Trade leads the president’s small biz agenda
From the pages of In Business magazine.
It won’t be long before the phrase “lame duck” is applied to President Obama, but he still has an ambitious small business agenda of tax reform, greater access to capital, and, especially, trade. That agenda was spelled out by Jay Williams, assistant secretary of commerce for economic development, on a recent visit to Madison.
Economic growth, already lower than in past recoveries, slowed down to a crawl in the first quarter of 2015, in part due to sluggish exports. One of the most significant things Washington can do to boost growth is for Congress to give the president the authority to negotiate trade deals with Pacific and European nations.
At the moment, the United States is negotiating two trade agreements, one with allies in the Pacific Rim and one with Europe. Based on the skepticism of fellow Democrats, who thwarted trade promotion authority in a May 12 procedural vote, Williams conceded the deals would not only have to lower trade barriers, like tariffs on American goods, they would have to increase environmental and fair labor standards among trading partners, which many Democrats view as flaws in past deals.
“I was the mayor of Youngstown, Ohio, and I know previous trade deals have not always lived up to the hype,” Williams acknowledged. “The president is intent on learning the lessons from previous trade deals.”
The alternative is to withdraw from the world. With so much global business opportunity left unexplored, that would be a lost opportunity. As Williams noted, 75% of new jobs are generated by small businesses and 98% of our exports are from small businesses, but those companies only export to one or two countries. There are tremendous prospects for exporting more U.S. goods to the 95% of the population that exists outside the U.S.
Selling more goods overseas will create more high-paying jobs for Wisconsin and American manufacturers. On average, manufacturing jobs that rely on trade pay 16% more, which means they can be part of addressing wage stagnation, notes First District Congressman and House Ways and Means Chairman Paul Ryan. Ryan, a supporter of “fast-track” trade promotion authority, says foreign trade barriers stack the deck against American workers by making it hard to sell our products overseas.
Like Obama, Ryan has to deal with trade skeptics in his own party. For the sake of economic growth, it’s time for leaders in both parties to build a pro-trade consensus.
Click here to sign up for the free IB ezine – your twice-weekly resource for local business news, analysis, voices, and the names you need to know. If you are not already a subscriber to In Business magazine, be sure to sign up for our monthly print edition here.