Testimony by Ambassador Michael Froman to the Senate Finance Committee on Congressional Trade Priorities
April 16, 2015
*As Prepared for Delivery*
Chairman Hatch, Ranking Member Wyden, Members of the Senate Finance Committee, thank you for the opportunity to testify today.
Increasing access to foreign markets for U.S. exports through enhanced trade opportunities has long been a bipartisan effort because trade plays such a critical role in supporting good jobs, spurring growth, and strengthening the middle class.
Closely related to these stakes is the fact that sustaining our nation’s competitive position in the world hinges on our economic strength and our ability to lead on trade.
The importance of trade to America’s economic well-being has never been clearer. Since 2009, U.S. exports have contributed nearly one-third of our overall economic growth.
Last year, U.S. exports reached $2.35 trillion, a record-breaking amount that supported an estimated 11.7 million jobs, an increase of 1.8 million jobs since 2009.
With those jobs paying up to 18 percent more than jobs not related to exports, trade policy has an important role to play in raising wages and living standards for the middle class.
Partially as a result of our exporting success, our economy continues to grow. Job creation is happening at the fastest rate since the 1990s, and wages are finally starting to rise.
After nearly two decades in decline, factories are opening in this country again, manufacturing is starting to return from overseas, and we have added 900,000 new manufacturing jobs over the last five years.
But we can do better. The playing field is still not level for U.S. workers. The United States made the decision decades ago to have an economy that is open to the world. Our tariffs are low, and we don’t use non-tariff barriers to discriminate against other countries.
But when we sell our goods abroad, our businesses and workers often face much higher tariffs and countless non-tariff measures.
Many of these imbalances are in areas where the United States is most competitive: 50% tariffs on machinery, 70% on autos, and up to 400% on certain agricultural products.
In a world where more than 95 percent of all customers live outside our borders, the disadvantages our workers and businesses face are less an inconvenience than an injustice. Fundamentally, trade negotiations are about addressing that injustice by changing the status quo so that it works better for Americans.
A critical tool to help us level the playing field for our workers is trade promotion authority. During the eight decades since President Franklin Roosevelt signed the first congressional trade negotiating legislation into law, Congresses of both parties have revised and renewed that legislation 18 different times under Democratic and Republican Presidents alike.
But TPA hasn’t been updated since 2002. During that time, the global economy has changed significantly. Congress now has the opportunity to account for those tectonic shifts as well as the emerging consensus around key trade issues.
Bipartisan TPA will bring us one step closer to delivering trade agreements like the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). With those agreements in place, American workers, farmers, ranchers, and businesses of all sizes will have access to nearly two-thirds of the global economy. That will help make America the world’s production platform of choice: the premier location for making things and selling them all over the world.
Within our reach is an opportunity to promote not only America’s interests but also our values. That’s why leaders from civil society and the private sector have spoken out about the important role that trade has to play in creating American jobs, advancing the global development and anti-poverty agenda, and protecting the environment. Trade brings together voices from our agricultural sector and our manufacturing and services sectors. And it has united mayors across the country, from Tallahassee to Tacoma and Long Beach to Louisville.
They understand that the choice we face today is clear. It is between a world in which America sets the rules of the road on trade and a world in which our competitors do. We cannot change the status quo by sitting on the sidelines. As we speak, China and others are negotiating an agreement that would encompass over three billion people.
If we allow others to carve up the markets of the future, our workers and businesses will pay a steep price. To drive production in the United States and create good jobs here, we must lead – and we must lead together, with a united, bipartisan voice about our commitment to opening markets for our workers and businesses.
With so much at stake, I look forward to continuing to work with this Committee and the Congress to pass TPA and to advance the broader trade agenda, including renewing the Generalized System of Preferences that expired in 2013 and the African Growth and Opportunity Act well before its expiration in September. We also look forward to working with you to renew Trade Adjustment Assistance.