Obama begins sales pitch on trade to wary US public

WASHINGTON — President Barack Obama on Saturday began a broad sales pitch to the US public about the merits of free trade deals, an area in which he faces stiff resistance from many in his own Democratic party.

Obama has said he wants to work with Congressional Republicans to finalise the Trans Pacific Partnership (TPP) trade pact, an agreement that would stretch from Japan to Chile, covering 40 per cent of the world economy.

“I’m the first to admit that past trade deals haven’t always lived up to the hype,” Obama said in his weekly address. “But that doesn’t mean we should close ourselves off from new opportunities.”

The first step in working with other nations to finalise the TPP deal is to pass “fast track” legislation to streamline the passage of trade deals through Congress.

Polling data from the Pew Research Centre shows Americans from both parties are skeptical about trade. Only one in five Americans think trade creates jobs, and only 17 per cent believe trade leads to higher wages.

Congressional Republicans have been supportive of trade deals. Senator Orrin Hatch, the Republican chairman of the Senate Finance Committee, has said he hopes to introduce a “fast track” bill in February.

Senate Majority Leader Mitch McConnell said in a statement that Obama needed to “continue what must be a sustained effort to move his own party forward” on working on trade legislation.

Labour and environmental groups allied with Democrats have been pushing hard against the idea. Even among the Obama-friendly crowd at the Democratic National Committee on Thursday, several people wore “Stop Fast Track” stickers.

Obama said fast track authority would protect workers and promote businesses, noting that exporting companies pay higher wages.

He cast it as a way to push back against the exporting powerhouse of China.

“As we speak, China is trying to write the rules for trade in the 21st century,” Obama said. “We can’t let that happen. We should write those rules.”

Separately, US Senator Bernie Sanders lashed out last week at widespread use of offshore tax havens by US companies, and the liberal independent targeted a group that represents chief executive officers (CEOs) of big corporations and wants corporate taxes lowered.

Sanders, top opposition member on the US Senate Budget Committee, released a report decrying what he called “legalised tax fraud”. It showed that 111 of the 201 member companies of the Business Roundtable are sheltering more than $1 trillion in profits overseas, where they are not subject to US taxes.

Using the Cayman Islands, Bermuda and other tax havens, these companies have saved more than $280 billion in tax liabilities, Sanders concluded in the report.

Sanders noted that Business Roundtable companies account for roughly half of an estimated $2 trillion in profits held overseas by US companies under a loophole that lets them defer taxation on profits from overseas subsidiaries.

The “last thing” Congress should do is provide more tax breaks to such profitable businesses, Sanders said.

“Instead of sheltering profits in the Cayman Islands and other offshore tax havens, the largest corporations in this country must pay their fair share of taxes so that our country has the revenue we need to rebuild America and reduce the deficit,” Sanders added in a statement.

Many business groups have sought a “repatriation holiday” that would allow them to bring home overseas profits at a reduced tax rate.

The senator’s report relies heavily on data compiled in June 2014 by Citizens for Tax Justice, a left-leaning activist group, and US Public Interest Research Group, a consumer advocacy group that says it “stands up to powerful special interests”.

The report said the data come from Securities and Exchange Commission filings compared with offshore subsidiaries listed in a 2008 Government Accountability Office report on tax havens.

Among Business Roundtable members listed in the report with large amounts of profits held abroad were General Electric Co.  with $110 billion, Pfizer Inc. with $69 billion and IBM Corp. with $52.3 billion.

A spokeswoman for the Business Roundtable said the group was studying the report and could not immediately comment on it.