For the middle class, trade issues are crucial
By Ed Rendell The problem with trade policy, Adlai Stevenson once lamented, is that its "greatest need is for fresh clichés." It other words, it's boring.
By Ed Rendell
The problem with trade policy, Adlai Stevenson once lamented, is that its "greatest need is for fresh clichés." In other words, it's boring.
My father, a converter in the textile industry, loved Stevenson so much that he brought me along to hang posters supporting his presidential run in 1952, when I was only 8 years old. Perhaps it's no surprise that Stevenson's commitment to politics that worked for the public, whatever their publicity value, is something I grew to embrace during my own political career.
During my more than three decades in public service, what's kept me going isn't generating headlines, but jobs and better paychecks for the middle class. Since leaving office, I've remained an outspoken advocate for investing in infrastructure and education. Sure, I'd rather speculate about the Eagles' off-season pickups, but I believe strongly that how we handle these issues will define our nation for decades.
Just like infrastructure and education, promoting trade is a critical investment in America's future. The stakes are especially high for middle-class Americans, who stand to gain the most if America leads on trade and lose the most if it doesn't.
Trade might not be a kitchen-table issue, but it's been helping American families put food on their tables for years. Expanding trade has added more than $13,000 to the average American household's annual income. According to a recent survey of mothers, that's roughly what raising a child costs every year. Deals currently under negotiation could add an additional $3,000 to that same family's income.
During recent years, trade has been one of America's best ladders for climbing out of the Great Recession. Since 2009, the increase in U.S. exports has contributed one-third of our overall economic growth. Record exports are now supporting more than 11 million jobs, including 1.6 million new jobs over the last five years. It's sobering to imagine what American communities would look like without this trade-driven growth.
Pennsylvania has shown the benefits of concentrating on promoting exports. When I became governor, I started World Trade PA and set up an office of international business development. We built the largest network of overseas trade representatives of any state, connecting Pennsylvania firms with 19 foreign officers, covering 55 markets. The number of our international trade and investment offices increased from 14 to 23, and we were the only state with a presence in Indonesia, which has the world's fourth-highest population and an exploding middle class. As a result, Pennsylvania exports overall increased from $16.2 billion to $40.2 billion.
Now that average wages are finally starting to rise, an aggressive approach to expanding trade can help cement these gains and put more money in middle-class pockets. The average American worker makes up to 18 percent more when working for a business that exports, and that job is more secure because exporters are better able to weather economic downturns. America's middle class could use more of the better-paying jobs that trade supports.
Small businesses have a big stake in promoting trade, too, as they make up the vast majority of all American business that export. These local job creators are the backbone of our economy, and when they export, they tend to grow faster, hire more workers, and pay those workers higher salaries. In a world where 95 percent of the customers live outside our borders, creating more jobs at home depends on making it easier for our small businesses to compete overseas.
Two pending deals would help level the playing field for American workers and businesses overseas, bringing more high-paying jobs home and helping our small businesses win in the world's fastest-growing markets.
In the Asia-Pacific region, the Trans-Pacific Partnership (TPP) would knock down barriers to a wide range of important made-in-America exports. As it stands, foreign competitors have struck deals that undercut our competitiveness in these markets. For example, while construction equipment made in Pennsylvania is taxed at up to 30 percent when it arrives in Malaysia, equipment made in China and elsewhere faces much lower or no tariffs.
The TPP would also raise standards that protect the livelihood of American workers. It will include the greatest labor and environmental protections of any trade agreement, as well as provisions that will protect the 40 million American jobs tied to intellectual-property-intensive industries.
With the combination of the TPP and a deal the United States is negotiating with the European Union - the Transatlantic Trade and Investment Partnership - Main Street America would get premium access to nearly two-thirds of the global economy. Our high standards would become widely adopted, doing good for the world's workers and, in turn, helping U.S. workers do well by increasing our exports, attracting more investment, and supporting more high-paying jobs.
Bringing these benefits home, however, requires bipartisanship, a rare commodity in politics these days. Fortunately, trade is one of the few areas where there is enough agreement to get something important done. President Obama has asked Congress for trade-promotion authority, and Republican leaders have said they're ready to work with him. Democrats who care about working Americans should support giving the president trade-promotion authority as well.
Trade policy might not be any more colorful than it was during Stevenson's time, but for America's middle class, promoting trade matters more than ever. Doing so the right way will mean more good jobs, higher wages, and a stronger middle class. Sometimes, the big problems call for boring solutions.