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Obama on trade policy: 'It's either gonna be us or it's gonna be China'

·Markets Correspondent

Implementing the Trans Pacific Partnership (TPP)--a trade agreement with 11 other countries in the Asia-Pacific, including Canada and Mexico--is a key agenda goal of the Obama administration.

However, President Obama says that the importance of smart trade has been mischaracterized during the presidential campaign.

“The key thing for Americans to understand is somebody's gonna write the trade rules in the future. It's either gonna be us or it's gonna be China. And if you're concerned and worried about whether China is gonna out-compete us in the future, then you definitely should want to pass this trade legislation that establishes a fair and level playing field for us,” he said.

The President added that if we are thinking about the dangers of China dominance, this deal should go through.

“China is chomping at the bit to control what is going to be the most populous and ultimately probably the most lucrative market in the world. And what we've done is negotiated an agreement to make sure U.S. businesses, U.S. workers are getting a fair shot at competition there,” he told Yahoo Finance. “China's not party to this deal, but all the countries that are surrounding China are parties in this deal. And if they know that we are committed to trading with them and working with them, they'll rise to our standards. If we abandon these efforts, then what's gonna happen is they're gonna lower themselves down to China's standards. That will not be good for us.”

He said that opposition to the trade deal--which includes the four leading presidential candidates--comes from misunderstanding.

“Unfortunately because people have bad memories of past trade deals and off-shoring and manufacturing declining, and the impact it had on work and families, there's a tendency to be knee jerk against some of these trade agreements. And I think that's a mistake,” he said.

When asked about the “revolt against globalization,” the President said there is actually a lot of support for trade deals.              

“When you look at the polls the majority of people still think trade is smart for America. If you’ve got a fair set of rules, folks can't compete with us. We've got the best workers, the most innovative businesses. We'll do great in a free and fair trading regime. The problem is that some of the past trade deals I think weren't reciprocal. You had a situation where it was good for the other countries. Not so good for the United States. And people have memories of that,” he said.

The Trans Pacific Partnership deal is different, Obama said.  

“We're actually having countries that already are exporting a lot to us open up their markets, reduce their tariffs, which are essentially taxes on American goods. We're making sure that they're raising their labor standards in unprecedented ways. And their environmental standards in unprecedented ways” he said.