North Dakotans Benefit from the Trading System Sen. Dorgan Attacks

Thomas J. Donohue, President and CEO
U.S. Chamber of Commerce

With his new book, "Take This Job and Ship it," North Dakota Senator Byron Dorgan joins a chorus of shrill attacks on America's engagement in the worldwide economy. He levels his charges while ignoring the benefits that most Americans and North Dakotans derive from open trading and investment relationships across the globe.

Over the last decade, North Dakota has established itself as a major exporter in industries ranging from manufacturing to agriculture, as well as an attractive destination for foreign investors. Consider these facts:

• Between 2001 and 2005 North Dakota increased its exports at twice the rate of the rest of the country.
• More than 900 North Dakota companies now sell products overseas. Eighty percent of these businesses are small and medium-sized enterprises.
• The state's $1.2 billion in annual export sales directly support 7,500 jobs for North Dakotans and thousands more indirectly.
• 7,900 workers in North Dakota work for foreign companies that have located in the state because of a good business climate and hard-working labor force.
• According the USDA, agriculture is twice as dependent on open overseas markets as other sectors. Anywhere from one-fifth (corn) to one-half (wheat) of North Dakota's row crops are produced for export.

Moreover, North Dakota is well-positioned to seize future opportunities in global commerce. Internet-based trading networks and logistics suppliers can now help businesses of all sizes and locations find and fulfill international orders. Foreign investors seeking favorable costs and quality workers will be looking increasingly to places like North Dakota because in the information and technology age, physical proximity to major population centers or seaports is not as important as it used to be.

Yet both the benefits and opportunities of global engagement could be lost if politicians like Senator Dorgan get their way with policies that close our markets, restrict the ability of companies to invest and source around the world, and invite trade retaliation.
Like other "anti-globalization" tracts, Senator Dorgan's book is filled with emotional anecdotes that illustrate the plight of workers who have lost jobs due to foreign competition. Indeed, we should never overlook the fact that some Americans have been hurt by global economic change. Government and business share a responsibility to offer them assistance and retraining.

Yet the overwhelming majority of Americans have benefited from open trade and investment. Nationwide, our exports directly support 12 million good paying jobs and indirectly support millions of additional jobs. Imports keep inflation low and expand consumer choice and quality. Foreign companies investing in the United States directly employ 5.1 million Americans and millions more indirectly.

We also hear once again the baseless and insulting charge that the American business community is selling out the country because corporations make investments and employ workers overseas.

Yet 70 percent of American business investment is domestic. Over half of U.S. foreign direct investment flows to the highly developed economies of Europe, Canada and Japan where it can hardly be argued that "cheap wages" were the motivating factor for such investment. Global sourcing also comes under sharp attack, despite the fact that we insource more than $50 billion more in service functions than we outsource.

No one can deny that even in an economy that is fundamentally strong, some aspects of middle-class life are under strain. Healthcare, pension and energy costs continue to rise. Many public schools are failing to equip our young people with the skills and tools they need to compete and excel in the worldwide economy. And, the same forces are challenging our businesses as these costs ripple through our economy.

But is it accurate to attribute these problems to trade and foreign investment? What is the basis for blaming open markets for rising medical bills, failing schools, or the fact that we have foolishly locked away our own vast domestic energy resources? These are homegrown problems that must be addressed with domestic solutions – not with the false promise of a new era of isolationism.

The global trading system is far from perfect. We must work harder to knock down unfair barriers to American goods and services, to level the playing field for our businesses, and to stop intellectual property and counterfeiting crimes which have robbed us of 750,000 American jobs.

Still, critics like Senator Dorgan should stop selling America short. We don't need the protectionism they are selling and we shouldn't surrender to the fear they are peddling. With the right training and tools, our workers, entrepreneurs and farmers can succeed and prosper in a competitive worldwide economy.

Originally published in the Fargo Forum, August 31, 2006