Trade

As the Ranking Member on the Ways & Means Subcommittee Trade, I have seen firsthand how important fair trade is to our economy.  As the number one manufacturing nation in the world, it is essential that we have as many open markets for our goods as possible.  Contrary to much-repeated myths, trade greatly benefits U.S. workers, consumers, manufacturers, and small businesses.  Fair trade levels the playing field for American small businesses, removing unfair barriers around the world that block U.S. goods and services from entering important markets, and in turn, helps grow our economy and create more jobs for American workers. 

In the last decade, U.S. trade has helped raise GDP by nearly 40 percent and has helped add 16 million jobs.  With 96 percent of the world’s consumers living outside the U.S., it is imperative to job creation and continual economic growth that U.S. producers be able to reach those consumers and expand exports. 

Overall, the benefits that trade brings to the economy as a whole are overwhelmingly positive.  Domestic manufactures that use lower-cost imported raw materials, capital goods and industrial products (which account for half of all U.S. merchandise imports) to produce products in the U.S. gain a competitive boost that promotes investment, productivity, and growth in these industries.  Lower prices for imported goods also help households to stretch their incomes, enabling them to buy more of everything, including goods and services that are produced domestically.  The benefits of trade are estimated to amount to as much as $10,000 annually for a family of four.  Additionally, trade also supports millions of jobs in the U.S. Today, more than 57 million Americans are employed by firms that engage in international trade - that means roughly 40 percent of all non-farm jobs are dependent on international trade.

In 1962, President Kennedy powerfully articulated the far-reaching benefits of trade.  He urged the United States to lead the free world in embracing open markets, declaring, “Economic isolation and political leadership are wholly incompatible.”  If America takes a “timeout” from trade as some leading Democrats have proposed, other nations will move ahead, to the disadvantage of our families – who will not have access to affordable goods – and our workers - who will lose out to international competitors who are able to sell their goods to overseas customers more cheaply. 

  Recent evidence of fair trade benefitting Americans is readily apparent when looking at the remarkable success of the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA).  Within two years of the implementation of CAFTA, we turned a $1.9 billion trade deficit with these countries into a $3.7 billion trade surplus. 

The United States’ other regional and bilateral Free Trade Agreements have also been a tremendous success for the U.S. economy.  As of June 2008, the United States went from a trade deficit to a $6.6 billion dollar trade surplus in manufactured goods trade with our Free Trade Agreement partner countries.  These agreements clearly benefit America.  Turning our backs on these benefits, as the Democratic Majority threatens to do, is irresponsible and only hurts the long-term growth of our economy.

We also must expand our presence on the global stage.  America is at its strongest when taking on a challenge head-on.  The bipartisan support for trade that has existed since World War II has helped make America into the economic power it is today.  Members on both sides of the aisle must recognize what Presidents Kennedy, Reagan, and Clinton knew – open markets are critical to the U.S. economy.  The following plan of action builds upon that philosophy and will significantly increase our economic strength in both the short and long term. 

• The U.S. must continue negotiating at the World Trade Organization (WTO) to reach an international trading regime that levels the playing field for American farmers, ranchers and businesses.  While the United States is the largest manufacturer and the largest trading nation in the world, proving our ability to effectively compete and succeed in the global economy, our nation still faces a wide array of trade and investment barriers.  It is estimated that a WTO agreement that would reduce all global tariffs to essentially zero would increase the purchasing power of every American family by approximately $9,000.

• Short of a WTO agreement, we must continue aggressively working toward Bilateral and/or Regional Free Trade Agreements.  To stay competitive, the U.S. needs to continue to pursue global, regional and bilateral trade agreements that remove tariff and non-tariff barriers to U.S. goods and services, protect intellectual property rights, and reduce trade distorting subsidies.  Congress must pass the pending Colombia, Panama, and South Korea fair trade agreements, which present tremendous opportunities to open up new export markets and lower foreign barriers on U.S. goods and services produced by American workers. 

• Extend authority to negotiate trade agreements and uphold protections regarding such deals.  Trade negotiating authority must be restored in order for the U.S. to pursue new trade and investment agreements, opening major markets around the world for U.S. farmers, manufactures, and service providers.  Trade Promotion Authority (TPA) protections ensure that an agreement will receive an up or down vote without amendment in both the House and Senate.  Unfortunately, Speaker Pelosi has stripped the Colombia agreements of such protection in the House.  Previous Democratic Presidents have supported such protections, and to ignore those terms facilitates the image of an unreliable America on the global stage. 

• Increase protections for American intellectual property.  We need to take steps to limit the overseas piracy of American products.  Trade agreements also make foreign countries our partners in halting theft of American intellectual property, which further levels the playing field for American workers and business.