President Obama has requested Congress to renew his Trade Promotion Authority (TPA). Congress should grant the request. TPA not only represents the most constructive area for bipartisan cooperation this year, but it is vital because economic growth and job creation at home depend on our ability sell American goods and services to the 95 percent of the world’s customers living outside the U.S.
Many Americans are already seizing these opportunities. Nationally, one in four manufacturing jobs depends on exports, and one in three acres on American farms is planted for consumers overseas.
Here in Arizona, trade plays a big role in our economy. Trade supports nearly 750,000 jobs in the state, and Arizona’s exports of merchandise reached over $19 billion in 2013.
Trade is especially important for our state’s small businesses, more than 6,000 of which are exporters. Arizona’s top export markets are Mexico – to which we exported over $8 billion worth of goods in 2014 – Canada, China, and Japan.
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 often soar into double digits as well as a thicket of nontariff barriers, making our goods more expensive and less competitive in foreign markets.
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.
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. The U.S. has a trade surplus – meaning we sell more than we buy – with its 20 trade agreement partners.
But other countries are running up the free trade score. Mexico, for example, has more than twice as many free trade agreements in place than the U.S., attracting carmakers from all over the globe. As a Volkswagen executive told Forbes about Mexico, “I can export duty free to North America, South America, Europe and Japan. There’s not another country in the world where you can do that.”
How can the U.S. seize more of these benefits? The good news is that the U.S. is taking part in two major trade negotiations. The first, the Trans-Pacific Partnership (TPP), involves 11 other Asia-Pacific countries from Japan to Australia.
The appeal of the TPP is simple. Two billion Asians 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. Think of TPP as the next natural step following the now 20-year-old North American Free Trade Agreement. Both Canada and Mexico are included in the TPP negotiations.
In the second big negotiation, the U.S. and the European Union are pursuing a Transatlantic Trade and Investment Partnership (TTIP), 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.
Arizona is well positioned to take advantage of these trade deals, building on its reputation of being home to leaders in the international trade field like former Rep. Jim Kolbe, a major player in ushering NAFTA to passage, and Rep. Matt Salmon, who has done a ton of work on permanent normal trade relations with China and who now chairs the Asia-Pacific Subcommittee of the House Foreign Relations Committee.
However, to make either of these growth-driving trade agreements a reality, Congress must first approve Trade Promotion Authority (TPA). Under 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 TPA; every president should have it.
The logic of trade is simple. Without 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.
TPA is an issue where there is opportunity for true bipartisan agreement, and where Congress and the White House can come together. For the sake of growth and jobs, Congress should renew TPA and seize the benefits of a robust international trade agenda.
Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry.
The Arizona Chamber of Commerce and Industry is committed to advancing Arizona’s competitive position in the global economy by advocating free-market policies that stimulate economic growth and prosperity for all Arizonans. http://www.azchamber.com/.