November 9, 2001 | Commentary on Taxes
But we won't do nearly as well as we
The reason: Congress still hasn't
granted the president Trade Promotion Authority (TPA) -- a
situation that makes the United States a far less attractive
trading partner than it could be.
TPA gives the president the authority
to negotiate free-trade agreements that are presented to Congress
for approval or rejection, but no changes. Without it, any trade
deal the president negotiates can be completely rewritten, or
loaded with deal-killing amendments, by members of Congress.
TPA essentially tells our trading
partners that the deals they negotiate are the deals we will honor.
They are understandably reluctant to forge trade agreements with a
president who continues to be denied this power by Congress.
Indeed, without it, the United States runs the risk of losing its
influence in the global economy -- not to mention being saddled
with an increasingly moribund agricultural industry.
America's unparalleled agricultural
productivity (we produce far more food than any other country)
means our farmers need maximum access to foreign markets. Already,
one out of every three American farm acres is devoted to export,
and one out of every four dollars made by American farmers comes
And with 96 percent of the world food
market located outside the United States, it's essential that
American goods be able to compete overseas. That won't be possible
unless President Bush can negotiate trade deals that remove or at
least reduce the 62 percent average tariff that gets added to the
price of our goods in foreign markets.
Our competitors are busy taking
advantage of the handicaps President Bush encounters without TPA.
Canada has used its trade deal with Chile to claim large blocs of
market share in some agricultural sectors. Japan is trying to
resurrect its economy by establishing trade agreements with
historic U.S. partners such as Canada, Mexico and Korea.
Meanwhile, we struggle to close deals
because President Bush lacks an authority his predecessors had from
1974 to 1994.
Today, America is party to only three
of the 131 trade and investment agreements in the world (including
one of the 30 in our hemisphere alone). The European Union is
involved in 27 trade deals, is negotiating 15 more, and recently
completed one with Mexico -- our biggest trading partner. Canada,
Korea, Chile and countries throughout East Asia have quickened the
pace of negotiations for their own deals.
The North American Free Trade
Agreement and the Uruguay Round have yielded huge benefits for the
United States. They have added between $1,300 and $2,000 annually
to the pocketbook of the average family of four. (A recent
University of Michigan study showed that a new trade round could
give this same family an additional $2,450 annually.)
NAFTA also has added 600,000 new
American jobs at wages 13 to 18 percent higher than the national
average. Hardly the "giant sucking sound" of U.S. jobs going south
of the border that Ross Perot predicted. And some 12 million U.S.
jobs depend on exports.
But we have no real hope of either
expanding on or adding other such agreements without TPA. The
United States can't even establish itself as a "credible trading
partner," says Pascal Lamy, the European commissioner for trade,
unless Congress grants the president this power.
It's time for Congress to put politics aside and stop holding trade hostage to special interests. The economic well-being of our nation depends on it.
Sara J. Fitzgerald is a trade policy analyst at The Heritage Foundation, a Washington-based public policy research institute.
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