Sees legislation as key to addressing trade barriers
Washington. The Coalition for a Prosperous America (CPA) has endorsed H.R. 764, the Reciprocal Trade Act (RTA) recently introduced by Rep. Sean Duffy (R-WI). The RTA would expand the president’s ability to defend domestic US manufacturers and agricultural producers against foreign protectionism by raising individual product tariffs to match foreign tariff and non-tariff barriers.
“We are pleased to support the efforts of Rep. Duffy and the Members of Congress who have co-sponsored this important legislation,” said CPA Chairman Dan DiMicco. “The Reciprocal Trade Act will provide much-needed leverage for President Trump as he confronts unfair trade. Congress should move swiftly to pass this bill.”
Currently, US tariffs are the lowest in the world despite high trade barriers in other countries. The RTA would provide the president with leverage to compel reductions in foreign trade barriers by increasing US tariffs.
The Reciprocal Trade Act specifies that, after appropriate consultations with Congress, the president can negotiate and enter into agreements committing foreign countries to lower their trade barriers. It also allows the president to impose reciprocal tariffs on countries that refuse to lower their tariffs and non-tariff barriers.
“We’re very supportive of the Reciprocal Trade Act,” said Michael Stumo, CEO of the CPA. "The executive branch should have as much leverage as possible to act when other nations take advantage of America’s wide-open consumer market while restricting access to their own market. Every country wants to sell into the US market, and that gives us negotiating strength. In the past, the United States unilaterally reduced tariffs with the expectation that other countries would do the same. But they have not. This bill would provide a strong tool to motivate reciprocity.”
Reciprocity is a key principle in international trade, and critical to moving us towards a world of free and balanced trade. Hopefully Representative Duffy's bill will gain traction. Unfortunately that is unlikely in the current House, as all of the cosponsors of the legislation are members of the minority Republican Party.
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[An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]
Journal of Economic Literature:
[Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....
Atlantic Economic Journal:
In Trading Away Our Future Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]