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Trans-Pacific Partnership

American Government Special Collections Reference Desk

American Government

Trans-Pacific Partnership

Senator Sherrod Brown
Congressional Record: 114th Congress
January 11, 2016

Mr. BROWN. Madam President, after months of delay, last fall we finally were able to see the text of the Trans-Pacific Partnership, text that corporate lobbyists had access to long before the American people and Members of Congress and their staffs did. After examining the provisions in this deal, it is clear that far too many of these provisions sell out American workers and American jobs.

In the months leading up to the release of this deal, I warned that too often our trade agreements as far back as NAFTA and the Permanent Normal Trade Relations with China--not a trade agreement per se, but it had the same effect in many ways--the Central American Free Trade Agreement, the South Korea Free Trade Agreement--these trade agreements amounted to corporate handouts and worker sellouts. I warned our negotiators that they needed to do more to ensure that the deal created a truly level playing field for American workers and American businesses. Unfortunately, that is not what happened, particularly when it comes to standing up for the American auto industry.

We hear often about the supposed opportunities that trade agreements will create: opportunities for more jobs, opportunities for small business, opportunities for more exports, and for economic growth. But when I look at the Trans-Pacific Partnership, I don't see these actual--let's call them offensive opportunities--and by ``offensive opportunities'' I mean opportunities for American products to break into new markets. This is not just playing defense, but playing offense so that we can export into these new markets.

Cheerleaders for this agreement--whether it is the Wall Street Journal editorial page, most Republicans in the Senate, or whether it is Republican leadership in the House, whether it is corporate CEOs or whether it is the White House--say that new markets will be opened for American cars, but we have heard these empty promises before.

Under TPP, many of these new markets will not be opened day one--as in the case of Malaysia and Vietnam. They won't be open in day two or year one or year two. It will be more than a decade until American automakers have full access to these closed markets.

The TPP will do nothing to level the playing field with our top competitor, Japan, or to change Japan's distinction as the most closed auto market in the world. We know it has been that in the past. We know it is that today. There is nothing in here that would change or open Japan's market, to sell into the Japanese auto market.

Carmakers in Ohio and carmakers across the country will compete with huge numbers of Japanese imports. We don't have it today, and under TPP we won't have the same opportunity to export to Japan. That is because for decades Japan has used barriers other than tariffs to keep their markets closed. Tariffs are one way. They charge huge tariffs, causing the price of the product that you import--let's say into Japan--to be too high for the Japanese to afford, but that is not what Japan does. Their tariffs are already at zero, so an agreement on tariffs will do nothing to create a level playing field. Japan keeps our products out in much more creative ways than tariffs.

We have seen this in the wake of the Korean Free Trade Agreement. Even after our trading partners promised to remove these barriers to allow American cars into their market, they often don't. Opening up Japan's market didn't work in the 1980s, it didn't work in the 1990s, and it didn't seem that it will be any different under the Trans-Pacific Partnership.

If there aren't new offensives--offensives in the sense of selling into those countries--then I would expect our negotiations at least make sure this trade agreement protected American carmakers and workers from a flood of cheap foreign competition. I would hope they made sure the benefits of the agreement would only go toward its members who have been part of the negotiating process and made concessions, but it is not. It is not just the TPP countries.

That is now how I read the text, particularly when it comes to something called the rules of origin for autos. These rules of origin provide provisions to determine how much of a car is made in the TPP region, and TPP rules are weaker than NAFTA's. That means how much of the car is actually made in the TPP countries, how much of the car must be made in the TPP countries to count as a TPP product.

That means 62.5 percent of a vehicle must be made in the NAFTA region in order for it to qualify for the benefits of the NAFTA agreement. But only 45 percent--much less than NAFTA and in some cases even less than that--of a car has to be made in the TPP region to qualify for the benefits of the agreement. Think about that. Under TPP, less than half a car has to be made in TPP countries, which include Canada, Mexico, and the United States, to receive the benefits of TPP.

So what does that mean? That means more than half of the components in the car--more than half of the car--can be made in China. So China can backdoor much of its supply chain into the Trans-Pacific Partnership. Then these cars, mostly made in China, will get the benefits of the Trans-Pacific Partnership, even though they aren't in the Trans-Pacific Partnership. As more countries join TPP, that 45-percent rule will become an even weaker standard, and fewer and fewer of our cars will come from the U.S. auto supply chain.

I never thought I would be able to say this, but this agreement makes NAFTA--an agreement I fought hard to defeat 20 years ago--look good. TPP's auto rules were written for Japanese automakers to the benefit of China and at the expense of American auto jobs.

TPP will jeopardize the livelihoods of thousands of Americans, including up to 600,000 Ohioans, whose jobs depend on the U.S. auto supply chain. These aren't just statistics. We are talking about real workers in real plants in real companies in real communities, in Ohio and across the country, with bills to pay and families to feed.

They fought hard to bring the American auto industry back to life. Their hard work made the auto rescue a success. Last year, 2015, was a record year for automakers. We can't pull the rug out from under them now with a trade deal that sells out American auto jobs.

Think of what we have done. In 2010, only--maybe fewer than this--10 million vehicles were made in the United States. Today that number is close to 17 million. Chrysler posted 7 percent gains in sales last year. GM and Ford were not far behind with 5 percent. I am proud to say the best-selling American vehicle for 34 years running, the Ford-150, runs on engines produced in Lima, OH. Five years ago the American President, President Obama, did the right thing when he personally committed to saving the American auto industry.

If you ask people in Ohio, in Toledo, in Avon Lake, in Cleveland, in Warren, in Lordstown, they know how important the auto rescue was. We were losing hundreds of thousands of jobs a month at the beginning of President Obama's term. Since the auto rescue, the next year--we have seen job growth in this country for 70 months in a row, 70 consecutive months of job growth starting with the auto rescue.

Now I hope the President will do the right thing again and go back to the drawing board on the aspects of this trade deal that we know will cost American auto jobs.

I yield the floor.

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