Everyone agrees small and medium-sized businesses are the backbone of our economy, powering job creation. That’s why I am shocked at the fear-mongering and outright falsities being spread about trade agreements and trade promotion authority. I’ve heard directly from employers like Commercial Vehicle Group in New Albany and Screen Machine in Licking County that the ability to sell their goods and services to a growing customer base is the way they can best grow their businesses. These employers know that new customers mean more business which leads to more jobs and increased growth. Trade has been a scapegoat for globalization for too long. It’s time to separate fact from fiction about how trade impacts Ohio and what trade promotion authority, or TPA, is.
Political advertisements depicting boarded up factories with rhetoric of lost jobs blaming the implementation of the North American Free Trade Agreement (NAFTA) pull at heart strings. But looking at the hard numbers we can see that placing blame solely on trade agreements for job losses rings hollow. While critics say NAFTA caused American job losses, the opposite is true. In the four years after NAFTA was enacted, manufacturing jobs in the United States actually grew by 800,000 according to the Bureau of Labor Statistics. Manufacturing jobs have been declining in the United States and across the world since the 1950s, well before NAFTA was signed. Rather than send jobs overseas, NAFTA helps keep manufacturing jobs here at home. Contrary to what you may hear we’re not just importing cheaper items from Mexico because of NAFTA; excluding energy we actually have a trade surplus with our NAFTA partners in goods and services. The facts remain clear — according to the U.S. Chamber of Commerce, 14 million American jobs depend on trade with Canada and Mexico, and five million of those jobs have resulted from NAFTA trade increases. Mexico has trade agreements with 45 nations while Canada has them with 14 and is currently negotiating an agreement with the European Union. Without NAFTA, U.S. products would face higher tariffs in Canada and Mexico putting them at a disadvantage when competing with products from other nations. Additionally because of the free trade agreements that Mexico has in place, companies often see Mexico as a more favorable place than the United States to locate factories to manufacture goods because the products would face lower duties around the world because of their agreements. When the U.S. doesn’t pursue trade agreements, we fall behind.
In Ohio we can’t fall behind. Our economy depends on trade. Trade supports 1.5 million Ohio jobs – that’s one in every five workers. Trade is what is driving job creation in the Buckeye State. Between 2004 and 2013, Ohio’s overall employment declined, but trade-related jobs grew by 19 percent. More than 200 countries buy Ohio-made products amounting to $50.6 billion in Ohio goods. Of Ohio’s more than 16,000 exporters, 89 percent of them are small and medium-sized businesses, like GFS Chemicals in Powell that ships to customers in Australia, Asia, Europe and Canada. Those small and medium-sized businesses drive our economy. Trade agreements knock down barriers and fuel rapid export growth in our state. Over the past 10 years, Ohio exports have increased by 37 percent with the most growth in goods going to Mexico, Canada and Korea, our largest trade partners and all countries we have trade agreements with. The evidence is clear, the more customers Ohio exporters have access to, the more products they sell and the more their businesses grow. When businesses grow, they hire more workers and pump more money into the area economy. With more than 95 percent of the world’s customers living outside the United States, gaining access to those customers is key.
Two agreements currently being negotiated, one with Asian Pacific nations and one with European nations, would give the United States access to one billion new customers. To unlock the job creating potential of these trade agreements, Congress must first pass TPA. There is a lot of misunderstanding about what TPA does and doesn’t do. Critics claim TPA would give the president new authority to negotiate trade agreements behind closed doors. This is not true. In fact, TPA prevents the President from being able to do exactly that. Under the U.S. Constitution, the President can negotiate any trade deal he wants. He can do it in secret. He doesn’t have to keep Congress or the American people informed. TPA prevents that. TPA includes strict consultation and transparency requirements. TPA outlines Congress’s priorities for trade agreements and provides the ability for Congress to “turn off” TPA if members feel the requirements aren’t being met. TPA mandates strict, robust transparency requirements so members are fully informed and able to provide their input. In addition, any trade agreement would have to be made available to the public for 60 days before it can be signed. Finally, TPA creates a new chief transparency officer in the office of the U.S. Trade Representative that will be required to consult with Congress and advise members on transparency issues. If the administration follows Congress’s objectives and the transparency requirements of TPA, Congress agrees to give a trade agreement an up or down vote. In response to critics that say TPA gives the president power, I’d say the opposite is true. TPA puts Congress in the driver’s seat and gives Congress the ultimate decision about a trade agreement. Again, if Congress doesn’t think the requirements are being met, Congress can “turn off” TPA and any member still has the ability to vote no on a trade agreement.
I have heard some claims that trade agreements will undermine U.S. sovereignty and weaken our position in the world. Again, I believe the opposite is true. TPA reaffirms that trade agreements cannot change U.S. law or prevent U.S. law from changing in the future without Congressional action. If there is a conflict, a provision in TPA reiterates that U.S. law would prevail. Rather than weaken our position in the world, trade agreements help bolster it. Earlier this year, along with Ways and Means Chairman Paul Ryan and other members of the committee, I visited Asian-Pacific nations to talk about the pending trade agreement. One of the things we heard over and over again was that these trade negotiations weren’t just about the benefits of trade, they also have foreign policy implications. For example, Asian-Pacific leaders were clear that the U.S. has to be engaged and that if we don’t write the rules for trade, others will. If we disengage or stall and let others take the lead in these negotiations, countries like China will fill the vacuum and their trade agreements have lower standards and fewer protections. Asian-Pacific countries want us to engage, so there will be a counter balance to China. Other nations are pursuing trade agreements making it easier to buy and sell goods around the world, and when we don’t do the same, we fall behind. Again, the evidence is clear. In 2000, America received 37 percent of the world’s foreign direct investment. In 2013, we received only 19 percent. The rest of the world is moving forward with global trade and we need trade agreements to remain globally competitive.
The best way to pass agreements with the Asia-Pacific region and the European Union is to pass trade promotion authority to ensure an open and transparent process and that Congress’s priorities are included. We have been haunted by lies about the effects of trade for too long. It’s not often that people as politically different as President Barack Obama, Senator Ted Cruz, and I agree about what can help the country move forward, but the benefits of trade agreements leave little doubt. Trade increases American jobs, trade grows the American economy, and trade helps secure our place as a world leader.
U.S. Congressman Pat Tiberi represents the 12th Congressional District of Ohio. It is composed of Delaware, Licking and Morrow counties and parts of Franklin, Marion, Muskingum and Richland counties. Congressman Tiberi is the chairman of the Ways and Means Subcommittee on Trade.