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The Council on Foreign Relations has published a new report on U.S. trade and investment policy. Some highlights from the report:
EXPORTS SUPPORT BETTER, HIGHER-PAYING JOBS – AND THE AMERICAN PEOPLE KNOW IT
• Obama Administration policies have focused on boosting exports and attracting investment, supporting more and better-paying jobs for Americans than non-export jobs – but continued success requires pursuing “more opportunities for the United States in global markets” and making sure to take “full economic advantage of those openings.”
• The American people understand the benefits of trade. According to Gallup, 57 percent of Americans emphasize the economic potential of exports while only 35 percent emphasized threats from foreign imports. This is the highest level of support for trade in the twenty year history of the poll.
THE KEY TO SUCCESS IS TO PURSUE NEW MARKET OPENING AGREEMENTS
• U.S. exports are at record highs and that a larger share of U.S. GDP comes from international trade than it did twenty years ago – but future U.S. economic growth depends on the ability to capture a larger share of emerging markets that are creating a global middle class of consumers.
• Because the United States is most competitive where trade barriers are highest, further trade liberalization is an important priority for the U.S. economy. “The policy challenge facing the U.S. government is to continue to address those areas of weakness so that greater economic benefits will flow from increasing U.S. integration into the global economy.”
• TPP and TTIP “could deliver the biggest market opportunities in a generation” and that if they are ratified, it will increase the share of U.S. trade covered under FTAs from 39 to 64 percent.
SERVICES, IN PARTICULAR, ARE A HUGE OPPORTUNITY
• The large U.S. trade surplus in services due to our highly skilled workforce in tradable services like engineering, architectural design, financial consulting, or legal services. In particular, travel, financial services, and royalties and license fees for U.S. inventions play a key role in driving U.S. leadership in the services sector.
• Only 5 percent of U.S. business services firms export, compared to 25 percent of manufacturers – meaning that there is a huge potential space for a job-creating expansion in services trade.