With 95 percent of the world’s consumers outside U.S. borders, there is simply no denying the tremendous economic impact of international trade, here in New England and throughout the U.S. These markets must be cultivated in order to sustain economic growth, stimulate innovation, and increase our region’s global competitiveness. If the U.S. does not tap into these foreign markets, there is no doubt our competitors around the globe certainly will.
In 2014 alone, the value of goods exported from businesses in New England was more than $56 billion, supporting more than 264,000 jobs. Here in Connecticut, some 5,700 companies export their products. In 2014, $15.9 billion in goods were exported from Connecticut, with more than 75,000 jobs supported by exports. The state’s leading manufacturing export in 2014 was transportation equipment, with $7.3 billion in products exported.
As our government works to increase access to foreign markets through free trade agreements, these numbers will only grow. Currently, there are two major multilateral trade agreements being negotiated, both of which could reap tremendous economic benefit for the New England region.
Negotiations are nearly complete on the Trans-Pacific Partnership, which the U.S. began negotiating in 2009 with a group of like-minded trading partners, including Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. In 2014, exports of goods from New England to these Trans-Pacific Partnership nations accounted for some $20.3 billion. With the Trans-Pacific Partnership, even more significant trade and investment opportunities would undoubtedly be provided to companies in our region.
The U.S. is also in the process of negotiating a major trade agreement with the European Union, known as the Transatlantic Trade and Investment Partnership. In 2014, exports of goods from New England to the European Union accounted for roughly $17.5 billion. Some of New England’s top trade partners, including Germany, France and the United Kingdom, are all party to the Transatlantic Trade and Investment Partnership. The proposed pact also has the potential to bring new issues into the realm of trade agreements that are of particular interest to New England companies, such as the information and communications technology and biopharmaceutical sectors, including digital trade and regulatory cooperation.
One critical first step to finalizing these agreements is the passage of legislation granting Trade Promotion Authority. It allows the president to negotiate international trade agreements that Congress can approve or reject with a simple “up-or-down” vote. Without Trade Promotion Authority, the U.S. is at a disadvantage at the negotiating table. In order to facilitate these and other trade pacts, assurances must exist so that there will not be changes to the agreements as they are enacted.
The recent passage of legislation granting Trade Promotion Authority by the U.S. Senate is a tremendous step in the right direction. While it is understandable that some members of Congress are concerned that Trade Promotion Authority limits their role in trade agreements, the bill passed by the Senate includes rules for negotiation ensuring that many of the concerns surrounding possible negative impacts of trade agreements will be appropriately addressed.
It is estimated that approval of the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership would open up markets comprising about two-thirds of the world’s gross domestic product. That’s not an opportunity we can afford to pass up, but the fact of the matter is, we need Trade Promotion Authority to get there.
The New England Council is hopeful that the House will take action in the coming weeks to pass Trade Promotion Authority. Doing so will give businesses of all types and sizes throughout our region increased access to foreign markets, enabling them to grow and create new jobs, and encouraging them to innovate and compete globally. Expanded international trade presents a world of opportunity for New England — opportunities we surely do not want to miss.
James T. Brett is the president and CEO of The New England Council, a nonpartisan alliance of businesses, academic and health institutions, and public and private organizations that promote economic growth.
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