The Importance of Trade in Creating Jobs

by Ekaterina Mozhaeva and Stefanie Westerman

Yesterday, President Obama gave a speech at the Brookings Institution outlining his strategy to promote job growth. The President highlighted three new proposals.  First, he called for additional infrastructure investment. Second, he proposed a fresh round of tax cuts and incentives to help small businesses and get them to start hiring again. And third, he urged Congress to create new financial incentives for homeowners to make their homes more energy efficient.

The President also mentioned ongoing efforts to promote job growth such as educating the workforce for a 21st century economy and "working to break down barriers and open overseas markets so our companies can better compete globally, creating jobs in America by exporting our products around the world."  The new proposals, he noted, would increase the competitiveness of American businesses and would make it "possible for companies to more easily and effectively move their products across this country and around the world, and that will create more jobs."

It seems that the benefits of trade are starting to get more attention from the White House.  Recently, we've heard a similar message from the President's cabinet. In an editorial for The Seattle Times on December 7, U.S. Secretary of Commerce Gary Locke highlighted the role of trade in creating jobs, writing,

"[Trade] is also one of the keys to America's economic recovery — especially when it comes to exports. Exports are already a growing and substantial part of the U.S. economy.  They account for almost 13 percent of American GDP, which is three times as much as 50 years ago.  And exports account for more than 6 million American manufacturing jobs alone."

In addition, at the December 3 White House Jobs and Economic Growth Forum leading up to today's remarks, participants discussed how to expand job opportunities for American workers through exports. Meanwhile, this week, U.S. Trade Representative Ron Kirk will be heading to San Diego to promote trade in California. 

Many of these sentiments on trade echo the proposal expressed by the U.S. Chamber and its President and CEO Tom Donohue. On September 15, the Chamber's President and CEO Tom Donohue highlighted the role of trade in creating high paying jobs as part of the Chamber's campaign on trade and called to double U.S. exports in the next five years. In addition, Donohue unveiled the U.S. Chamber's study entitled Trade Action – or Inaction: The Cost for American Workers and Companies. It shows that more than a half million jobs are at risk as a result of America's failure to act on the pending free trade agreements and the consequences of ‘Buy American' rules.

Separately, on November 30, Chamber President and CEO Tom Donohue sent an open letter to President Obama laying out policy prescriptions to create jobs. Donohue called to increase private and public infrastructure investment, advance pro-growth tax policies, and to better educate and train Americans for 21st century jobs. And, he again called for a national goal to double U.S. exports in five years, as reported by Reuters. "We can create millions of good American jobs by pursuing the achievable goal of doubling our exports to those consumers in five years, and then doing it again." 

There is no question that trade sustains millions of American jobs. Doubling our exports in the next five years can be done by helping small businesses to export, enforcing trade agreements, enacting the pending trade agreements with Colombia, Panama and South Korea, and reaching a successful conclusion to the Doha Development Round. But to do this, we need more trade tools available to us to reap the benefits of global engagement and this means more leadership from the White House. 

Comments

[Christchurch Jobs]

In New Zealand there has been a lot of talk about trade relations with the USA, Many kiwis have warmed to US relations. Last year there was a scoop event with David Letterman hosting a show with our Prime Minister, this was a big thing over here.

Obama is right in making creating jobs an important factor, but he needs to make sure that the jobs he creates dont evaporate, they need to be real jobs that last not government propped up jobs, for short term civil contractor roles, but real sustainable work for people