We’re Happy the President Mentioned Trade in the SOTU…But There’s Much More to be Done

Back in DC, the night of the State of the Union is sort of like “Wonk Super Bowl.” There are viewing parties, after parties and all sort of pre- and post-analysis. In this analogy, Representative Cathy McMorris Rodgers’ post-speech response is sort of like Michael Strahan’s breakdown of Russell Wilson’s game plan (Go Hawks!)… or so my boss Eric tells me, since I don’t know much about football!

Much like Seahawks fans everywhere post-Super Bowl, there was much rejoicing during the State of the Union address by trade policy wonks when President Obama announced his commitment to passing Trade Promotion Authority (TPA) and finalizing the Transatlantic Trade and Investment Partnership (TTIP) and Trans-Pacific Partnership (TPP) as a way to create U.S. jobs. His exact quote was this:

“Let’s do more to help the entrepreneurs and small business owners who create most new jobs in America. Over the past five years, my administration has made more loans to small business owners than any other. And when ninety-eight percent of our exporters are small businesses, new trade partnerships with Europe and the Asia-Pacific will help them create more jobs. We need to work together on tools like bipartisan trade promotion authority to protect our workers, protect our environment, and open new markets to new goods stamped “Made in the USA.” China and Europe aren’t standing on the sidelines. Neither should we.

WCIT is very pleased to hear the President assert his focus on TPA and the free trade agreements that would create so many jobs in Washington state. However, I can’t help but feel that President Obama’s remarks on trade continue to present an inaccurate picture of the way the global economy works and are not really pro-trade, but pro-exports. WCIT President Eric Schinfeld has made similar points after the State of the Union address last year and the year before, so it is a bit disappointing that the President’s remarks on trade are not becoming more sophisticated. (Doesn’t he read the State of Trade Blog immediately after his speech to get feedback?)

Let me explain. President Obama has said in the last three SOTU’s that we need to reward the companies creating jobs in America, and he frequently mentions opening new markets to “made in USA” products. All of which are great things, of course. But he fails to mention that trade is a two-way street, and the strength of our economy depends on imports as well as exports. In Washington state, at least 25 percent of the jobs that are tied to trade are reliant on imports; our manufacturing and retail companies could not stay competitive if they did not leverage supply chains around the world. The success of these companies leads to growth of high-skill, high-wage jobs in our state. It’s impossible to ignore that most of the “made in USA” products that we export contain imported components; in fact, 55 percent of U.S. imports are inputs for American manufacturing or other value-added activities. Thus, it’s critical for the President to communicate that the 21st century economy is more global than ever before, and it’s important to grow our economy through free trade, not just from U.S. exports.

And while the President did mention Trade Promotion Authority, I wish he had spent some time to explain that TPA is the tool that will allow increased transparency and Congressional oversight of trade negotiations, enabling Congress to play a major role in crafting the highest standard agreements that will benefit the United States. This may have helped dispel myths about TPA that are currently spreading in Congress and the media.

WCIT hopes that the President will stand behind his remarks and aggressively pursue TPA passage as soon as possible. Unfortunately he has his work cut out for him, as Senate Majority Leader Harry Reid announced last Wednesday that he will not bring TPA to the Senate floor any time soon, and misinformation about TPA has led to push-back from both Democrats and Republicans.

So even with the President’s brief mentions of TPA, TPP and TTIP in the SOTU, it’s clear that we will have to put our shoulder to the wheel in 2014 to increase awareness among elected officials and the public about how important trade is to Washington employers and residents.

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