Scott Paul: ‘Simply Untrue’ Demise of TPP Helps China; ‘Rules That Disadvantage American Manufacturing’ Don’t Make Us Stronger

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President Scott Paul of the Alliance for American Manufacturing appeared on Tuesday’s Breitbart News Daily to discuss the letter his organization sent to President Donald Trump, offering suggestions on how to “advance Mr. Trump’s shared goal of revitalizing America’s manufacturing sector.”

“This election was a lot of things to a lot of people, but I think a really sharp analysis is that the working-class voters in the industrial heartland felt really left behind economically. That was a big piece of it,” Paul told SiriusXM host Alex Marlow. “I think Trump, in a lot of ways, spoke to those concerns. You look at the actions on Day One, withdrawing from the Trans-Pacific Partnership as an example of that. Rebuilding America, another good example of that. And, quite honestly, just having a belief in manufacturing, which is scorned by mainstream economists and others who really look at it as a backwards part of the American economy, and part of our past, rather than part of our strong future.”

“So we laid out – and we’re nonpartisan – ways in which we can be helpful on trade policy, on infrastructure, on this idea of ‘Buy American, Hire American,’ and indicated that we were very eager to work with the President, with the Congress, to achieve some of these objectives,” he said. “We bring together some manufacturers, one of whom was sitting with Trump yesterday morning, United States Steel, as well as the steelworkers union. Trump met with labor leaders yesterday afternoon, and it kind of shows the breadth of the appeal of this type of populist, but effective, economics.”

Marlow asked for Paul’s take on what globalist economic theorists have gotten so wrong, leading to the ruinous state of American manufacturing, which led Trump to memorably compare shuttered U.S. factories to “tombstones in a graveyard” in his inaugural address.

“It’s tricky because we’re so imbued with this economic philosophy of the Invisible Hand and the free market. In a textbook that looks really awesome, I suppose, but we live in the real world, in global competition,” Paul replied.

“America has always forged the kind of economy we want to have,” he argued. “It goes back to our founding, when Hamilton looked at the kind of plantation-based agriculture and said we need to be aggressive. We need to be competitive. We need a manufacturing base. We don’t want to depend on Britain and France to arm ourselves or to supply our manufactured goods. It will be awesome for our nation.”

“This is a thread that was carried, believe it or not, through Lincoln and FDR and Eisenhower and Reagan,” he recalled. “The challenge is that we make purposeful decisions, such as advantaging Wall Street, which has impacts on the rest of our economy, like manufacturing, and it helped squeeze it dry over the last two decades. We lost more than 50,000 factories, as Trump has accurately noted. We lost a third of all of our manufacturing jobs – and yes, some of those were lost to automation, but many of them were shipped overseas.”

“This was not the free market at work,” Paul contended. “This was intentional policy choices. Relative to the value of the dollar, our trade policy that promoted offshoring, our tax code, you look at our educational system, and you put it all together and it was not built for manufacturing. To the extent that Trump wants to rebuild to focus on manufacturing, as well as other sectors, I think that’s going to be an awesome thing for our future.”

“These are well-paying jobs. This is a ladder of where Americans can achieve the middle-class dream. It is very much a part of our future. Smart nations are betting on manufacturing in their future. It’s going to look a lot different than it did in the 1950s, but it’s important to have it as a centerpiece in the economy,” he said.

Paul hailed Trump’s executive order to withdraw from the Trans-Pacific Partnership as a “smart move.”

“I will say this is one of the easier moves that Trump will be able to make on trade because when the administration in the lame-duck session decided not to pursue it, pretty much started to put it to bed, and Trump finished the job yesterday,” he observed.

“This agreement was bad for manufacturing. It was to the point that even the analysis, the propaganda that was supporting the TPP acknowledged that manufacturing was going to lose jobs,” Paul pointed out. “So they weren’t even trying to sweep it under the carpet.”

“If Trump is going to put manufacturing front and center and say our trade deals have to make sure that manufacturing is a winner and has a truly level playing field, that’s going to be a good thing for the United States. The TPP was the wrong direction. It was essentially extending a NAFTA-type model to many other parts of the Pacific Rim. The idea that that somehow would either insulate us from competition with China or lead us to create some sort of an American system in Asia – those ideas were both flawed. I mean, China’s gonna do what China’s gonna do, regardless of what we do. Those rules that disadvantaged American manufacturing aren’t going to make us a strong presence in Asia,” Paul said.

Marlow noted the globalist Left has criticized the withdrawal from TPP as giving China an opening to “get a lot of deals that we could have potentially gotten, and they’ll control much more of global trade.”

Paul said that argument was “simply untrue.”

“China is already out there with an infrastructure bank, using trillions of dollars that it has gained through our lopsided trade, to try to lure countries to following its ways. Regardless of the TPP or not, it’s going to do that,” he argued.

“I think the United States is going to be much better positioned if we try to achieve bilateral deals that are fair for both countries and don’t have a kind of global corporatist agenda attached to them,” he advised. “That’s strength. The naval fleet is strength in Asia. Smart diplomacy is strength in Asia. A trade deal that’s going to widen inequality within countries is not a good approach. Eventually the workers in Vietnam are going to look and say, ‘This is not getting us ahead,’ just like the workers in Mexico; I believe many of them don’t think that NAFTA is necessarily getting them ahead, as well.”

Paul agreed with Marlow’s point that negotiating numerous bilateral trade agreements, as the Trump White House prefers, could be harder work than big multilateral deals like TPP, but the end result is worth the effort.

“Initially, to the extent that we did free trade agreements, that’s how they were done,” he pointed out. “The Reagan administration was the first administration to negotiate free trade agreements. It did one with Canada. It did one with Israel. And that was largely the model that was followed through other presidencies. We had a deal with the country of Jordan, for example. We had a deal with Chile. It’s much easier to figure out what is a deal that’s going to benefit both countries, and I believe it’s truly possible.”

“When you have these large-scale agreements, the idea of one country getting some discernible benefits is completely eroded by, I think, the multinational companies’ interest in having platforms for low-wage production,” Paul criticized. “If it’s truly a free trade agreement, it’s going to be a couple of pages long. You make changes to tariff rates, you cut some non-tariff barriers to trade, and you’re done. But these multilateral agreements end up being hundreds or thousands of pages long because it is a bill of rights for global corporations, at the expense of manufacturing jobs in the United States. They have not served our interests.”

“The bilateral path is trickier, when you do it country by country. It certainly takes more work. But I think that you get more results for the United States that way, as well,” he said.

The Alliance for American Manufacturing’s letter addressed infrastructure spending, which Paul acknowledged is a tricky subject for advocates of limited government. He said even they should agree that “there are some challenges that only a large-scale institution can help solve, that no individual can necessarily solve.”

“A national infrastructure is certainly one of those things,” he contended. “It’s something that our Founders realized with canals, and Lincoln with a transcontinental railroad. This is a thread through our history that I think makes sense, and we have desperate needs.”

“It should not be a boondoggle, though,” he added. “These need to be projects of national significance that are going to produce returns for the American economy. I think the Trump administration intends to set up a knowledgeable advisory committee to ensure that’s the case, as well as to ensure that the benefits of this infrastructure investment are going to be recycled in our economy. That’s why Trump talks about ‘Buy America,’ so that we aren’t outsourcing our bridges to China.”

Paul pointed to the replacement of the San Francisco-Oakland Bridge, outsourced by former Governor Arnold Schwarzenegger to China on the grounds that it would save taxpayers $400 million, but the project ended up running over budget instead.

“If you use American steel, you’re not going to have those types of problems,” he said. “So I think we’re excited about the prospects of a very smart and strategic investment in infrastructure. We certainly have the needs for it. We have water systems that are more than a hundred years old. We need to modernize our infrastructure. It will make manufacturing more competitive, and it’s something that will grow our economy, which I think are broadly shared goals.”

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