Democratic presidential candidate John Delaney said on CNN Tuesday that Massachusetts Sen. Elizabeth Warren’s presidential campaign trade plan (laid out in a Medium post) would “prevent us from actually having a trade agreement with Germany.”
Facts First: Delaney is correct. Warren’s trade plan includes a lofty list of requirements for countries to meet as preconditions for entering any trade agreement with the US. For various reasons, Germany, along with a wide array of countries – including the United States itself – do not currently meet her standard.
Warren’s list of nine key requirements seeks to advance progressive goals for labor rights, the environment, human rights, religious freedom and more.
Warren also ruled out cutting trade deals with countries being monitored by the Treasury Department for currency manipulation, the criteria for which includes countries with a significant trade surplus with the US, as well as a large current account surplus of US dollars. In a semi-annual report this spring, the Treasury Department said nine countries were on its currency monitoring list.
That includes China, Germany, Japan, South Korea, Ireland, Italy, Malaysia, Singapore and Vietnam – all major trading partners with the US whose cumulative exports and imports added up to more than $1 trillion in trade with the US last year.
Under Warren’s plan, none of these countries would qualify for a trade agreement with the US. That doesn’t mean trade with these countries would stop — America currently doesn’t have trade deals with several of them, including China, Japan, and the European Union — but it would add serious hurdles to negotiating any new deals with countries that don’t meet Warren’s standards.
Trade with Germany in particular would be addressed in a larger deal with the European Union. Former President Barack Obama attempted unsuccessfully to negotiate an agreement with the EU, known as the Transatlantic Trade and Investment Partnership.
President Donald Trump’s trade team has taken preliminary steps to seek a deal with the EU, but major differences between the two sides exist, and an agreement remains out of sight.
In her Medium post, Warren wrote that she would renegotiate existing trade deals, like NAFTA, to ensure trading partners meet her standards.
Warren’s list of preconditions differs from conventional trade policy wisdom, which holds that trade deals, once implemented, encourage economic growth and enable developing countries to then pursue progress in areas like environmental standards, labor conditions and human rights.
Warren has called instead for withholding trade deals with the US until countries meet those standards, arguing it would bring about progress on the left’s priorities more quickly and in a more enforceable way. Warren also recognized in her post that the US did not live up to her requirements and pledged to raise the bar as president.
Asked to clarify whether she would seek to withdraw from existing trade deals if renegotiations were unsuccessful, the Warren campaign declined to comment.
This story has been updated with more information about which countries don’t have trade deals with the US.