Whoever said "If it ain’t broke, don't fix it," probably lived in a simpler time. In today's rapidly changing global environment, the United States needs to be proactive and anticipate problems.

Currently, the U.S. is behind the curve. We are a party to only three out of 150 free trade agreements in force around the world. Many of these agreements have evolved into trade blocs, such as the Association of Southeast Asian Nations (ASEAN) and the European Union (EU). And several blocs plan to expand.

For example, EU accession negotiations are underway to admit 13 Eastern European countries — a move that will make the EU's consumer base twice as large as the United States'. Mercosur, the South American bloc, is negotiating with the EU to establish a trans-Atlantic free trade zone. And recently, ASEAN and China agreed to consider establishing a trade bloc that would represent a market of 1.7 billion consumers.

What's the problem?

As our competitors establish larger trade blocs that eliminate import barriers among member countries, U.S. exports — which still incur duties — are placed at a competitive disadvantage. To remedy this, the U.S. needs to forge new trade agreements that level the playing field. Unfortunately, our ability to do so has been compromised since Trade Promotion Authority (TPA), previously known as Fast Track, expired in 1994.

TPA requires Congress to pass or reject trade agreements “as is.” Without TPA, foreign governments are reluctant to negotiate treaties that Congress could later change. Soon, our Senators will vote on TPA, and it’s essential they support it. TPA served Presidents Nixon through Clinton. Now, President Bush needs it to help our workers, farmers and families.

Exports support more than 12 million higher-paying U.S. jobs, strengthen companies and farms, and improve our tax base, while sending export revenue to local communities through restaurants, retail stores, etc. In 1950, trade accounted for less than 5.5% of U.S. economic growth. Today, it has become an integral part of everyday life, accounting for almost one-third of our economic growth. In fact, one in three acres of U.S. agricultural production is now exported.

Unfortunately, some blame trade for job losses and industry restructuring. In reality, less than 2% of non-farm workers are at risk from imports. Technology, not imports, is the real displacer of jobs. Would we stop technological advancement because a small number of jobs will become obsolete?

In the early 19th century, the English Luddites attempted to destroy textile machines because they replaced weavers. Today, modern-day "Luddites" want to essentially do the same — but have mistaken the impact of technology for trade.

Entering the 21st century is in many ways similar to entering the 19th century. The shift from an agrarian to an industrial economy compelled workers to leave farms in search of factory jobs. Industrialization created fear and demanded that workers learn new skills. Today, with the advent of globalization and the information economy, the U.S. is increasingly specializing in more complex, value-added goods and services. Consequently, new skills again are demanded. But for those who can't adapt, the expansion of trade adjustment assistance that's incorporated in TPA legislation is welcomed.

Without greater access to foreign markets, U.S. companies will suffer. And even companies that don't export are at a disadvantage because, chances are, portions of their components sold locally are incorporated into exported products.

To succeed in the 21st century, improve long-term economic growth and raise our standard of living, TPA needs to become law. Our companies and workers are doing their part, now Congress needs to do the same.

This article was syndicated by Knight Ridder/Tribune Information Services and appeared in the Houston Chronicle, Greenville News, Milwaukee Journal Sentinel, Sunbury Sunday Daily Item, and The Columbus Dispatch in May 2002.
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John Manzella
About The Author John Manzella [Full Bio]
John Manzella is a world-recognized author and speaker on global business, emerging risks, competitive strategies and the latest economic trends. He also is founder of the ManzellaReport.com and Chief Strategy Officer of Ignition Life Solutions. His latest book is Global America: Understanding Global and Economic Trends and How To Ensure Competitiveness.




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