Trade Promotion Authority promotes job creation
As U.S. Chamber of Commerce President and CEO Thomas Donohue highlighted in his recent speech to the Grand Rapids Economic Club, Congress faces an important choice as it considers renewing the Trade Promotion Authority.
The TPA is vital because economic growth and job creation here in West Michigan depend on our ability to sell goods and services to the 95 percent of the world’s customers living outside the United States.
Nationally, one in four manufacturing jobs depends on exports, and one in three acres on American farms is planted for consumers overseas.
Here in Michigan, trade plays a big role in our economy. Michigan’s exports of goods and services topped $71 billion in 2013, which is why the Grand Rapids Area Chamber of Commerce strongly supports the New International Trade Crossing.
Trade is also especially important for small businesses in Michigan — more than 13,500 of which are exporters.
However, the international playing field is often unfairly tilted against our workers and companies. While the U.S. market is generally open, our exports face foreign tariffs that regularly soar into double digits, as well as a thicket of nontariff barriers.
Trade agreements are crafted to tear down these barriers. By creating a level playing field, they help U.S. companies and the workers they employ compete in overseas markets.
As Donohue noted, while our 20 trade agreement partners are home to just 6 percent of the world's population, they buy nearly half of all U.S. exports.
Further, if you’re worried about the trade deficit, trade agreements aren’t the problem — they’re the solution. In fact, the U.S. has a trade surplus with its 20 trade agreement partners.
The U.S. can seize more of these benefits by solidifying two major trade negotiations.
The first, the Trans-Pacific Partnership, involves 11 other Asia-Pacific countries from Japan to Australia. Within this region, 2 billion people joined the middle class in the past 20 years and another 1.2 billion will do so by 2020. The TPP will help U.S. companies tap these booming markets.
In the second big negotiation, the U.S. and the European Union are pursuing a Transatlantic Trade and Investment Partnership, the largest market for U.S. business. U.S.-EU trade reaches $1 trillion annually and employs 15 million Americans and Europeans. Even so, eliminating today’s relatively modest trade barriers would bring big benefits.
However, to make either of these growth-driving trade agreements a reality, Congress must renew the Trade Promotion Authority. Under the TPA, Congress sets negotiating objectives and requires the executive branch to consult extensively with legislators during negotiations.
Every president since Franklin D. Roosevelt has had the TPA; every president should have it.
The logic of trade is simple. Without the TPA, the U.S. cannot negotiate new trade agreements to open foreign markets, spur economic growth and create American jobs. Without it, our standard of living and our standing in the world will suffer.
For the sake of growth and jobs, we need the TPA renewed to seize the benefits of a robust international trade agenda.
Rick Baker is president and CEO of the Grand Rapids Area Chamber of Commerce.