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Thune: Trade Deals Like TPP are Good for South Dakota

Sen. John Thune (R-SD)
Sen. John Thune (R-SD) (Photo by Aaron P. Bernstein/Getty Images)

President Trump is spending some quality time in Germany this weekend at the G-20 Summit.

The Russian influence on the 2016 presidential election is clearly a news topic. But underlying the discussions is trade.

It’s a topic that I addressed in an interview with Sen. John Thune on The Patrick Lalley Show on Thursday (July 7).

As I said last during a separate segment, international trade has been good for South Dakota. Specifically, open markets, lower tariffs and uniform regulation means more money in the pockets of South Dakota farmers, particularly from livestock.

Thune reinforced that position.

The North American Free Trade Agreement, NAFTA, is consistently derided as a terrible deal by the president. The Trump Administration says it plans to renegotiate the deal, first passed during the Clinton years.

Thune agreed that NAFTA has been largely positive for South Dakota.

“I would argue that,” he said. “There are some who would say not, but in general, in the main, yes.”

Trump already pulled the United States out of the pending Trans Pacific Partnership, the famed TPP.

That agreement between 12 nations on the Pacific Rim – but not China – would have reduced tariffs significantly, making South Dakota livestock that much more attractive in places such Japan, Vietnam and Australia.

Like NAFTA, there was potential for local farmers to profit, Thune said, and in turn fuel the broader South Dakota economy.

“I’m still at a loss why they were so down on the Trans Pacific Partnership,” he said.

The alternative going forward is to negotiate separate deals with individual countries, which critics argue undermines the ability of businesses to uniformly sell products in large swaths of the world.

The TPP included Canada, Mexico, Japan, Australia, New Zealand, Chile, Peru, Malaysia, Singapore, Vietnam and Brunei.

Bi-lateral agreements between individual companies can help, in Japan for example. But it has to start soon, Thune said.

The Japanese currently place a 38 percent tariff on American beef. The TPP would have reduced that to 9 percent, Thune said.

“If they want to do this, if they do want to go after bi-laterals, let’s do this,” he said. “We can’t afford to wait.”

The politics are messy. There are plenty of free-trade Republicans, such as Thune, who supported the plans in principle. That support is particularly strong in agriculture states.

The populist message embedded in the “bring back jobs” slogan of the 2016 campaign has its backers in the left-leaning labor interests and manufacturing communities of the Rust Belt and elsewhere.

Independent Sen. Bernie Sanders of Vermont, for instance, is an opponent of TPP and supported withdrawing.

The president is a Republican, but clearly not on board with the free-traders. Whether he can make up for the advantages of multi-nation agreements by negotiating them one at a time is a huge challenge that other presidents of both parties have found daunting.

Whatever the eventual outcome, it’s clear that pulling out of Pacific deal has opened the door for China to spread its influence.

“I think China got enormous additional leverage in the region,” Thune said. “Because all those players out there now say, OK, the U.S. isn’t serious about playing ball here, our next big player in the region is China.

“So I think it enhanced their position and that’s unfortunate. That region, Asia, for a lot of reasons, we need to be engaged on an economic level — trade, politically, diplomatically — the stakes are very high in that region of the world.”

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