Earlier this year, President Obama set an ambitious goal of doubling the nation’s exports in five years as a way of creating 2 million American jobs. To get there, he called for passage of three pending free trade agreements with Panama, Colombia and South Korea, which have been stalled since the Bush years.
Our nation’s leader is absolutely right. As head of an association representing some 2,000 consumer technology companies, I know full well that agreements like these are vital to the growth of this nation’s high-tech industries. These free trade agreements eliminate tariffs on American made exports and thus allow American companies to compete. Trade agreements grow our exports and create thousands of American jobs.
In total, U.S. companies exported $1.6 trillion in goods and services in 2007, helping support 16 million jobs, according to the Small Business Administration. That number peaked in 2008 at $1.8 trillion, before falling to $1.5 trillion last year. That loss represents tens of thousands of American jobs. The best way to get them back is to open international markets.
The cost of inaction couldn’t be clearer. The U.S. Chamber of Commerce estimates that passage of the Colombian and South Korean trade agreements could contribute as much as $44.8 billion in national output and add 383,000 jobs.
In 2009, failure to pass the Panama trade pact could have been an important factor in Panama’s decision to award a $3 billion contract to a European consortium over an American company to build new locks for the Panama Canal, according to James Roberts of the Heritage Foundation. The canal expansion project is the largest construction project in the Americas and American companies are shut out without the passage of the Panama free trade agreement.
The simple truth is that while the United States dithers, the rest of the world is breaking down trade barriers. Last October, the EU signed a trade deal with South Korea, and is moving ahead on a deal with Colombia. At the same time, the Colombian trade minister met with Canadian officials last week to help cement a trade agreement with our competitors to the north.
The United States is losing its competitive edge in the global marketplace as long as it follows the union script and shifts to protectionism. Most union objections to these trade agreements are either weak or outdated. For example, in Colombia, where unions argue that the government doesn’t do enough to protect workers, violence against union members has fallen every year during President Alvaro Uribe’s eight-year term. The Uribe government has also been aggressive in prosecuting the perpetrators, having indicted 234 individuals for crimes against labor since Mr. Uribe entered office in 2002, compared to just two in the previous 10 years.
Moreover, Mr. Uribe, who wants to conclude the trade agreement with the United States before leaving office this year, is a valued ally in an increasingly despotic region of the world. We don’t know who will replace Mr. Uribe, but forming economic ties with Colombia now would go a long way toward dissuading Colombians of Chavez-style thuggery in the future. Every day that we fail to pass these agreements is a good day for Cuba’s Castro brothers and Venezuela’s Hugo Chavez.
American unions oppose passage of these agreements without any pretense that their passage will hurt American workers. When pressed recently, House Ways and Means Chairman Sandy Levin said he opposes the Colombia agreement because the disparity between Colombia’s rich and poor is too great. Ironically, by eliminating tariffs on U.S. exports, the free trade agreement would lower prices for all Colombians who wish to buy American products.
The bottom line is that fostering trade relations will not only benefit these emerging nations, but also assist the president’s ambitious and noble goal of bolstering exports and creating American jobs. In Panama, the pursuit of an aggressive free-trade policy for the last decade has resulted in an 8.1 percent decline in poverty among the nation’s citizens. It’s no wonder these nations, in the absence of American commitment, are doing business with our competitors like Canada and the EU: They can’t afford not to.
Likewise, the United States can little afford to gamble away the future of its innovators, entrepreneurs and businesses. It’s time for Congress to set aside its political objections and get to the business of growing the American economy. As U.S. Trade Representative Ron Kirk told a gathering at the Consumer Electronics Association earlier this month: “In these economic times, we can’t afford to leave any jobs on the table.”
Gary Shapiro is president and CEO of the Consumer Electronics Association, which represents more than 2,000 U.S. technology companies.