As trade is being widely discussed on the national political scene, making sure U.S. businesses—from light manufacturers to service providers—benefit from higher growth, employment and wages due to increased exporting is key to expanding the economy and creating opportunity for all Americans.
Once again this May, designated as World Trade Month, we have the opportunity, as the U.S. Department of Commerce says, “to acknowledge the importance of global trade, and look back at the economic advancements we have made as a result.”
Continuing in that vein, the Commerce Department recap notes:
“In 2015, our exports totaled $2.23 trillion, we increased our exports to 58 international markets, and we achieved record exports with 20 global partners.
“Our export success was one aspect of a strong year for the U.S. economy where our auto industry experienced its best year ever and our manufacturing sector reached record highs for output.
“Exports also contributed to our economy, supporting 11.5 million U.S. jobs and accounting for nearly 13% of U.S. GDP. In addition, last year, U.S. services exports tallied another strong year. In fact, business services; telecommunications, computer and information services; and travel all reached export increases of more than $1 billion.
“With more than 95% of the world’s customers living outside of our borders, trade and investment are a platform for our country to deliver our goods and services to global consumers. A robust export environment also attracts and encourages foreign companies to invest in the most innovative, productive workforce in the world: the United States of America.”
In 2015, California exports totaled $165.4 billion, according to the U.S. Department of Commerce. The 4.8% decrease from 2014 has been attributed in part to the strength of the U.S. dollar.
California maintained its perennial position as a top exporting state, exporting to 229 foreign markets. Exports from California accounted for 11% of total U.S. exports, with Mexico, Canada, China, Japan and Hong Kong being the state’s top trading partners.
Agreements like the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), multilateral agreements currently being negotiated, ensure that the United States may continue to gain access to world markets, which will result in an improved economy and additional employment of Americans.
Secretary of State John Kerry summed up the importance of these trade agreements in an April speech to the Pacific Council in Los Angeles:
“Ultimately, this whole debate—about TPP, TTIP, trade generally—comes down to a fundamental question: Will we bind our nation closer to partners and allies in the Asia Pacific and Europe, and strengthen our existing and emerging relationships in key markets and regions? Or will we pull back from our role as the indispensable global leader and leave others to fill the void, and delude ourselves into somehow believing that will make us safer?”
Through the TPP, the United States is seeking to help establish a trade and investment framework that supports job creation, promoting competitiveness, and expanding trade in the dynamic Asia-Pacific region. The United States also is seeking to advance core U.S. values in the agreement, such as transparency, labor rights, and environmental protection.
Current TPP members represent nearly 40% of global gross domestic product (GDP). If TPP is delayed by just one year, the United States will see an estimated one-time national loss of $94 billion, according to a report by the Peterson Institute for International Economics. That translates to a loss of $700 on average for every U.S. household.
The TTIP represents the largest, most integrated and longest-standing regional economic relationship in the world. Together, the European Union and the United States are responsible for more than 11% of the world’s population, nearly half of global GDP, a third of global merchandise trade, and 40% of world trade in services. A trade agreement could increase economic output for both the United States and the European Union.
For more than half a century, the United States has led the world in breaking down barriers to trade and in creating a fairer and freer international trading system based on market economics and the rule of law. Increased market access achieved through trade agreements has played a major role in our nation’s success as one of the world’s leading exporters.
The California Chamber of Commerce supports expansion of international trade and investment, fair and equitable market access for California products abroad, and elimination of disincentives that impede the international competitiveness of California business.
Our competitive success in the global economy forms the foundation for California and the nation to remain world leaders.
Susanne T. Stirling is vice president of international affairs at the California Chamber of Commerce.