Long before baseball players signed eight-figure contracts, New York Yankees pitcher Lefty Gomez was asked to take a pay cut after a lousy year–from $20,000 to $7,500. Gomez proposed a compromise: “You keep the salary and pay me the cut.”
Now that baseball season is underway again, our whole country is in a position to empathize with Gomez–if only because of international trade. The United States is party to a handful of important free-trade deals. Like that struggling pitcher, though, it’s possible to think we might be better off switching the agreements we now have for the ones we’ve missed out on over the last few years.
President Bush made this point forcefully at a State Department event on April 4, which I had the privilege of attending. There are about 150 international free-trade deals on the books today. The United States is party to a mere three of them–one with Canada and Mexico (NAFTA), another with Israel, and a final one with Jordan. The European Union, by contrast, has 31 arrangements.
“While we’ve been marking time, our competitors have been working, and they’ve been signing agreements. While we have been delaying, they’ve been trading,” said the president.
In other words, we’re being left in the dust. That’s because President Bush still lacks Trade Promotion Authority–the ability to negotiate free-trade agreements with other countries and submit them to Congress for an up-or-down vote. Every president since Gerald Ford has had this important device at his disposal, but it lapsed eight years ago and still hasn’t been renewed.
In December, the House of Representatives voted to give Bush this vital negotiating tool. The Senate Finance Committee also has lent its approval. Now the whole Senate must act and give our recession-wracked economy the sort of stimulus only increased trade can provide.
Passing TPA would provide a tremendous boost. International trade currently accounts for more than one-quarter of U.S. productivity, according to the Department of Commerce. More than 12 million jobs depend on exports, including one out of every five manufacturing jobs. These are good jobs, too. Those that rely on exports pay 12 to 15 percent more than the average for all U.S. jobs because they tend to require greater skills and education.
Farmers especially stand to gain. One third of all agricultural production in the United States is exported. Every American farmer produces food and fiber for 129 people–97 fellow Americans and 32 people living in other countries. Agriculture is actually one of the few areas in our economy that enjoys a trade surplus.
Because free trade deals always open markets, countries that participate in them immediately increase commerce with each other. Since the passage of the NAFTA agreement, for instance, we’re buying more goods from Canada and Mexico and they are buying more from us. This is good for consumers and producers all across North America, and it’s an experience we can replicate with dozens of other countries if the president gains TPA.
Americans have nothing to fear from free trade. We can compete with anybody. As President Bush said, “I’m confident in America products, I’m confident in American entrepreneurs, I’m confident in the American worker, I’m confident in the American know-how, I’m confident in America’s farmers, I’m confident in America’s ranchers.”
In the meantime, other countries simply won’t enter serious negotiations with the United States. As Pascal Lamy, the European Commissioner for Trade, recently noted, “If [TPA] is denied by Congress, it would be hard for the U.S. administration to establish itself as a credible trading partner.”
The whole world is moving toward freer trade–the latest round of successful trade talks, in Doha, illustrate this trend. The future promises more open trade and fewer barriers to international commerce, but only for the countries that step up to the plate and begin bargaining. With the House vote, we’re on deck. Only Senate approval can put our country in the batter’s box.
The alternative–denying TPA to our president–places us in the unenviable position of poor old Lefty Gomez, facing one steep pay cut after another as the rest of the world bargains away tariffs and other barriers for everybody but Americans.
Dean Kleckner is Chairman of Truth About Trade and Technology, a national grassroots organization based in Des Moines, IA formed by farmers to promote expanded trade and advancements in agricultural biotechnology.