The Case for International Engagement

America cannot have a growing economy or lift the wages and incomes of our citizens unless we continue to reach beyond our borders and sell products, produce, and services to the 95% of the world's population that lives outside the United States.

Trade sustains millions of American jobs. Approximately 57 million American workers are employed by firms that engage in international trade, according to the U.S. Department of the Treasury. That's about 40% of the private sector workforce.

One in five factory jobs depends on exports, and one in three acres on American farms is planted for hungry consumers overseas. We don't always notice the fact that millions of jobs depend on exports, but we certainly would if those jobs disappeared.

In 2007, our exports to the world totaled $1.6 trillion, a 69% increase in 10 years. In the first half of 2008, exports have continued to expand with double-digit growth. About 60% of all exports are from our highly productive and efficient manufacturing sector. The United States exports about $200 billion in high-technology products and $500 billion in services. In 2008, U.S. agricultural exports are expected to top $100 billion for the first time in history.

Recently, trade has been a bulwark for the U.S. economy as it has slowed and headed into recession. Over the year prior to the recent financial crisis, exports were generating nearly all U.S. economic growth.

The importance of trade is perhaps clearest among America's small businesses, which represent 97% of all U.S. exporters. These small and mid-sized firms generate nearly a third of all U.S. merchandise exports. While large companies still account for a majority of American exports, smaller companies nonetheless play a critical supporting role in trade.

In fact, the future for entrepreneurs in the trading arena is phenomenal. With advances in high-speed Internet technology and logistics services, small businesses now have extraordinary opportunities to reach foreign customers. The appetite for U.S. products and services stretches around the globe.

Due in large part to the success of the North American Free Trade Agreement (NAFTA), Canada and Mexico are our number one and number two export markets, buying more than a billion dollars in U.S. goods and services every day. They are followed by China, Japan, the United Kingdom, Germany, the Netherlands, South Korea, Singapore, and France.

States that are home to the nation's key seaports-including California, Texas, Florida, New York, and New Jersey-support millions of workers through transportation, logistics, and other services related to the processing of international commerce.

Even states that have been buffeted by economic difficulties can point to major compensating benefits through their involvement in trade. For instance, Michigan's approximately 600,000 manufacturing workers are direct beneficiaries of NAFTA. Canada and Mexico purchased $31 billion in Michigan exports in 2007, 70% of the state's total.

Do the math for the United States as a whole, and NAFTA's benefits are clear. About 14 million Americans are employed in manufacturing. These workers produced $870 billion worth of exports in 2007. Canadians and Mexicans purchased $330 billion of U.S. manufactured goods in 2007.

In short, the NAFTA market brings export revenue of $24,000 for each and every American factory worker. Compare this to the salary of the average U.S. manufacturing worker-about $37,000. Manufacturers simply couldn't make their payroll without their booming sales to the markets right next door.

All these benefits underscore the value in knocking down unfair trade barriers in other countries through free trade agreements, vigorous enforcement of trade rules, and opening foreign markets through international accords negotiated under the World Trade Organization (WTO).

Imports help Americans too. Open markets, rapid economic growth, and a massive consumer economy help explain why imports have grown from $870 billion in 1997 to more than $1.95 trillion in 2007, a 125% increase.

Looking at the broad array of U.S. imports, the influx of affordable consumer goods, textile products, and cars has hurt some workers and communities. Those affected should be given the assistance and training they need to succeed in new careers. Yet, overall, our nation's appetite for imports has improved the performance of our economy and has greatly benefited American families by boosting choice, quality, and purchasing power.

For example, NAFTA and the Uruguay Round, which lowered barriers and tariffs regionally and around the globe, produced $1,300 to $2,000 in increased buying power for the typical family each year (i.e., through lower prices). Further reducing global tariffs by one-third would mean an additional $2,500 a year in savings for the typical American family of four.

Imports also directly support millions of American workers in shipping, port operations, logistics, transportation, wholesaling, and retailing and marketing.

Our energy needs alone make a compelling case for the nation's continued engagement around the world and our support for a smoothly functioning international trade marketplace. About two-thirds of all the crude oil America needs to run its cars, businesses, and homes is imported, as is much of the uranium needed to run and expand our nuclear power plants.

The interdependence of the world economy is plain to see in international markets for energy, food, and many other products. This interdependence has brought substantial benefits for Americans, and the best way to ensure these benefits continue is by keeping international trade and investment open and secure.

Americans must understand that our country receives tremendous benefits from international trade. Those who propose punitive tariffs and other measures-even when seeking to protect a domestic industry or punish a trading partner for not playing by the rules-are, in effect, proposing a tax increase on Americans.

And they are overlooking the potential for trade retaliation abroad-retaliation that could cost millions of their fellow Americans their livelihoods and jobs.

In the end, we cannot turn our back on world trade. It is an inevitable part of the world in the 21st century. To secure the benefits of trade, our elected leaders must prioritize initiatives to open foreign markets and sell more of our products overseas. Taking such steps will help grow jobs here at home.

American workers, companies, and farms are the most productive in the world. We must continue to expand our access to export markets-and that means keeping our own markets open and staying engaged in the global trading system.