Editor’s note: This post was authored by Tom Donohue, president and CEO of the U.S. Chamber of Commerce and was originally published on the official blog of the U.S. Chamber, FreeEnterprise.com. You can find the original post here.
One of the fastest ways to create jobs and grow businesses in the United States is to reach new customers around the world. As U.S. companies scour the globe for consumers, the booming Asia-Pacific region stands out. Over the last two decades, the region’s middle class grew by 2 billion people—and its spending power is greater than ever. U.S. businesses need better access to those lucrative markets and their customers if they’re going to reap the economic benefits.
Although U.S. exports to the Asia-Pacific market increased from 2000 to 2010, America’s share of the region’s imports declined by about 43%—meaning that other countries are stepping up their game. In fact, the growth in U.S. exports to Asia lagged behind overall U.S. export growth in that period.
Why? Many Asia-Pacific countries maintain steep trade barriers against U.S. exports. Nontariff and regulatory obstructions block market access in many countries.
Trade agreements are crafted to overcome these barriers. But what happens if other countries make trade deals among themselves and leave the United States out? The number of trade accords between Asian countries surged from 3 in 2000 to more than 50 in 2011. Some 80 more are in the pipeline. Meanwhile, the United States has just 3 trade agreements in Asia.
The Trans-Pacific Partnership (TPP) is America’s best chance to catch up. Its objective is to achieve a comprehensive, high-standard, and commercially meaningful trade and investment agreement among 11 Asia-Pacific nations, including Japan, Canada, Mexico, Peru, and Chile.
After three years and 18 rounds of talks, negotiators are close to a final agreement. Completing the TPP would pay huge dividends for the United States. A study by the Peterson Institute for International Economics estimates that the trade agreement could boost U.S. exports by $124 billion by 2025, generating hundreds of thousands of American jobs.
The TPP must be comprehensive. In trade talks, whenever one party excludes a given commodity or sector from an agreement, others follow suit, limiting its reach. For the United States to achieve the goal of a true 21st century agreement—with state-of-the-art rules on intellectual property, digital trade, and other key areas—U.S. negotiators must hold fast to the goal of a comprehensive accord.
The TPP could strengthen America’s commercial, strategic, and geopolitical ties across one of the fastest growing and most influential parts of the world. It would be an economic shot in the arm for our nation. And it would send a message to the region and the world that the United States is not going to sit on the sidelines. We’re going to be in on the action.