January 21, 2020

Monday Morning Quick Take: Trade Issues, Budget

Categories: Budget /Trade

Trade Issues

Reuters writer Noel Randewich reported on Sunday that, “Growing numbers of freighters were backed up around the two busiest U.S. cargo hubs on Sunday because of a dispute between shipping companies and dockworkers that has led to a partial shutdown of ports along the West Coast.”

The article noted that, “By Sunday morning, 34 container ships, tankers and other cargo vessels were waiting to dock at the ports of Los Angeles and Long Beach, California, up from 32 on Saturday, said Lee Peterson, a spokesman for the port of Long Beach.”

After noting that Labor Secretary Tom Perez had been dispatched by the White House to California to meet with parties to the dispute, the Reuters article stated that, “The Department of Labor is working on Perez’s schedule, spokeswoman Xochitl Hinojosa said on Sunday.

“‘The secretary will meet with the parties to urge them to resolve their dispute quickly at the bargaining table,’ she said.”

In other trade related news, Jonathan Weisman reported in today’s New York Times that, “A number of countries — China most prominent among them — have long acted to hold down the value of their currencies against the dollar, helping their industries by keeping exports to American consumers cheaper and making goods from the United States more expensive.

“And while every president from Bill Clinton on has repeatedly criticized the practice, none have ever taken formal action against China or any other nation to try to stop it.

Now, a growing bipartisan majority in Congress is coalescing around a demand that could derail President Obama’s ambitious trade agenda before it really gets moving: include a robust attack on international currency manipulation or no deal.”

The article, which appeared in the Business Section of Monday’s paper, explained that, “The push for strong currency provisions — in legislation to grant the president ‘fast track’ trade negotiating authority, in a major trade deal with a dozen Pacific Rim countries, or in both — has presented the White House with what it fears is something of a Catch-22.

If members of Congress are to be believed, unless the president’s trade negotiator includes strict, enforceable prohibitions on policies to intentionally hold down the value of currencies, any completed trade accord will die on Capitol Hill. But, administration officials say, demanding the inclusion of such prohibitions would kill the trade deals before they were completed.”

Mr. Weisman noted that, “The administration has a crucial ally in Representative Paul D. Ryan of Wisconsin, the Republican chairman of the House Ways and Means Committee. The trade promotion authority bill he plans to push through his committee by March will include new reporting, monitoring and transparency rules to spotlight currency manipulation, but it will avoid retaliatory enforcement rules that he fears could prompt a trade war.”

And the Times article concluded by pointing out that: [Sen. Chuck Schumer (D., N.Y.) said he had advised the White House to embrace currency protection legislation now, either as part of the bill granting Mr. Obama trade promotion authority or as a stand-alone bill that would move with the Trans-Pacific Partnership. That way, the currency issue would subside before the partnership comes before Congress.

Mr. Schumer said Congress did not ‘have the votes’ for a plain Trans-Pacific Partnership or for granting trade promotion authority.

They actually might need it to happen,’ he said.”


Budget Issues

Jeremy W. Peters reported in Monday’s New York Times that, “The House speaker, John A. Boehner, said Sunday that he was ‘certainly’ prepared to allow funding for the Department of Homeland Security to lapse, raising the possibility that one of the government’s largest and most vital agencies could be shut down at the end of the month.”

Mr. Peters noted that, “In dispute is how to handle the issue of immigration. Last month, House Republicans passed a spending plan for the 240,000-employee department that included provisions to gut President Obama’s immigration policy. The bill would revoke legal protections for millions of unauthorized immigrants, including children, and put them at risk of deportation.

“The House measure stands no chance of becoming law…[L]awmakers are gone from Washington until next week, meaning that they have just four days in the Capitol in which to reach a deal before the department’s funding runs out on Feb. 27.”

Keith Good