BPC Comments Regarding Administration Report on Significant Trade Deficits

“Please accept these comments on behalf of Steve Bell, Senior Director at the Bipartisan Policy Center (BPC) in response to the International Trade Administration’s notice of April 17, 2017 seeking input on the Executive Order Regarding the Omnibus Report on Significant Trade Deficits with selected partners. We hope the analysis below is helpful in advancing a fuller understanding of the complex factors and practices involved in bilateral trade deficits and what they actually reveal about our trade policies and relations, particularly as it relates our trade relationship with Mexico and Canada under the North American Free Trade Agreement (NAFTA). The analysis highlights that trade deficits are largely determined by economic forces such as changes in investment and savings and the exchange rate for the U.S. dollar, and not by specific trade policies or agreements. Misguided attempts to address trade deficits, which are often reflective of U.S. economic strength and consumption rather than dysfunctional trade relationship, through wholesale repudiation of longstanding agreements like NAFTA may, in the long-term, do more harm than good.”