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Obama says TPP is progressive trade deal for workers

The president told the program “Marketplace” on NPR that trade isolationism would hurt Americans in a globalized world.

   President Obama said in a radio interview Wednesday that he initiated discussions on the Trans-Pacific Partnership free trade agreement as a way to solidify U.S. economic interests in Asia and put pressure on China to follow international norms on trade.
   Free trade negotiations are in their sixth year with 11 Asian, North American and South American nations, and Congress is considering a Trade Promotion Authority bill that would give the White House a strong hand to finalize a deal.
   Although many members of his own party oppose TPP because previous waves of globalization have led to manufacturing outsourcing, Obama said it would be a missed opportunity if the United States didn’t integrate with the fastest growing, most dynamic part of the global economy.
   “And, if we are not there helping to shape the rules of the road, then U.S. businesses and U.S. workers are going to be cut out, because there’s a pretty big country there, called China, that is growing fast, has great gravitational pull and often operates with different sets of rules,” Obama said on “Marketplace,” which is produced by American Public Media.
   “So, we started this negotiation, the Trans-Pacific Partnership, recognizing that a third of our recovery’s been driven by exports, that typically export industries pay higher wages, and if we want to make sure that we’re selling American products, American services into not just the next decade, but the next several decades, then we’ve got to have high standards, high labor protections, high environmental protections, in that part of the market, that part of the world, where we need to do business.”
   Obama said China has already started to put out feelers about possibly joining TPP.
   The U.S. government will still challenge China to improve its policies on currency manipulation and intellectual property theft, “but it sure helps if they are surrounded with countries that are operating with the same kinds of high standards that, by the way, we already abide by. So, part of what we’re doing here is we’re leveling up, as opposed to a race to the bottom, which means no labor protections, no environmental protections. We want to make sure that there is a level playing field that’s going to allow us to be successful, and will help to shape trade and commerce, not just in the region, but in the world for a long time to come.”
   Obama acknowledged that there have been some losers from past trade deals, but said TPP would strengthen the North American Free Trade Agreement and create more jobs.
   “The truth is, is that globalization, advances in technology, big cargo containers shipping goods in that are sold through the distribution and logistics networks in this country, over the last 20, 30 years, played a role in reducing the leverage that workers had, played a role in outsourcing, but the argument that I make to my friends, whose values I share, is that you can’t fight the last war. The truth is, today, if there is a company in the United States that wants to find low-wage labor – if that’s their business model, I think it’s a mistake, but if that’s their business model – they can do it now, under existing rules. NAFTA did not have labor protections or environmental protections that were enforceable; that was a side-letter.
   “So, part of what I’m saying to our folks is that precisely because the existing rules oftentimes disadvantage U.S. workers and U.S. businesses, for us to create new rules that raise standards in an important part of the world — including, by the way, the two countries that were signatories to NAFTA, Canada and Mexico, so that now, suddenly, they’ve got to have stronger labor rules — if we’ve got potentially hundreds of millions of workers who are now subject to international labor standards that weren’t there before, and now, when we’re working with them, even if they’re not enforcing those standards 100 percent, we’ve got enough leverage to start raising those standards, that is good for us,” Obama said.
   “So just because past experience raised concerns around outsourcing, we’ve got to think about the future and where our economy is now going. It’s not going to be based on low-wage work. It’s going to be based on high-skill, high-value-added, high-wage work, which we’re good at. But that means that we’ve got to be able to access those markets to sell those goods.”
   The President added that the TPP package includes trade adjustment assistance to help workers displaced by trade advances get the skills to move into other lines of work.
   “It may be that as a consequence of this trade deal, there are particular markets, there are particular niche parts of the economy, where we’ve got to provide help to transition, and to re-tool and adapt. That’s part of the reason why part of this package includes trade adjustment assistance. But, one of the basic premises for me in pursuing this, is that we can’t just draw a moat and pull up the drawbridge around our economy. We are completely woven into the global economy. We are the hub to many, to a large extent, of the global economy. So, the question is, how do we construct a set of rules, but then, also, how do we make sure that we’re adapting and using the incredible advantages we have to the best of our ability. And so when I talk to labor leaders, for example, I say, you are absolutely right that there’s been growing inequality, and some of that has to do with globalization and technology,” Obama said.
   Addressing social justice and income inequality require a series of structural reforms at home that can’t be addressed in a free trade agreement, he stressed.
   “But, we’re not going to address those issues by not trading with Japan. We’re not going to address those issues by pretending that the global supply chain doesn’t exist. The same is true when it comes to environmental issues. If we want to solve something like climate change, which is one of my highest priorities, then I’ve got to be able to get into places like Malaysia, and say to them, ‘this is in your interest.’ What leverage do I have to get them to stop deforestation? Well, part of the leverage is, if I’m in a trade relationship with them, it allows me raise standards. Now, they have to start thinking about how quick they’re chopping down their forests and what kinds of standards they need to apply to environmental conservation. So, we have to engage, not withdraw. And, I think the big mistake that some of my progressive friends make when it comes to trade, is not the values they’re pursuing, or the very legitimate concerns they have about some past trade deals.
   “The issue is, are you now identifying what’s going to make the biggest difference in helping American workers compete and prosper? And, that’s not to shut off trade, that’s designing good trade agreements, and then doing the things that are fully in our control in this country, like raising our minimum wage, like making sure that we are providing job training and apprenticeship programs, making sure that our education system works, making sure we’re investing in R&D, making sure we’ve got a fair tax system and we’re closing corporate loopholes that allow us to fund things like infrastructure; all that stuff has to be at the center of our agenda.”
   Obama insisted the trade deal will benefit small-and-medium size enterprises as well as large companies such as Nike and Boeing. Nike, in fact, has said that savings on import duties throughout the TPP zone would allow it invest in a new factory in the United States that could eventually lead to 10,000 domestic jobs. Obama also added that the advanced manufacturing Nike has committed to will involve 3-D printing of footwear.