A Good Day in Congress for Export-Driven Jobs. Mr. President?

By January 25, 2011Trade

It was a busy and very positive day for a forward-looking trade policy in Congress, to be sure. Over in the House, Chairman Dave Camp (R-MI) called a hearing of the full Ways and Means Committee to examine the importance of passing the pending free trade agreements with Colombia, Korea and Panama, and their impact on job creation and economic growth. The National Association of Manufacturers was represented by Roy Paulson, president of safety equipment manufacturer Paulson Manufacturing, based in Temecula, Calif. Paulson exports to more than 80 countries, including the three with pending FTAs, and he was plain, direct and straightforward in telling the Committee that his exports to those nations will increase once their tariffs are removed with passage of the FTAs. (Prepared testimony.)

The same theme was echoed by all the witnesses at the hearing – themes well familiar to anyone who’s spent time reading this blog. The United States, with very low tariff rates, is open to the world. Many of the fastest-growing markets for our exports have high barriers. Trade agreements remove those barriers, drive U.S. exports and create jobs and economic growth here in America. If we chose to sit on the sidelines, as we have for the past four years, our competitors in Europe, Latin America and Asia will seize these markets with trade agreements of their own. Instead of preferential access for our manufactured goods exports, we will be confirmed as the suppliers of  higher priced goods. Market share will dwindle. Instead of increasing production at home for consumption abroad, we’ll be cutting production and losing markets. That’s a recipe for job losses and economic contraction.

As Cong. Peter Roskam (R-IL) noted at the close of the hearing (relying on notes): “The time to say we’re thinking about these agreements is over. The time to act on them and reap the benefits has arrived.” It is, in fact, well overdue, as anyone who exports to Colombia, Korea or Panama knows. We could have had these barriers down in 2007, well ahead of the competing FTAs our competitors are now rushing to complete. The President and Congress need to move quickly on all three agreements in the first half of 2011. The votes are there, as Trade Subcommittee Chairman Kevin Brady (R-TX) noted at the start of the hearing.

Leaving the House, we move to a bipartisan effort on trade in the Senate, where Rob Portman (R-OH) — who was President Bush’s Trade Representative — and Joe Lieberman (I-CT) introduced a bill today that would move all three agreements AND provide President Obama with Trade Promotion Authority (TPA). (Lieberman and Portman issued a joint news release.

The bill, titled “Creating American Jobs Through Exports Act of 2011” is a welcome development from two Senators who recognize the importance of expanding our access to foreign markets. Every President, regardless of their political views, needs to have Trade Promotion Authority. President Clinton used his authority to negotiate several key agreements. So did President Bush. President Obama recognizes the need for increased exports as a way to create manufacturing jobs and build a sustained economic recovery. The no-cost-to-the-taxpayer way to generate growth through exports is to sign more trade agreements. Having TPA makes the job of negotiating and completing agreements easier.

Tonight, President Obama will certainly touch on the need for more jobs and more growth. He can look at the bicameral, bipartisan developments that took place today as a good blueprint to follow.

Join the discussion 2 Comments

  • Hugh Campbell says:

    China’s Innovative Way of Skinning the United States!

    Mark Twain is credited with an early use of the cliché “more than one way to skin a cat” in A Connecticut Yankee in King Arthur’s Court, as follows: “she was wise, subtle, and knew more than one way to skin a cat, that is, more than one way to get what she wanted”. Thefreedictionary.com defines beggar-thy-neighbor as: an international trade policy of competitive devaluations and increased protective barriers that one country institutes to gain at the expense of its trading partners. Under the guise of fostering ‘indigenous innovation’, the Chinese government has creatively used a non-conventional, subtle version of beggar-thy-neighbor. Its version doesn’t entail the competitive devaluation of its own currency, which would enhance China’s exports and inhibits its trading partners’ exports. China’s version perpetrates an over-valuation of the currencies of one or more of its trading partners. This negatively affects all the trade of the pegged trading partner(s), not just trade with China. During the recent period China pegged its currency to the U.S. Dollar, its version of beggar-thy-neighbor was 8 times as damaging to the U.S. economy as what the media refers to as “China keeping it currency undervalued”.
    In November 2003, Warren Buffett in his Fortune, Squanderville versus Thriftville article recommended that America adopt a balanced trade model. The fact that advice advocating balance and sustainability, from a sage the caliber of Warren Buffett, could be virtually ignored for over seven years is unfathomable. Until action is taken on Buffett’s or a similar balanced trade model, America will continue to squander time, treasure and talent in pursuit of an illusionary recovery.

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