Lowering trade barriers expands opportunities for entrepreneurs, businesses and workers to capitalize on the competitive advantages they hold in the marketplace.
One of the advantages that the U.S. holds in the global economy is in the area of technology. We are a high-tech, knowledge-based, high-productivity, entrepreneurial nation.
After sitting on the sidelines for several years, the U.S. finally got back in the trade policy game when Congress passed and President Barack Obama signed trade agreements with South Korea, Colombia and Panama in October.
It's instructive to take a look at a few of the supporting statements for these trade deals from the high-tech community.
• Microsoft released the following statement: "Microsoft applauds today's passage of the bilateral U.S.-South Korea, U.S-Panama and U.S.-Colombia Free Trade Agreements. We see these agreements as one essential part of a broader economic agenda to restore economic growth, spur innovation and create jobs. For Microsoft and its network of partners, many of whom are small businesses, the Agreements will provide new market access opportunities and strengthened rules in key areas such as services, intellectual property rights protection and regulatory due process. We look forward to working with the Administration and the Congress to realize the benefits of these groundbreaking Agreements."
• When the trade agreements were submitted to Congress, the Consumer Electronics Association declared: "Reduced tariffs mean U.S. businesses can export more of their products, which translates into job opportunities and economic growth. For example, for each day Congress does not approve the Colombia trade deal, U.S. exporters pay $2 million in unnecessary tariffs. In Panama, the largest category of U.S. exports includes electrical machinery that faces tariffs of up to 81 percent. Once the pending free trade agreements are passed, more than 88 percent of U.S. exports into Panama and Korea will enter duty-free."
• Business Software Alliance President and CEO Robert Holleyman observed: "These three free trade agreements are tremendous wins for the software and IT industries. They will increase sales and exports of US software products and create jobs in the process. All three agreements include world-class intellectual property provisions that will help spur technology innovation in the United States and among our trading partners. They prohibit tampering with technological protection measures, and they include guarantees of statutory damages for intellectual property theft. The agreements also will increase market access for IT products and services, and formalize non-discrimination in e-commerce."
Indeed, when noting the industries set to benefit immediately from these trade agreements, information technology is cited by the Office of the U.S. Trade Representative, as well as all industries that rely on stronger intellectual property protections.
With these three deals finally done after several years of delay, what's next on the U.S. trade agenda?
Well, first, it should be noted that it was encouraging that during a bad economy, a Democratic president brought these trade deals to Congress, and then both the House and Senate passed each by large majorities. That's a significant blow against protectionist forces, which tend to be at the height of their strength in tough economic times.
Rather than letting the trade agenda recede into the background after getting these three deals approved, the White House should be pressing ahead forcefully with even more ambitious trade accords. While the U.S. should negotiate and implement trade accords with any individual nation willing to do so, regional accords can accomplish big leaps forward in lowering trade barriers.
For example, the administration needs to move aggressively on the Trans-Pacific Partnership (TPP) Agreement. As noted by the USTR office, this Asia-Pacific regional trade agreement is being negotiated among the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam.
It is critical that Japan be brought into the process. Writing on the Council of Foreign Relations blog on October 14, Stewart Patrick pointed out, "The administration's priority must be to secure the participation of Japan, the world's third largest economy (just behind China) and the source of 5.7% of America's total international trade. Bringing Japan into the TPP is an essential step in the president's ambitious goal, announced in January 2010, of doubling U.S. exports by 2015."
On October 26, a report in TheHill.com offered hope on moving ahead with the TPP effort: "Passage of three free-trade agreements should jump-start negotiations and may even expand talks with Asia-Pacific nations, U.S. Trade Representative Ron Kirk said Wednesday night. Broad outlines of an agreement on the Trans-Pacific Partnership (TPP) are on track for unveiling at the U.S.-hosted Asia-Pacific Economic Cooperation (APEC) meeting in two weeks in Honolulu, although more work is expected to continue, Kirk said."
Let's hope a true free trade agenda gains traction. It would be a big plus for the economy. After all, reduced trade barriers benefit consumers, workers (export-related jobs, for example, pay more on average), and businesses of all types and sizes, including U.S. high-tech and IP industries, see expanded market opportunities. Being pro-free trade very much is being pro-growth.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.