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American officials are currently negotiating a free-trade deal known as the Trans-Pacific Partnership with their counterparts in Japan and 11 other Pacific Rim countries. If successful, the benefits to American consumers and producers would be significant. By some estimates, an agreement could grow the U.S. economy by $77 billion a year by 2025 — and by similar amounts for our trading partners.
Given the continued weak state of the U.S. and global economies, passing the TPP should be a no-brainer. Some members of Congress disagree, however. Rep. Sander M. Levin, D-Royal Oak, the ranking Democrat on the House committee overseeing U.S. trade policy, is pushing for an alternative approach — so-called “managed trade.” Levin and his allies are threatening to deprive U.S. consumers and producers of the benefits of the TPP unless the Big Three American automakers — Ford, General Motors, and Chrysler — are given special treatment.
Under their managed-trade proposal, the current 2.5 percent tariff on imported Japanese cars and 25 percent tariff on imported Japanese trucks must remain in place. His proposal would also allow the Big Three to determine whether U.S. tariffs are ever reduced or eliminated. Of course, there’s little chance that any company would ever give the green light to lower prices for their competitors.