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Politics & Government

Trump's TPP Withdrawal Draws Mixed Opinions from Milwaukee Business, Labor Reps

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U.S. President Donald Trump shows the Executive Order withdrawing the US from the Trans-Pacific Partnership (TPP) after signing it in the Oval Office of the White House in Washington, DC on Monday, January 23, 2017.

Business and labor leaders across Wisconsin have different feelings about a move President Trump made. This week, he ordered the U.S. to withdraw from the Trans Pacific Partnership, or TPP. The Obama administration had been negotiating the huge trade agreement, involving the United States and Pacific Rim nations.

Michael Rosen calls the TPP flawed from Wisconsin’s vantage point. He teaches economics at Milwaukee Area Technical College and leads the faculty union there.

Rosen says companies here do a fair amount of business with Asian Rim countries – including firms that export medical equipment, as well as vehicle parts and industrial machinery. Yet he says the proposed TPP would not have provided great benefits for many of them.

“What the TPP promised was 18,000 tariff cuts for American exporters but the economic significance of these for Wisconsin exporters and Wisconsin workers were quite negligible. For example, Vietnam was going to eliminate tariffs on skis, snowplows and caviar. First, it’s an impoverished country and it’s a tropical country. The number of people buying skis and snow plows in Vietnam would be negligible,” Rosen says.

He says the only benefit TPP would have been is increased profits for certain corporations. “The most significant part of TPP pertained to investment, not trade, and those investment provisions made it attractive for American businesses to move jobs and production offshore and that has always been used to undercut American workers’ demands for higher wages, unionization, etc.,” Rosen says.

Rosen says he’d like the Trump administration to negotiate fairer trade deals. “A plan that includes environmental conditions, includes labor standards and that does not create incentives for investment, making investment in low wage countries attractive for U.S. corporations,” he says.

One business group that favored the TPP is the Metropolitan Milwaukee Association of Commerce. President Tim Sheehy said, at a recent forum, that the deal wasn’t perfect, but the U.S. should stay engaged because 90 percent of the world’s customers are located outside the U.S.

“I don’t think it pays to have the U.S. sit on the sidelines and have trade agreements set up by China in a certain part of the world and we’re sitting on the sidelines. But I want to make sure that it’s done in a fairer way, that we’re not being dumped on by other markets and that when we go into other markets we’re not being priced out because they’ve manipulated currency and lots of other things,” Sheehy says.

The partnership would have had a positive effect on Wisconsin, according to Chad Hoffman. He’s the MMAC’s export development manager.

“By reducing the tariffs, we are on a more level playing field and it helps keep our products more competitively priced as well,” Hoffman says.

Hoffman says TPP would also have helped Wisconsin in that it would have expanded trade to nearly 20 more countries. And, he says, the deal could have helped lower the price of goods some firms here sell.

“This would have allowed companies to procure products from any of the countries involved in TPP and it would have been a competitive advantage for them,” Hoffman says.

Most customers demand competitive prices. Hoffman acknowledges that, with trade deals, there are always winners and losers, depending on the particular industry.

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