The Obama administration is inflating the benefits of its free-trade deal with Pacific Rim nations by claiming falsely that it would deliver “tax cuts” to 18,000 products made in the U.S., a progressive watchdog group said Monday.
The analysis by Public Citizen, which opposes the Trans-Pacific Partnership agreement, said the U.S. exported goods in 8,687 tariff categories to the 11 TPP nations in 2014, and many of those items already are duty-free.
“The administration owes the public and Congress an explanation of how it cooked up what obviously is a false ’TPP tax cut’ number, but more broadly touting a large number of tariff lines cuts misdirects attention from the real question of whether the TPP will create more American jobs or cause damage,” said Lori Wallach, direct of Public Citizen’s Global Trade Watch.
The group said the administration also is touting benefits so small, in some cases, that the economic impact on the U.S. would be meaningless. It said an administration document promoting the tax cuts “oddly highlights goods that TPP nations simply do not buy in volume from anyone.”
“Consider the 34 percent ’tax’ cut by Vietnam on Alaskan caviar,” the report said. “In 2014, Vietnam’s per capita GDP was about $2,000, and about $150,000 worth of caviar was imported by Vietnam from anywhere. Or Vietnam’s 5 percent tariff on skis from Colorado. Vietnam imported only about $50,000 in skis in total.”
President Obama wants Congress to approve the TPP this year, but he needs considerable Republican support. Most Democrats and their labor allies are opposed to the pact, saying it will harm high-paying union jobs in the U.S.
The administration believes TPP will boost the economy by increasing U.S. exports and serve as an economic counterweight to China’s influence in the Asia-Pacific region.
A spokesman for the U.S. Trade Representative said Public Citizen’s report is “riddled with errors, misrepresentations, and evasions.”
The spokesman said he report uses incorrect tariff information and “makes an upfront assumption that thousands of tax cuts should be ignored.”
For example, he said, the group’s report “assumes that if Vietnam removes its 70 percent tax on American cars while Malaysia removes its separate 30 percent tax on American cars, that only one tax has been removed.”
• Dave Boyer can be reached at dboyer@washingtontimes.com.
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