Posted at 4:00 PM
Trade Agreements Will Help Accelerate Economic Growth
Today, the Commerce Department announced new data that show U.S. businesses exported $2.35 trillion of our goods and services in 2014, hitting a record high for the fifth straight year. U.S. goods exports increased 2.7 percent to a record $1.64 trillion in 2014. Records were set in exports of capital goods; consumer goods; petroleum products; foods, feeds, and beverages; and automotive vehicles and parts. Annual services exports hit an all-time high of $710.3 billion, led by record export levels in the travel, transport, charges for the use of intellectual property, and financial services sectors.
What does this mean for American businesses and American workers? Exports have been a key driver in our economic comeback. Exports support 11.3 million American jobs, and contributed one-third of our annual growth between 2009 and 2013. In some cities– like Kansas City, Albuquerque, Youngstown, Columbus, and Detroit – exports drove nearly all growth out of the recession.
As I have traveled across the United States, speaking with more than 1,500 CEOs and business leaders, I have seen firsthand the way exports are benefiting American companies and workers. Take Davenport Aviation, a certified distributor of spare parts and aviation equipment based in Columbus, Ohio. Davenport Aviation is a small business – they now have eleven employees – but taking advantage of the global marketplace has helped them grow every year since they opened in 2009. Exports account for 99 percent of their business, and this year, because of increased demand, Davenport Aviation plans to add at least 3-4 new jobs.
All over the country, exporters like Davenport Aviation are growing and creating jobs. While America’s economy is on the right track, we have more work to do to ensure our growth is sustainable. Exports are a critical part of that effort, which is why President Obama has made increased trade a top priority. In today’s global economy, American prosperity is directly tied to our ability to reach new markets and new customers overseas. We know that 95 percent of the world’s consumers live outside our borders, so gaining greater access to markets abroad will allow our companies to expand, hire more workers, and pay better wages here at home.
Enacting trade promotion legislation will give the President the ability to move forward on trade agreements that will open doors for American businesses, including small businesses like Davenport Aviation. Passing trade promotion legislation this year is critical.
In addition, we must finish and implement two major trade agreements that would open up new markets to U.S. goods and services: the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (T-TIP). Once completed, these two agreements will give the United States free trade arrangements with 65 percent of global GDP and give our businesses a large base of new potential customers. For example, while the Asia-Pacific is currently home to 570 million middle class consumers, that number is expected to reach 2.7 billion by 2030, and this Administration wants our American businesses and workers to have access to that opportunity.
New trade agreements are about more than just global market opportunities. They are also essential to ensuring fairness for our businesses, to upholding our values worldwide, and to advancing our global economic leadership.
We must ensure that American companies can enter foreign markets on fair terms. Our domestic market is already the most open in the world, with low tariffs on foreign goods that are sold here. However, many of our trading partners have placed large tariffs on U.S. goods sold in their markets, making high-quality American products like cars, food products, chemicals and others too expensive for consumers. This inhibits the competitiveness of American businesses that sell abroad, and the implementation of new trade agreements will help ensure our firms can operate on a level playing field.
In addition, we know that when the United States puts in place new trade agreements around the world, we have an opportunity to promote our values and raise global standards. From the environment to labor to intellectual property rights, we believe there is a way to operate in the 21st century that is defined by fair wages, a safe workplace, and a protected environment. These types of standards are taking center stage in the trade agreements currently under negotiation.
New trade agreements will also help America assert our global economic leadership. In an increasingly interconnected world, our competitors are not standing still. In the absence of American leadership on trade, other countries will set the rules of the road for the 21st century with weaker standards – which will leave American workers and businesses at a competitive disadvantage. With our leadership, through TPP, we are bringing together critical strategic alliances with partners around the world – ensuring that the United States continues to shape and define the global economic landscape.