“The problem with too many politicians in Washington is that they canÕt even get to the theory part of the equation because they refuse to see what works in practice. Otherwise, theyÕd busy themselves with trying to create more ways for Americans to sell what we make and grow to people in other countries.
Improving trade opportunities is an ideal economic stimulus package–it not only helps American workers, but it also builds upon one of the bona fide strengths of the sputtering U.S. economy.
Our economy certainly could use a kick start. In the final quarter of last year, growth dropped to less than one percent. Last month, the country lost jobs for the first time in more than four years. Technically, we arenÕt in a recession, but six out of ten Americans think that we are, according to a poll released by the Washington Post earlier this week.
Exports are one of the reasons why we arenÕt in a recession already. They grew by about 12 percent last year, to roughly $1.5 trillion. Without these sales to foreign customers, the economy would truly be in the dumps.
President Bush appreciates this fact. ÒWe must trust American workers to compete with anyone in the world and empower them by opening up new markets overseas,Ó he said last week, during his State of the Union address. ÒToday, our economic growth increasingly depends on our ability to sell American goods and crops and services all over the world.Ó
In his speech, Bush thanked the Democrat-controlled Congress for its recent decision to approve a free-trade agreement with Peru, which will create meaningful opportunities for American farmers and manufacturers to reach new consumers. He also called on Congress to approve pending deals with Colombia, Panama, and South Korea. Many of the products made in Columbia and Panama currently enter the United States duty-free, whereas U.S. products must pay tariffs to gain similar access to their markets.
ÒThese agreements will level the playing field,Ó said Bush. ÒThey will give us better access to nearly 100 million customers. They will support good jobs for the finest workers in the world: those whose products say ÔMade in the U.S.A.ÕÓ
There are plenty of potential stumbling blocks. Senate Finance Chairman Max Baucus of Montana has said that Congress should not consider any more trade agreements until it has passed new legislation on trade-adjustment assistance, which seeks to help workers who have lost their jobs due to trade.
This demand doesnÕt need to become a deal breaker. In his speech, Bush acknowledged that Òtrade can mean losing a job, and the federal government has a responsibility to help.Ó He, too, called for reforming trade-adjustment assistance.
Although trade helps far more people than it hurts, this is a political compromise that makes economic sense. The alternative is a political stalemate in which nothing gets done: no new trade agreements and no reformed trade-adjustment assistance.
Going forward, Washington should take a renewed interest in global trade talks. Although itÕs anybodyÕs guess as to whether the World Trade OrganizationÕs Doha round can wrap-up successfully in the not-too-distant future, chances for progress occasionally present themselves. Brazilian president Luiz Inacio Lula da Silva recently called Bush to suggest holding a trade summit in April, when both leaders are in Europe.
Bush and Congress may not let each other act on much of this agenda–itÕs a presidential-election year, which means that the politicians will play even more games than usual. It would be nice if they simply could agree that the next president, whomever that person is, will have Trade Promotion Authority.
That way, we could pursue pragmatic policies at any time. After all, why should we wait for an economic downturn before choosing to stimulate the economy through trade? Promoting exports is a good idea at all times.
ThatÕs not a theory. ItÕs common sense.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology.