[IMGCAP(1)]Although I live a few miles from Hofstra University, the site of Monday night’s Presidential debate, I didn’t have a ticket to the event. Instead, I spent the time trying to get to the Marriott next door, where viewers were promised the chance to meet one of the candidates afterward.
I didn’t get to the Marriott (the roads were closed off) and found out later that the candidates didn’t show up either. So I will defer to some experts who actually watched.
It turns out that free trade adherents were not completely pleased with the positions taken by either candidate during Monday’s debate.
“On the economy, the debate was less than impressive,” said Joe Brusuelas, chief economist at RSM US LLP. “It was more a series of claims and counterclaims than a true discussion about trade and globalization.”
“Trump is very much a trade protectionist. He wants to abrogate past trade treaties, and he doesn’t want to implement or pass the Trans-Pacific Partnership,” said Brusuelas. ”And attacks on the central bank are ill-considered. Central bank independence is a necessary ingredient to the long-term health of the economy.”
“Clinton’s position is a little unclear as to whether she truly opposes it [the TPP] or whether she might enthusiastically implement it if Congress passes it in a lame duck session,” he added. “She was enthusiastic for it while she was Secretary of State, but now she says she opposes it, which creates some confusion as to her true policy preferences.”
“My sense is that the economy would miss a genuine opportunity for small- and medium-size entities to expand their global presence if it’s not implemented,” he said. “The main innovation in the TPP is dedicated to facilitate the participation of middle market firms in global trade.”
“Both candidates are wrong on trade,” agreed Pam Villarreal, senior fellow at the National Center for Policy Analysis. “There is certainly no reason to become a closed economy and tax imports.”
The reason for Clinton’s switch of her support for the TPP is unclear, according to Villarreal. “It might have been political—both Trump and Sanders oppose it,” she said. “However, there are some valid criticisms of it. The problem is disagreement over intellectual property protection, especially for pharmaceuticals. Under the TPP the protection for intellectual property would shorten the amount of exclusivity for pharmaceuticals. It’s important for them to have protection for a reasonable time because of the cost of research and introducing new drugs to the market. If we don’t allow them to recoup their costs through exclusivity, then we run the risk of them not developing any new drugs.”
Although neither candidate supports free trade, Trump wants to impose an import tax on U.S. companies’ products that are manufactured overseas, Villarreal observed. “That may temporarily help boost jobs in the U.S., but it really hurts consumers,” she said. “Generally, when you have a closed economy, on net it hurts everyone. For example, Trump’s argument that NAFTA has hurt us is not really the case. Our exports to Mexico and Canada have dramatically increased. Mexico’s economy has improved—it helps Mexico earn more money and in turn they use that money to buy more American products and become consumers of our exports.”
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