping the full benefits of free and fair trade.
Strong labor dynamism – the free movement of workers among different jobs, industries, and geographic locations – is a natural, healthy sign for industrialized, growing economies. However, U.S. labor dynamism has remained dangerously low for more than twenty years. This is a real problem, but it cannot be solved through trade policy alone.
Instead, our nation should encourage flexibility within our labor supply such as reforming and simplifying the tax code; providing quality, affordable healthcare insurance options that do not overly burden the labor supply or demand; providing incentives to put people back to work; and reevaluating ineffective federal job training programs, to name just a few. These are the real solutions to the problems in our labor market.
There is much we can do to create a more dynamic and thriving workforce in this country that benefits American workers, businesses, and consumers. We hope that we can work together toward addressing real trade issues such as expanding markets for U.S. producers and businesses, eliminating foreign subsidies, and enforcing current trade laws. We look forward to working with you to this end in the coming months as NAFTA renegotiations continue. Thank you for your time and attention to this matter.
Senator James Lankford
Senator Mike Enzi
Senator John Thune
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