Although couched in don’t-burn-bridges-with-the-new-president verbiage, the volley of press releases from ag organizations diplomatically expressed disdain with President Trump’s executive order to withdraw the U.S. from ongoing negotiations for the Trans-Pacific Partnership trade pact. Only a scant handful, including the National Grange, came out in support of the president’s action.
A businessman who’s worth an estimated $4.9 billion — Fred Smith, who built a one airplane package delivery service into the Memphis-based worldwide FedEx empire — had some incisive observations about the decision during a Fox Business Network interview with Maria Bartiromo.
U.S. economic growth without free trade, Smith said, “would be like trying to breathe without oxygen. It’s an essential part of the economy. I think the decision to pull out of TPP is unfortunate because the real beneficiary is China. China has been very mercantilist, very protectionist; they’ve engaged in industrial policy to the disadvantage of America and European countries.”
The “real opportunity,” he said, “is to get China to take down their barriers to American goods, because the countries with which we have free trade agreements — 20 of them — we actually have a trade surplus. Everybody focuses on manufacturing, but as a nation we have a surplus in trade services, including the services that 426,000 FedEx folks make their living in.”
The average American, Smith said, gets about $13,000 worth of benefits from trade. “A third of the crops planted in the U.S. are exported. It’s not just manufacturing that constitutes trade — it’s services, agriculture, and manufacturing. About a quarter of all our manufactured goods go to foreign countries. We have an enormous export economy, about 12 percent of our gross domestic product.”
The “real benefit of trade is derived from opening up markets,” Smith said, noting that President Trump and his “three most important trade people have repeatedly said what we want is free trade and fair trade.
“China has been very protectionist … and involved themselves in industrial espionage and cyber warfare. We need to try to stop those things and get the Chinese to open up their 1.3 billion person market — not cut them off. We have the opportunity to sell huge amounts of goods to China.” China’s e-commerce market is projected to grow from $2 trillion to $4 trillion, he said. “There are a lot of people in China that American manufacturers can serve, but we don’t want to involve ourselves in protectionism — we need to open up markets, not cut them off.”
Trade “has made America great,” Smith declared, pointing out that some “40 million Americans … make their jobs in trade; about 27 percent of our entire economy is related to trade; 95 percent of the world’s consumers aren’t in the U.S. — they’re elsewhere in the world (and represent) 80 percent of the purchasing power.”
See the Fox Business News interview at http://bit.ly/2kpxOW3