A few weeks ago, Congress took a huge step toward rebuilding the United States’ credibility on the world stage, with the passage of the Trade Promotion Authority (TPA) legislation, a process that puts Congress in charge of how the US negotiates trade agreements. Over the past several months, the TPA legislation has taken center stage as a critical business issue. However, it is very much misunderstood.
Under the U.S. Constitution, the President and Congress share power on international trade. TPA helps define this relationship in a way that creates a strong partnership between them. It also gives US negotiators guidelines to pursue and complete new, market-opening trade agreements, while enhancing Congressional input through development of negotiating priorities and oversight over the process.
International trade is an important engine for U.S. economic growth and jobs. More than 30 percent of US GDP is tied to international trade and investment and more than one in five U.S. jobs are supported by international trade. Ninety-five percent of the world’s consumers live in other countries. If we want to grow our economy, we can’t do it only by selling goods and services to ourselves. We need access to new customers. Therefore, U.S. engagement in the international marketplace is more important to our nation’s economy than ever before.
Why is the TPA important to business? International trade and investment supports jobs and economic growth in every state and now supports an estimated 39.8 million American jobs. US trade-related employment grew three and a half times faster than total U.S. employment between 2004 and 2013. US economic growth and job creation depend on expanded trade and investment opportunities so US companies and workers can sell more American products and services to foreign customers. Trade agreements are an important tool to help make this happen. For example:
?In 2011, more than 38 million U.S. jobs depended on US exports and imports. This represents 24 million more trade-related US jobs than two decades ago, before the U.S. implemented a series of bilateral, regional and multilateral trade agreements.
?US free trade agreements in effect in 2008 (before the global recession) generated over $300 billion in U.S. output (2.1 percent of US GDP), expanded U.S. exports of goods and services by over $460 billion, and supported over 5 million U.S. jobs.
?Nearly half of all U.S. goods exports now go to the nation’s Free Trade Agreement partners. In 2012, the US had a roughly $58 billion manufactured goods trade surplus with its 20 FTA partner countries combined.
Wisconsin is strong in manufacturing. Per capita, no state has more people employed in manufacturing than Wisconsin. Many local companies, like Oshkosh Corporation and Bemis, are significant contributors to this distinction. If we want to maintain and continue to grow a healthy manufacturing sector, our businesses need to be able to sell more products so they can grow and hire more people. To understand what strong new trade agreements could mean for Wisconsin, let’s consider the impact trade already has. International trade supports more than 785,000 jobs in Wisconsin, and in 2013 our state’s farmers and businesses exported more than $29.6 billion in goods and services. To top it off, 87 percent of those exporters were small- and medium-sized businesses.
U.S. Sen. Ron Johnson and Congressman Glenn Grothman recently demonstrated their leadership and continued support for Wisconsin workers and job creators by voting in favor of TPA legislation. We truly appreciate their leadership on this legislation. The passage of the TPA was important for the business community and the U.S. economy. It demonstrates to the world and our trading partners that we are serious about leading on international trade. Ultimately, it will pave the way to grow the economy and create good-paying jobs for our residents.
John Casper is the president and CEO of the Oshkosh Chamber of Commerce.