Editor’s Note: This article was originally published on Free Enterprise.
Those who think we can protect U.S. jobs by turning inward have got it exactly backwards. In fact, we must look beyond U.S. shores and pursue lucrative opportunities in world markets if we’re going to drive stronger growth at home, create more jobs for U.S. workers, and compete in a global economy.
Expanding our reach in the world will allow American businesses to grow. Five percent of global consumers live inside of the United States—the remaining 95% are spread out across the world. Foreign consumers represent 80% of the world’s buying power and 92% of economic growth. We need to go where the customers are.
Existing U.S. jobs and key industries depend on trade. Altogether, trade supports 38 million American jobs—more than one in five. One in three manufacturing jobs depends on exports, and for every three acres of American farmland, one is used to grow food that is exported to a growing, hungry global population.
U.S. small businesses are some of the strongest drivers of trade. More than 97% of the 293,000 U.S. companies that export their products are small and midsize outfits. While large companies account for a majority of exports, small and midsize businesses account for more than one-third of all U.S. merchandise exports.
Trade is also a two-way street. If we say ‘no thanks’ to global partners who wish to import goods and services to our markets, U.S. businesses and consumers will suffer. Imports mean lower prices and more choices for American families as they try to stretch their budgets and for companies seeking raw materials and other inputs. Access to imports boosts the purchasing power of the average American household by about $10,000 annually.
It’s true that the playing field for trade isn’t always level. Many countries slap tariffs on U.S. exports that are ten or twenty times higher than our own, and a web of other barriers often shut out U.S. goods and services. That’s why we must negotiate trade agreements to remove those obstacles. U.S. exports to new free trade agreement (FTA) partners have grown four times faster than U.S. exports globally in the years after they are implemented. The expansion in trade spurred by U.S. FTAs supports more than five million American jobs. And while they represent just 10% of global GDP, America’s 20 FTA partners buy nearly half of U.S. exports.
If we don’t engage in the world, we’ll get left in the dust while our global competitors do more business with each other. The world’s strongest and most dynamic economies are aggressively pursuing their own preferential trade deals. Nearly 100 free trade agreements are under negotiation worldwide. The United States has to be in the game so American workers, farmers, and companies can compete and win in the worldwide economy.
Finally, we must think globally in order to tackle our domestic unemployment crisis. Nearly 12 million Americans are unemployed. We estimate the United States will need to create 20 million jobs by the year 2020 to replace the jobs lost in the recession and to meet the needs of our growing workforce. Trade is one of the fastest, surest ways to meet that challenge.
The business community can play a role in expanding U.S. commerce around the world by pushing a number of trade priorities. We must throw our support behind new trade deals, including the Trans-Pacific Partnership agreement in the booming Asia-Pacific region, the Transatlantic Trade and Investment Pact with Europe, and a Trade in Services Agreement with nearly 50 countries. These and other opportunities would drive growth and job creation here at home. Global trade is not the problem, it’s the solution.