The failure of Congress to pass Fast Track legislation earlier this month is a blow to growth of Western New York.

Since 1974, U.S. trade agreements, which have been made possible through the use of Fast Track negotiating authority, have opened foreign markets allowing our companies to sell their goods and services worldwide. And over this same time period, U.S. exports have increased more than 600%.

Why are exports important to the United States? During the past decade, U.S. exports of goods and services accounted for one-third of U.S. economic growth. In 1996, they reached $850 billion. This sustained 12 million U.S. jobs that pay 10 to 15% more than the average wage. Furthermore, companies that export expand their employment base approximately 20% faster than others, and are 10% less likely to fail.

Why are exports so important to Western New York? Western New York recovered more slowly from the 1992 recession than the national average, but is now performing relatively well. In 1996, the unemployment rate of the Buffalo-Niagara Falls metropolitan area, the center of Western New York's economic activity, was slightly lower than the national average, and during the first eight months of this year, the two nearly matched. In 1995, the per capita personal income for the Buffalo-Niagara Falls metropolitan area was slightly higher than the national rate and ranked 109th out of more than 300 metropolitan areas. To ensure regional growth, our companies need greater access to foreign markets.

The prosperity of both our region and New York State, the third largest exporter among all U.S. states, is closely tied to exports. To our benefit, the highest employment sectors in the Buffalo-Niagara Falls area are among the top state export industries.

For example, our local transportation industry employs 14,500 workers, making it the largest manufacturing sector in Western New York. This industry is also highly competitive internationally, and as such, is New York's fourth largest export industry. As local transportation equipment exports increase, regional employment and revenues will rise, benefiting our workers and companies.

Industrial machinery and equipment, our third largest sector, employs 9,200 Western New Yorkers, and is our second largest export. Producers of food and kindred products, chemicals, electronic equipment, paper, and scientific instruments are among Western New York's top 10 highest employment sectors and New York State's top nine export industries. The growth of these industries is vital to our region's growth. As a result, we need to further open foreign markets to our products.

How have trade agreements advanced exports? Since 1992, trade agreements such as the Tokyo Round and the Uruguay Round of the GATT, and the North American Free Trade Agreement (NAFTA), as well as 200 other lesser-known trade agreements have benefited Western New York by substantially reducing foreign trade barriers.

Only three years after its passage and despite a Mexican recession, NAFTA is fulfilling its promise. U.S. trade relations with Canada and Mexico are better, prices on consumer goods are lower, the region is more competitive with fast-expanding trade blocs in Europe and Asia, and trade and investment throughout North America has increased.

In fact, from 1993 to 1996, U.S. exports to Mexico increased 36.5%, despite a 3.3% contraction in Mexican domestic demand, while exports to Canada and Mexico created 311,000 new jobs. What's more, in the first four months of 1997, U.S. exports to Mexico virtually equaled U.S. exports to Japan — an economy 12 times larger than Mexico's.

Why is the Congressional passage of Fast Track trade authority so important? Fast Track requires Congress to pass or reject a trade agreement, but prevents any changes. Without it, foreign governments are reluctant to make agreements and concessions that could be changed later.

To our disadvantage, Fast Track has not been renewed in three years. During this time, Canada and Chile forged a trade agreement that created freer access to each others' markets. This has hurt U.S. companies and workers, especially in the telecommunications and fresh fruit sectors. And that's not all. Numerous other trade accords, involving European and Latin American countries, have forged trading relationships at our expense.

If passed, how will Fast Track authority be used? If President Clinton is granted Fast Track negotiating authority by Congress, he is expected to forge new trade agreements with Latin American and Asian countries, whose economies are growing three times faster than ours. Overall, the focus of the President's efforts will be to lower or eliminate stiffer foreign tariffs.

The United States accounts for only 4% of the world's population. In order for both our country and Western New York to increase its standard of living and remain globally competitive, we need to sell to the other 96%. Fast Track is essential in helping us accomplish this. When it soon comes up for a vote, Fast Track should be renewed by Congress and supported by Western New York.

This article appeared in Business First, November 24, 1997.
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John Manzella
About The Author John Manzella [Full Bio]
John Manzella, founder of the ManzellaReport.com, is a world-recognized speaker, author of several books, and a nationally syndicated columnist on global business, emerging risks and economic trends. His latest book is Global America: Understanding Global and Economic Trends and How To Ensure Competitiveness.




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