President Trump’s Opioid Plan Falls Short

President Trump declared his determination to end the opioid epidemic — over the next “7 years” in a New Hampshire speech.

The location was not a coincidence. New Hampshire has the third highest rate of death by opioid overdose — ending the crisis a cornerstone of state politics.

Opioid addiction and related deaths have reached a crisis point in the United States.

The death of more than 64,000 Americans in 2016 (the last year for which there is total data) underscores the urgency of the problem.

My head was nodding in agreement as the President tick-off his administration’s planned actions:

  • Research to develop non-addictive pain medications.
  • New pain management training for doctors to discourage unnecessary use of opioids.
  • Changing Centers for Medicare and Medicaid Services (CMS) opioid prescription reimbursement policies to minimize over-prescription and over- dispensing.
  • Increased spending for in-patient treatment of addicts.
  • Increased reimbursement for mental health treatment in the Medicaid program.
  • Donations – by the manufacturer – of two boxes of the overdose antidote Narcan to every high school and college in the country.
  • Stiffer jail sentences for drug dealers.
    • Even the potential of the death penalty for drug dealers
  • New vocational training programs in prisons to help first-time offenders get the skills they need to become “productive citizens” when they leave prison.

Illegal Immigration Not the Root Cause of Opioid Crisis

And then the President went further – returning to familiar themes we hear at campaign-style rallies, reporter gaggles and other formal speeches:

  • The Opioid Crisis is worsened by Sanctuary Cities that protect MS 13 members.
  • Fentanyl is smuggled in from Mexico. USA must build a southern border wall to keep smugglers and their drugs out of USA.
  • Countries that have the death penalty for drug dealers don’t have a “drug problem”. “Maybe the USA needs a death penalty for drug dealers.”

One does not have to support Sanctuary Cities to see how coincidental the relationship between sanctuary cities and a flood of drugs on the streets of America.

MS13 is a criminal cartel formed in Los Angeles in the 1980s – who deal in drugs and other criminality because that’s where the money is! The majority of members are birthright citizens who can be imprisoned but not deported.

Didn’t Attorney General Sessions, sitting in the audience, brief the President on current law?

  • There is a federal death penalty for drug dealers who peddle more than $20 million of “junk”.
  • The majority of drug convictions are in state criminal courts muting a federal death penalty.

Time for a War on Fentanyl

116 preventable deaths every day – 365 days a year for several years is not an epidemic — it is a “black plague” requiring drastic action not “happy talk”!

Most of these deaths involve a synthetic opioid known as fentanyl.

Fentanyl is a legal drug, synthetic opioid, used in some medically appropriate anesthesia and pain killers – under government license.

The National Institutes of Health (NIH) reported an increase of 512 percent in fentanyl related opioid deaths from 2012 to 2016.

A 512 percent increase in deaths from the illegal distribution of a controlled substance is an exigent circumstance.

The distribution of fentanyl on American streets must be stopped – stopped now — stopped at the source.

Kill the Opioid Crisis at the Source: China

The principle source of illegal fentanyl, today, is China.

The opiate trade with China dates back more than two centuries to when American clipper ships made the dangerous voyage around the Cape of Good Hope to trade opiates, tea, and silks with China.

Clipper ships have been replaced with airplanes that carry cargo for the United States Postal Service (USPS).

In January,2018, following a year-long investigation, the United States Senate reported $766 million worth of fentanyl was “imported” from China via internet purchases delivered by the USPS. The Senate further reported the postal service had failed to purchase or deploy electronic tracking equipment to identify and stop suspicious packages from China or anywhere else.

According to NBC News, industrial quantities of Chinese fentanyl slip into the USA from Mexico.

This fentanyl crosses at perfectly legal ports of entry smuggled in cars or trucks. In terms the President would understand, fentanyl drives through the “gates in the wall” he wants to build.

The Rand Corporation argues, stopping drug trafficking through legal ports of entry requires the deployment of additional uniformed and trained personnel using sophisticated electronic detection equipment. Like the postal service, US Customs has failed to deploy these proven and effective assets.

China Can Stop Fentanyl Trade

The Chinese government gives lip service to cracking down on the fentanyl trade but has done little or nothing to close down a plethora of online sites in Chinese cyber-space that are selling fentanyl.

The President should impose serious and immediate trade penalties on China for their failure to crack down on the $766 million China to USA illegal fentanyl trade.

  • More than tariffs, perhaps some outright product bans.
  • Conduct an evidentiary hearing at the UN Security Council.

In addition, the President should issue an Executive Order authorizing the Department of Homeland Security (DHS) and USPS to purchase and deploy the currently available electronic tracking equipment needed to identify suspected fentanyl shipments from China or Mexico.

The equipment must be installed and operating reliably within 90 days – by the first of July! There can be no excuses.

Then the President must activate sufficient numbers of well-trained National Guard members to support, train, and supplement the postal and customs personnel.

The goal of this effort, in addition to all the other steps the President suggested in New Hampshire, should be to reduce the death rate from 116 people per day to less than 50 per day by the end of 2018 and to reduce that number to less than 25 a day by the end of 2019.

Cutting the fentanyl supply chain is the one thing that will make the rest of President Trump’s “plan” work to eradicate death by fentanyl.

Illustration courtesy of The Brookside Associates

Mexico

We Can Fix the Mess NAFTA Created for US/Mexico Trade

The Canada and USA Bi-lateral Free Trade Agreement was implemented in 1990.

At that time I was the Program Manager for a global logistics re-engineering effort at Unisys. This was a first-of-its kind Logistics System (people, process and enabling technology) seamlessly integrating manufacturing plants and distribution centers located in five countries – including the United States and Canada – on three continents.

The system tied every component (by “country of origin”) plus all labor added at every level of the manufacturing process directly to the unique (serial numbered) computer peripheral finished product.

The granular ability to track parts and tie them, across the global supply chain, to the individual worker who had handled them led to an agreement with the US Customs Service to provide entry documents electronically to the US Customs Service for pre- approval.

The team quickly created electronic entry documents to satisfy the new Canadian customs requirements – making Unisys an early beneficiary of the agreement.

After some initial hesitance by the Canadian people – who feared becoming a defacto 51st state – free trade between the USA and Canada has worked very well — accelerating negotiations for a tri-lateral North American Free Trade Agreement (NAFTA) — signed into law by Bill Clinton in 1993.

Why the Assumptions of NAFTA Failed at our Southern Border

NAFTA has not worked as well with Mexico. During negotiations, many acknowledged the challenges of integrating two “developed” economies with a third that was still “developing”. But negotiators underestimated those challenges.

The US government expected that free trade would expand economic opportunity in Mexico. Expanded opportunity, they argued, would reduce the flow of illegal immigrants seeking employment in the United States.

The hopes for a broader improvement in the economic lives of “average” Mexicans have not been realized.

NAFTA and US Jobs

Trade between the United States and Mexico grew exponentially under NAFTA. But as more raw materials moved south to be returned as manufactured goods — the historic USA trade surplus became a persistent 25% trade deficit. https://www.census.gov/foreign-trade/statistics/highlights/topcurmon.html

The deficit will continue to grow as Mexico aggressively imports American manufacturing jobs. https://www.reimagineamerica.org/saving-us-economy-starts-now-keep-oreo-cookies-in-chicago/

But not all job-shifting by US manufacturers to Mexico is negative for American workers.

The “cross border supply chain” has the potential to strengthen employment across North America.

The Ford Solution

Made-in-America is central to Ford Motor’s brand strategy.

When they announced the development of a 2018 manufacturing line in Mexico to build low margin Ford Focus hybrids – they simultaneously announced the existing Michigan plant will be upgraded to produce high priced SUVs and trucks.

The $8/hr jobs go to Mexico to preserve and increase $60/hr jobs in Michigan.

Bombardier – the Canadian airplane manufacturer makes a similar argument — its Mexican fuselage plant results in increased employment in the United States and Canada. http://www.economist.com/news/briefing/21592631-two-decades-ago-north-american-free-trade-agreement-got-flying-start-then-it

US/Canadian Free Trade Suggests a Template

Auto manufacturing on both sides of our northern border increased as a result of liberalized Direct Foreign Investment (FDI) regulations in Canada.

It created a flourishing cross border consumer economy with Canadian “day trippers” flocking to US shopping centers to buy attractively priced merchandise.

The US market for Canadian energy products and precious metals increased as a result of lower costs and ease of transport.

Hollywood studios have taken advantage of the lower production costs in Canada to develop significant satellite operations without fear of intellectual piracy.

USA/Canadian imports and exports tend to balance each other out – resulting in real GDP growth in both countries.

Canada is, also, our most reliable ally. https://www.washingtonpost.com/news/checkpoint/wp/2015/03/11/canadas-highway-of-heroes-the-patriotic-tradition-lives-on-after-afghanistan/

Building a Beneficial US/Mexico Relationship

A mutually beneficial trade relationship with Mexico is entirely possible – a relationship that looks more like our Canadian trading relationship.

More manufacturing jobs are an opportunity to expand the Mexican middle class but not all of those jobs have to come at the expense of American workers.

Rising factory wages in China create an opportunity for Mexico to compete globally to manufacture products destined for North American consumers.

To capitalize on this opportunity, Mexico must rapidly improve public education. The US can help through the Peace Corps, Teach America and other non-governmental organizations.

Build a more Efficient Cross Border Supply Chain

Further, strengthening the North American supply chain so that raw materials, sub-assemblies, and finished goods can move smoothly, safely, rapidly and legally across our southern border will require better highway and rail transport from the Mexican interior.

Joint investment in developing infrastructure – through the Inter-American Development Bank and cross border investment (http://www.marketwatch.com/story/warren-buffett-and-bill-gates-like-railroads-and-you-should-too-2015-09-17) — will create skilled and unskilled labor jobs in Mexico – drawing more economic migrants back to Mexico from the US while growing GDP on both sides of the border.

Renegotiate NAFTA

Growing trilateral GDP was the impetus behind NAFTA. It remains the objective, but the agreement has to be renegotiated with assumptions based on reality.

What is important is to grow the middle class throughout North America. This is not a zero sum game!

The United States and Canada can help accelerate Mexico’s economic development but Mexico must take the first step by cleansing itself of rampant internal corruption.

In addition to demands for better schools, the emerging middle Mexican middle class will demand effective public safety and better social services. NAFTA negotiators must support these demands.

Further, they must link renegotiation to forceful actions by the Mexican government to deal with international drug smuggling and human trafficking.

Nothing undermines NAFTA more than the volatile southern border that has existed since General Pershing chased Poncho Villa back across Rio Grande in 1916!

Made In China

China versus USA: Piracy on the High Seas of International Trade

While Thomas Jefferson was negotiating with France over the Louisiana Purchase, pirates operating out of Tripoli (now Libya) were menacing American mercantile ships in the Mediterranean – imprisoning and ransoming crews — and impeding the expansion of American trading relationships with Southern Europe.

Expanding global trade was imperative to the survival of the Republic.

In their book Thomas Jefferson and The Tripoli Pirates, authors Brian Kilmeade and Don Yaeger offer an engaging account of America’s first response to piracy on the high seas.

President Jefferson sent the US Navy and Marines.

Supported by Congress, Jefferson took major risks — ranging from the bombardment of Tripoli to the Trade Embargo of 1807 — to establish the RIGHT of American merchants to trade anywhere at any time without fear of assault by pirates or the British Navy. https://www.monticello.org/site/research-and-collections/embargo-1807

USA Founded on Principle of Trading Freely

Profitable trade has driven American economic development since the first European settlements.

For the next +/- 150 years, the colonies traded abundant natural resources (animal furs, lumber and fish) and commercial agricultural products (cotton, tobacco, molasses, sugar) for manufactured products and luxury goods (silk, tea).

More than 20 percent of North American trade was carried by ships built and owned by colonial merchants by 1773 — when the Boston Tea Party previewed the coming rebellion.

The British government should have taken note.

The seeds of the American Revolution were spread in reaction to British trading policies these merchants considered oppressive and confiscatory.

The British East India Company imported tea from China and sold it in the colonies — forbidding colonial merchants to engage in direct trade with China.

Not long after the Revolution the Stars and Stripes flew over the Canton, China harbor.

Our early trade with China was lopsided, corrupt, and tightly constrained by the Chinese Emperor — not very different from our trade with China today.

How China Plays by Different Rules

Since World War II, American trade policy’s been built on the assumption that strong trading relationships lead to strong friendships, a “level playing field” for expanding trade, and a strengthening global middle class.

A middle class opposed to war and eager to buy American manufactured and agricultural products.

China and the United States resumed trading after a thawing of relations during the 1970s.

Rather than level the playing field – American concessions as acts of “friendship” — tariff reductions — cost jobs.

But there’s no reciprocity from China. America imports 91 percent more from China than it exports to China.

China’s emerging middle class has shown a willingness to pay for quality American made goods but their government continues to protect Chinese businesses from foreign competition.

China’s global power house factory system was built on what the World Trade Organization often finds to be unfair trading practices: erecting barriers to some products  and “dumping” others.

Apple Inc. Suffers Chinese Trade Piracy

For example, CEO Tim Cook argues Apple cannot manufacture iPhones in the United States because wages for Tool and Die Makers would add 40% to the cost of iPhone.

The facts are different. The manufacturing cost difference would be about $2.50 for every $700 retail phone

The real reason – China requires products sold in China to be made in China.

China is Apple’s largest iPhone market.

But acquiescence has not protected Apple from Chinese trade piracy.

Just last week, Chinese Courts ruled that a Chinese (defendant) firm can manufacture and sell worldwide goods stamped with the iPHONE logo and the internationally recognized registered trademark symbol (“R”) without a license from (compensating) Apple. http://www.bbc.com/news/business-36200481

Counterfeiting goods is big business in China.

It is government sanctioned 21st century piracy!!

The Real Reason Behind our Murky Relations

With such an abysmal record on trade, why is China is still a “most favored nation”?

Why are China’s military provocations in South China Sea, cyber assaults on our government agencies and overt military spying met with pronouncements of concern rather than actions of real consequence?

Easy: China holds nearly $2 Trillion – 1/3 of the total US Debt in foreign hands.

We Must Retool Our Assumptions about China

President Obama and his successor – whoever she or he may be – must make clear to China bilateral trading relationships and genuine friendships are not necessarily the same thing.

We trade with nations we do not consider friends – for example Vietnam or Russia.

BUT – we do favors – eliminate tariff barriers – only for our friends.

The United States economy – troubled as it is – is still the largest economy in the world. (http://www.investopedia.com/articles/investing/022415/worlds-top-10-economies.asp)

If China doesn’t sell their goods to the United States who will buy them?

If China does not buy US Treasuries where will they safely invest their dollars?

We have economic leverage. Chinese outrages have stirred the administration but quick, bold trade renegotiation is required.

China should have no doubt we remain committed to eliminating any and all piracy.