October 26th, 2016| BY: Alan Reynolds
After three intense presidential debates, Hillary Clinton and Donald Trump managed to agree on at least one thing: The Trans-Pacific Partnership is bad for America, in part because many trade deals have supposedly caused trade deficits. Unfortunately, they’re both wrong. The country would be better served by candidates who speak frankly about the complexity of international commerce—rather than offer murky platitudes about supposedly harmful trade agreements.
The U.S. had a $334.1 billion trade deficit with China in 2015, including services, according to the Commerce Department’s Bureau of Economic Analysis. It also had a $77.3 billion deficit with Germany and $55.4 billion with Japan. What do all these countries have in common? None have trade agreements with the U.S. Mr. Trump can’t “renegotiate” trade deals that were never negotiated.
The U.S. also maintains trade surpluses with many countries. It ran a $31.7 billion trade surplus with Hong Kong last year, $12 billion with the United Kingdom and $17.5 billion with Singapore. Although a few trade surplus partners have free-trade agreements with the U.S., it would be incongruous to attribute both surpluses and deficits to such accords. This bipartisan hullabaloo about some alleged link between trade deals and trade deficits is simply false—politically convenient fiction.
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