On December 6, 2001, the Trade Promotion Authority bill (TPA) passed in the House of Representatives by a vote of 215 to 214.

Although the bill’s passage was reason to celebrate, the one vote margin is cause for concern. The narrow win indicates that Members of the House of Representatives are deeply divided over the benefits of international trade and don't fully understand its impact.

Soon, TPA will be voted on in the Senate — where its fate is uncertain. But due to the positive impact this legislation will have on the Hudson Valley region, it's very important that Senators Schumer and Clinton support it.

TPA requires Congress to pass or reject trade agreements without making any changes. Since 1994, when legislation expired, foreign governments have been reluctant to make new agreements and concessions that could be changed later by Congress. Without TPA, the United States has been handicapped in its ability to negotiate new trade accords.

Why is this important?

In order to generate new, higher-paying jobs, local companies need to export more goods and services worldwide. But in order to do so, the United States needs to forge new trade agreements that knock down foreign tariff barriers which make our goods and services less competitive internationally.

What's more, while we sit on the sidelines, our foreign competitors are establishing bilateral accords at record pace — giving their exporters preferential access to the most lucrative markets in the world.

How far have we fallen behind?

Consider this: of the estimated 130 free trade agreements in force around the world today, only three include the U.S. This has put our companies, workers and farmers at a severe disadvantage, and has resulted in lost export deals.

For example, the absence of the U.S. from the Canada-Chile free trade agreement alone has cost U.S. companies $800 million a year, according to the National Association of Manufacturers. Since 1997, Canadian goods have entered Chile duty-free, while ours have been assessed duties that make them more expensive. As a result, Chileans are buying goods from Ontario at the expense of New York.

TPA served Presidents Ford, Carter, Reagan, Bush, and Clinton. It's time that President Bush is given TPA. Thousands of New York State companies, workers and farmers need it.

But New York is not the only beneficiary. Exports now account for almost one-third of real U.S. economic growth. As a result, the income of workers and farmers, as well as the growth prospects of an increasing number of U.S. businesses are pegged to international trade.

In 2000, the United States exported $786 billion in goods and $317 billion in services. Based on calculations provided by the U.S. Trade Representative, these exports support over 13 million U.S. jobs. And these jobs pay more than the average U.S. wage.

Plus, communities where exporters reside also benefit through a more stable workforce and a strong tax base. Furthermore, the revenue generated from exports flows to local communities through restaurants, retail stores, movie theaters, etc., and spreads risk should the domestic market enter a period of slow growth or recession.

International trade has some drawbacks, but they are small in comparison to the gains. For example, according to The CATO Institute, less than 2% of total U.S. non-farm workers are at risk from imports.

Our farmers and workers can compete and win in world markets, but only if Congress gets us back on a level playing field. This is why I encourage Senators Schumer and Clinton to support TPA when it soon comes to a vote.

This article appeared in the Hudson Valley Business Journal, February 2004.
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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, competitive strategies and the latest economic trends. He also is chair of the Upstate New York District Export Council and founder of the ManzellaReport.com and Manzella Trade Communications Inc. His latest book is Global America: Understanding Global and Economic Trends and How To Ensure Competitiveness.




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