Last week, the Senate and House held a successful mock vote on the free-trade agreements (FTAs) with Colombia, Panama and South Korea. While not legally binding, a mock vote is an important way to get our elected officials on the record, as opposed to hiding behind rhetoric and good intentions. Now we know where congressional members stand on putting Americans back to work.
This is good news. Those free-trade agreements, negotiated years ago, have been stalled due to partisan fighting, political bickering and deal-making. But the facts have only ever pointed in one direction - that their passage will open new markets to business, and pave the way for U.S. job creation.
With the unemployment rate stuck above 9 percent, Americans are blaming either or both political parties for their failure to create jobs. But the truth is that government only creates jobs in government, and what politicians can and must do is make sure that entrepreneurs and businesses have a healthy environment for job creation. So far, out-of-work Americans have seen precious little action from Washington to create the right job-creation environment.
I can already hear the objections from Big Labor: Free trade kills jobs. On the contrary, over the last 15 years, free trade has created more than 25 million jobs and increased real wages for U.S. workers. In fact, according to the Peterson Institute for International Economics, the cost of not passing the Colombian and South Korean agreements has been on the order of 300,000 jobs.
As president and CEO of an association representing more than 2,000 consumer technology companies, I know full well that agreements like these are vital to the continued expansion of the country’s high-tech industries. Free-trade agreements have allowed our members greater access to international markets, helping to grow their companies and, in turn, create thousands of American jobs. And it was free trade that was cited in the Declaration of Independence as important to our nation’s creation.
The simple truth is that while the United States dithers, the rest of the world is breaking down trade barriers. On July 1, a trade agreement between the European Union and Korea went into effect, immediately disadvantaging American companies. Likewise, Canada and Colombia are expected to soon implement their trade agreement and the EU is moving ahead on a deal with Colombia as well. In fact, Colombia and EU officials met in June to discuss their pending FTA agreement, which could be finalized by next year.
This is the price of inaction. U.S. companies lose out to foreign competitors in emerging and vital international markets. Especially for the innovation industry I represent, the United States needs more free-trade agreements to restore their ability to sell products overseas without encountering high tariffs. U.S. companies have paid more than $3.5 billion in duties to the Colombian government because of the stalled free-trade agreement.
Just as important, passing these free-trade agreements would send a message to struggling American businesses that Washington is finally getting serious about job creation. For an administration that has kowtowed to the Big Labor line on everything from collective-bargaining rights to silly “buy American” provisions that do nothing except damage our ability to compete worldwide, turning these FTAs into a reality would go a long way toward restoring investor confidence.
The time is now. The votes are there to finally pass the long-overdue free-trade agreements with Colombia, Panama and South Korea. For too long, Congress has allowed partisanship to get in the way of sound economic policy. With elections approaching, our national economy is in jeopardy as the parties oppose each other’s proposals. The trade deals are a glimmer of hope that politicians could put the needs of America ahead of their party opposition. Americans want a healthy economy and jobs and Congress must start unshackling our companies so they can start hiring Americans.
Gary Shapiro is the president and CEO of the Consumer Electronics Association and the author of “The Comeback: How Innovation Will Restore the American Dream” (Beaufort Books, 2011).