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Trans-Pacific Partnership 'absolutely critical' for US, Caterpillar

Not ratifying the Trans-Pacific Partnership is a "huge danger" for the U.S. and Caterpillar Inc., said Chairman and CEO of Caterpillar Doug Oberhelman, speaking on the sidelines of the MINExpo conference in Las Vegas, Nevada, Sept. 26.

The deal has U.S. President Barack Obama's backing and has become a lightning rod issue in the unfolding U.S. presidential election.

Both presidential candidates Hillary Clinton and Donald Trump have signaled opposition to the deal — reiterated in a TV debate Sept. 26 — which was signed by the U.S, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru earlier this year.

It must still be ratified by the U.S., among other countries, however.

"Specifically, the TPP is absolutely critical for this company and this country in my opinion," Oberhelman said. "And it's really two things. It's about dropping a lot of trade barriers that we see every day."

"And if we don't write the rules... In Asia, somebody else will," he added.

Oberhelman said he would "rather be in front of that than to have somebody write the rules" and companies "export from the U.S. and have to pay some kind of a tariff because we're excluded from the agreement that all the others have signed without us."

"And I think that's a huge danger to this country and certainly it's worrisome to this company as well because we've been able to sell around the world," he continued.

Oberhelman made the comments after a press conference at MINExpo, where Asia trade factored large. He underlined China, which is not part of the TPP, as an important factor in a recent pick-up in sales.

"Chinese New Year...sets the tone for the year," he said. "And we had not seen recovery in the past, prior to this year [for] three Chinese New Years... And this year we saw it."

In that, he pointed to strong excavator sales in China.

Oberhelman acknowledged the activity might be ephemeral, pointing to government spending aimed at boosting GDP growth. "And certainly some of that is government stimulus as they try to maintain that [6.5%] to [7%] growth rate, which you can argue with," he said. "But we think right now they're probably able to do that. We're seeing that in our numbers in China."

More generally, Oberhelman argued that population growth put the mining industry in a decent mid- to long-term position.

"Is there anyone in the room, or anyone anywhere, that believes we won't need more ores and minerals that bring us lights; that bring us all the things we use in life," he said. "So long-term, it's a fabulous opportunity for us."