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HORAN: How free trade with Europe could ignite the economy
But complacency could undermine high hopes
U.S. Trade Representative Ron Kirk confirmed recently that he’s leaving Washington for the private sector. He deserves praise for the Obama administration’s major achievement on trade: final approval of free-trade agreements with Colombia, Panama and South Korea that had been negotiated by President Bush and his trade representatives but languished in Washington for years.
These three deals are already helping the U.S. economy by making it easier for Americans to sell goods and services abroad.
Complacency now becomes a danger. Exports have fueled America’s sluggish economy for several years, but they’ve slowed down in recent months. As Mr. Obama begins his second term, he must first find a new trade diplomat and then push for new agreements.
An excellent opportunity awaits across the Atlantic Ocean: The White House should actively pursue a U.S.-European Union free-trade agreement, which would benefit Americans directly and improve conditions around the globe.
Three years ago, Mr. Obama announced his National Export Initiative, promising that U.S. exports would double in five years. Initial signs suggested that he might make good on this pledge, as exports expanded by about 11 percent in 2010. Yet they’ve dropped ever since, to less than 7 percent in 2011 and, according to the latest figures, less than 4 percent in 2012.
At this rate, we’ll fall far short of the administration’s goal.
The president will blame the lousy world economy, and he’ll have a point. Yet there’s no reason to admit defeat — and in a poor climate, developing an aggressive trade agenda that helps Americans export goods and services becomes even more urgent.
Together, the United States and the EU are responsible for almost half of the world’s gross domestic product. We already trade a lot: trans-Atlantic trade is worth more than $900 billion annually. Still, we can do even better. The European Commission believes that an ambitious agreement could boost trade by 50 percent.
Generating that much economic activity would be like passing a stimulus program. Even better, it wouldn’t cost our debt-ridden government a penny. Simply by lowering tariffs on both continents, new trade would generate business, creating opportunities for entrepreneurs and jobs for workers.
The alternative is to do nothing — and doing nothing isn’t free. In fact, it could prove costly. Last year, U.S. exports to the EU actually declined by about 1 percent. Without positive action, we may see more stagnation rather than growth.
Agriculture often poses problems in large trade deals, and it would be no different with the EU. Yet a comprehensive agreement could do enormous good, not just for farmers in the United States, who would sell more of what they grow, but for people in the developing world.
One of the issues that will need to be covered is the acceptance of biotechnology as an acceptable tool of agriculture production. I believe a good trade agreement would require the EU to accept more food with genetically modified ingredients — a common phenomenon throughout the Western hemisphere but distrusted in Europe due to anti-scientific prejudice.
The good news is that most thinking Europeans know that biotechnology makes sense. European regulators have declared it safe. A growing number of scientists speak out on its behalf. A month ago, British environmental activist Mark Lynas announced his support for genetically modified crops.
Robust trade talks could provide the spark for Europe to lower its resistance. This would benefit people everywhere, in ways that the dollars and cents of trade figures fail to capture.
Modern food-production methods, including biotechnology, allow each U.S. farmer to feed 147 people. This amazing efficiency lets more nonfarmers devote their energy and creativity to other projects — everything from pioneering vaccines to inventing the next cellphone app — instead of spending their day growing food for their own family.
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