By: Stephen Waguespack
A coalition of 48 U.S. Senate Republicans and 14 Democrats made an important step toward moving our nation’s trade agenda forward last week when they voted for the Bipartisan Congressional Trade Priorities and Accountability Act of 2015, also known as Trade Promotion Authority (TPA), sending the legislation to the U.S. House of Representatives.
TPA is vital because economic growth and job creation at home depend on our ability to 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: One in four manufacturing jobs depends on exports, and one in three acres on American farms is planted for consumers overseas. Nearly 40 million American jobs depend on trade.
Here in Louisiana, trade plays a big role in our economy. In fact, export growth in Louisiana has averaged 19.3 percent since 2002 – nearly three times the state’s average GDP growth, and our exports of goods and services last year reached nearly $58 billion.
Aside from exporting billions in goods, trade is vital for our state's job market as well. Some 522,000 Louisiana jobs – more than one in five state workers – are dependent on trade. Moreover, trade-related employment grew almost three times as fast as the state's total employment between 2004 and 2011. Trade-related jobs also pay well – jobs in domestic exporting plants pay up to 18 percent more on average than similar jobs unrelated to exports. Trade is especially important for Louisiana’s small businesses, over 3,200 of which are exporters.
Trade agreements also lower the cost of imported goods – many of which are raw materials necessary for our state's manufacturing sector. Apart from creating jobs by lowering costs for our manufacturers, this makes basic goods more affordable for U.S. consumers. In fact, trade promotion policies save the average Louisiana family $10,000 a year.
However, the international playing field is often unfairly tilted against American workers and companies. While our market is generally open, U.S. exports face foreign tariffs that often soar into double digits as well as a thicket of non-tariff barriers.
Trade agreements are negotiated 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.
The record of America’s trade agreements is strong. While our 20 trade agreement partners represent just 6 percent of the world’s population, they buy nearly half of U.S. exports. The expansion in trade fueled by these trade agreements supports more than 5 million American jobs.
To expand these benefits, the U.S. is negotiating the Trans-Pacific Partnership agreement with 11 other Asia-Pacific nations, including some of the world’s fastest growing economies. The U.S. is also negotiating the Transatlantic Trade and Investment Partnership with the European Union, the largest market for U.S. business.
However, to make either of these growth-driving trade agreements a reality, Congress must first approve Trade Promotion Authority (TPA).
Passage of the bill allows the administration to conclude negotiations with 11 other Asian and Pacific nations and bring the trade deal to Congress for an up or down vote. A simple form of TPA was first enacted in 1934, but the latest version lapsed in 2007.
Without TPA, it is difficult for the U.S. to negotiate new trade agreements that open foreign markets, spur economic growth and create American jobs. LABI applauds the Senate passage of the bipartisan TPA legislation, and urges the House to approve this important legislation as soon as possible so Louisiana can continue on its current path toward economic growth.