MEMPHIS: December 09, 2016. FedEx chairman and CEO Fred Smith has warned Donald Trump that failure to endorse a revised Trans Pacific Partnership (TPP) would be a severe mistake.
Speaking at the National Council on Competitiveness Forum in Washington DC this week, Smith suggested trade had already made America great – a Trump promise during his election campaign – "and expanding trade has been a bi-partisan pursuit for over 80 years. The failure to continue to do so would be a severe mistake with enormous consequences for America and the world," the FedEx founder added.
Noting calls for protectionism as a solution to a perceived, rather than actual, lack of U.S. economic growth in recent years, Smith pointed out what happens next with "the best example of protectionism from our own history": The Smoot-Hawley Act of 1930 raised tariffs on more than 20,000 items, contributed to a 66 percent decline in world trade from 1929 to 1934, and led to the Great Depression.
"In 1934, with the leadership of [U.S.] secretary of State Cordell Hull, Franklin Roosevelt overturned the Smoot-Hawley Act and established the trade policy the United States has pursued ever since—one of competitive, open markets," he explained.
In addressing the TPP agreement negotiated by the U.S. and 11 other countries and now ratified this week by Japan's parliament, Smith said a Trump administration should endorse a revised TPP by addressing any concerns it sees and make any additional improvements to promote trade, rather than restrict it.
In his wide-ranging discourse pitched at a level a Grade-school student could understand, Smith also said that while the NAFTA agreement could be updated and strengthened, Trump's threatened withdrawal would have massive economic repercussions and would be "catastrophic" for the U.S. economy.