Feb 23, 2015 - 12:45pm

Trade is America’s Next Great Success Story


Senior Editor, Digital Content

bloomberg_containers_port_oakland_800px.jpg

Containers stacked at the Port of Oakland in Oakland.
Containers stacked at the Port of Oakland in Oakland. Photo credit: David Paul Morris/Bloomberg.

Trade proponents must “smash the misconceptions surrounding” trade, U.S. Chamber President and CEO Tom Donohue told a Grand Rapids, MI audience.

With an aggressive trade agenda on the table that includes the Trans-Pacific Partnership (TPP), the Trans-Atlantic Trade and Investment Partnership (TTIP), and renewing Trade Promotion Authority (TPA), educating the public and lawmakers about trade's benefits is paramount.

"Trade plays to America’s strengths—our innovation, our competitiveness, our people," said Donohue.

Here are nine excerpts from Donohue’s speech.

1. Trade Has Been an Economic “Bright Spot”

Exports have been one of the rare bright spots in the American economy. They have risen by more than 50% over the past five years.

More than 38 million American jobs depend on trade.

And yet we are only scratching the surface. More than 95% of the people we want to sell things to live outside our borders.

We have negotiated 14 market-opening agreements covering only 20 countries. Opportunities abound.

If we don’t seize these opportunities, our competitors surely will. In fact, they already are.

According to the World Trade Organization, there are 398 trade agreements in force around the globe today. The United States is party to only 3% them.

2. The Bipartisan Pro-Trade Consensus Has Frayed

More members from the extreme ends of both political parties are being elected to Congress, and they tend to oppose trade.

Our opponents have stepped up their game and raised their voices in the public debate.

We can no longer take for granted widespread support for trade among the public and lawmakers. We have to fight to win their support.

The good news is they are willing to listen. They can be convinced. We just have to make the case.

3. Ensuring Fairness, Accountability, and a Level Playing Field

Our trade agreements must ensure accountability, fairness, and a level playing field for American workers.

Trade agreements achieve exactly what trade opponents say they want—to level the playing field for American workers and businesses by cutting tariffs and other barriers to U.S. exports.

If we don’t negotiate agreements, then we lock in the status quo. We lock in our competitive disadvantage.

Trade agreements being negotiated today do a better job of ensuring openness, accountability, and a level playing field for all.

4. Trade Agreements are a Success Story

While our 20 trade agreement partners represent just 6% of the world’s population, they buy nearly half of our total exports. We even have a trade surplus with these countries.

American workers are among the biggest winners. Commerce with our trade agreement partners supports more than 17 million American jobs.

Small and medium-size companies account for 98% of all U.S. exporters. 40% of their merchandise exports go to our trade agreement partners. That spells success for America’s small businesses.

Exports of U.S. farm and food products to our trade agreement partners increased by more than 130% between 2003 and 2013, according to the U.S. Department of Agriculture.

American manufacturers sold $658 billion in products to our 20 trade agreement partner countries in 2013.

5. Trade Critics are Wrong. Neither Trade Agreements Nor Imports Cost Jobs

The Bureau of Labor Statistics disagrees. In fact, there was a net increase of 800,000 jobs in U.S. manufacturing alone during the first four years of NAFTA.

Where have the lost manufacturing jobs gone? Not to Mexico—or China. A RAND study found that China shed 25 million manufacturing jobs between 1994 and 2004, 10 times more than the United States lost in the same period.

Most of these jobs have been lost to a country called “productivity.”

Technological change, automation, and widespread use of information technologies have enabled firms to boost output even as some have cut payrolls.

Imports bring lower prices and more choices to families striving to make ends meet, as well as exciting new technologies that make our lives better.

Access to imports boosts the purchasing power of the average American household by about $10,000 annually.

Imports of intermediate goods and raw materials help lower costs for manufacturers and other businesses, which can pass on savings to customers.

6. Must Help Displaced Workers

Critics often lay the blame on trade. They’re wrong.

Regardless of where the blame lies, we have a responsibility to do more to help displaced workers.

But the answer to a worker losing his job at a typewriter factory is not to force the factory to keep making typewriters.

It’s to make sure that worker can move from a 20th century job to a 21st century job without turning his or her life upside down.

Business is already making a major contribution by investing in training and development across the U.S. workforce.

The American Society for Training & Development estimates that U.S. businesses spent $164 billion on employee learning and development in 2012, or about $1,200 per worker.

7. An Aggressive Trade Agenda

We should start by bringing several trade negotiations to a successful conclusion.

The Trans-Pacific Partnership agreement would open the Asia-Pacific’s dynamic markets to American goods and services.

There’s also an agreement being negotiated called the Transatlantic Trade and Investment Partnership, which would further remove barriers between the United States and Europe.

The agreement could not come at a better time—both America and Europe are dealing with struggling economies, aging populations, and new competition from emerging nations.

TTIP would be a welcome economic boost to both sides of the pond.

According to a study by the Atlantic Council and the British Embassy, the agreement would create 740,000 new U.S. jobs.

The Trade in Services Agreement is another big opportunity—a free trade zone for services with 50 countries around the globe.

Eliminating barriers to trade in services could create as many as 3 million American jobs.

8. TPA Strengthens Congress’ Voice on Trade

But we can’t secure new trade agreements without Trade Promotion Authority. TPA is indispensable—the United States has never passed a major trade pact without it.

It’s especially important to strengthen the voice of Congress on trade.

TPA allows Congress to set negotiating objectives, and it requires the executive branch to consult closely with Congress during trade talks.

Finally, TPA reserves for Congress the final say on any new trade agreement in the form of an up-or-down vote.

TPA also strengthens the hand of U.S. negotiators.

When the United States sits down at the negotiating table, every country at that table has to be able to trust us.

Countries need to know that the deal the administration wants is the deal Congress wants. If they don’t, why go through the motions? Congress could sink any negotiated deal at the last minute.

9. Congress Should Reauthorize the Export-Import Bank

The Ex-Im Bank is a small federal agency that enables U.S. companies to sell their products in global markets.

90% of its loans go to small businesses.

The Bank even turns a profit for the American taxpayer. Since 1990, Ex-Im has returned a net $7 billion to the Treasury.

Defaults are rare and loans are backed by the borrower’s collateral, meaning no taxpayer bailouts.

Ex-Im also helps level the playing field for American companies. Failure to reauthorize Ex-Im over the long term would amount to unilateral disarmament in the face of other nations’ aggressive trade finance programs.


Find the full speech here:

About the Author

About the Author

Sean Hackbarth
Senior Editor, Digital Content

Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.