In the years ahead, U.S. economic growth is projected to remain modest at best. Consequently, for many firm interested in higher returns, international expansion is essential. Plus, markets outside the United States represent 73 percent of global purchasing power, 87 percent of economic growth, and 95 percent of world consumers, reports the U.S. Chamber of Commerce.

In addition, on average, U.S. companies that export employ twice as many workers, produce twice as much output, and generally offer better health insurance and pensions than non-exporting companies, says the Peterson Institute of International Economics, a Washington, D.C. think tank.

In addition, the Business Roundtable, an association of chief executive officers of leading U.S. companies, estimates that trade accounts for nearly one in every five jobs.

Today, the average U.S. import tariff is 1.5 percent, reports the U.S. Trade Representative. However, the average foreign country tariff is nearly 6 percent, says the World Economic Forum. New trade agreements that reduce foreign barriers will help U.S. companies export to a greater extent, contribute to overall economic strength, and create more jobs. But there is a problem: the United States is way behind.

The U.S. currently only has 14 free trade agreements with 20 partners. Unfortunately, there are approximately 400 free trade agreements around the world without U.S. participation. This puts our firms at a competitive disadvantage.

Since only 5 percent of small or medium-size enterprises export, there’s a significant potential for growth.

The United States maintains a manufacturing trade surplus with its free trade agreement partners. This demonstrates that when barriers to trade are reduced or eliminated, American firms can successfully compete anywhere in the world.

To level the playing field, Congress needs to pass new agreements like the recently completed Trans-Pacific Partnership (TPP) that includes 12 Pacific-bordering nations and represents approximately 40 percent of global economic output and one-third of trade.

According to one study, TPP is anticipated to boost inflation-adjusted U.S. annual income by $131 billion by 2030.

Since only 5 percent of small or medium-size enterprises export, there’s a significant potential for growth. And small businesses account for almost two-thirds of America’s net new jobs, says Ed Gerwin, Senior Fellow at the Progressive Policy Institute.

To succeed in today’s hyper-competitive global environment, more companies — both small and large — are adapting to the new economic realities and pursuing markets abroad. For the benefit of our companies, employees and communities, global engagement is one of the best ways to create new jobs and achieve higher economic growth in Upstate New York, my home regions, and the United States.

A modified version of this article appeared in The Buffalo News.

John Manzella
About The Author John Manzella [Full Bio]
John Manzella, founder of the Manzella Report, is a world-recognized speaker, author of several books, and an international columnist on global business, trade policy, labor, and the latest economic trends. His valuable insight, analysis and strategic direction have been vital to many of the world's largest corporations, associations and universities preparing for the business, economic and political challenges ahead.

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