Trade Agreements Offer Benefits for U.S. Employers and Employees
The following op-ed was authored by Tom Linebarger, Chairman and CEO of Cummins Inc. and Chair of the Business Roundtable International Engagement Committee; and Mike Bertsche, the President & CEO of Camcraft.
After years of negotiations, the 12-nation trade deal known as the Trans-Pacific Partnership is facing its toughest challenge yet: election-year politics.
The fact is, TPP and U.S. trade agreements overall, offer tremendous benefits for U.S. employers and employees alike. Consider a few numbers: trade-related jobs grew 3.1 times faster than overall employment between 2004 and 2014, and nearly half of all U.S. goods exports to the world in 2014 went to just the 20 countries that the United States has free trade agreements with.
Unfortunately, the facts are being distorted by rhetoric on the presidential campaign trail, with candidates alleging that U.S. trade agreements like NAFTA have suppressed wages and cost American jobs. In fact, U.S. trade with NAFTA partners Canada and Mexico supports nearly 14 million U.S. jobs, according to a U.S. Chamber of Commerce study.
Moreover, contrary to the campaign rhetoric, U.S. jobs tied to trade also pay more than other jobs. According to a report by the Commerce Department, manufacturing jobs pay 18% more on average when tied to exports. The report also notes that foreign tariffs — like those TPP will eliminate — reduce the earnings of U.S. workers by as much as 12%.
We have to put politics aside and recognize TPP as an opportunity to support U.S. economic growth and high-quality American jobs.
The agreement will create opportunities to sell more U.S. goods and services to 11 Asia-Pacific countries. This region is already critical to America’s exports: TPP nations accounted for some 45% of all U.S. exported goods in 2014.
All told, TPP will eliminate more than 18,000 foreign tariffs on U.S. goods, opening markets to U.S. export growth. And because five TPP countries currently lack trade agreements with the United States, the deal will also open entirely new markets for American firms.
Just as important, the trade pact will put in place strong, enforceable rules for fair trade that actually improve on NAFTA and other past U.S. trade agreements. TPP is the first modern trade agreement that addresses the realities of our interconnected global marketplace. For example, it will establish intellectual property protections for American companies and inventors and raise foreign labor and environmental standards. It also will discourage other countries from using government procurement and state-owned companies to put American firms and workers at a disadvantage.
In short, TPP will open access to millions of customers for U.S. goods and services while boosting foreign investment throughout the United States. The resulting U.S. exports and international investment here will expand U.S. economic growth and jobs.
To understand how trade supports companies of all sizes, consider the relationship between our two companies. Headquartered in Columbus, Indiana, Cummins’ 25,000 U.S. employees design, manufacture and distribute engines and related products that are powered by diesel and natural gas. In 2014, we exported approximately $3 billion in U.S.-made products.
These foreign sales don’t just benefit Cummins and its U.S. employees; they also help our 2,500 domestic suppliers, such as Camcraft. Camcraft is a small company based in Illinois. Its 330 employees manufacture high-precision components used in Cummins engines.
As leaders of manufacturing companies large and small, we know how important trade and U.S. trade agreements like TPP are to the success of our companies and to businesses and farms across the United States.
The relationship between our two companies shows how exports ripple through the U.S. economy in a supply chain generating billions of dollars in revenue and thousands of jobs.
Previous U.S. trade pacts offer evidence: America’s current trade partners purchase 13 times as many U.S. goods per capita than countries with which we don’t have trade agreements. Those purchases support U.S. jobs.
When Congress takes up TPP, members should look beyond the divisive campaign rhetoric and seize the opportunity to support growth and jobs in their home states. By approving TPP this year, Congress will enable American workers, businesses and farmers to sell more in international markets — reaping the benefits before our foreign competitors do.
Editor's Note: The op-ed above also appeared in the following publications
The Indianapolis Star - Trans-Pacific Partnership is good for U.S. workers
The New York Daily News - TPP is good for American manufacturers and the people they employ
The Post and Courier - Election Rhetoric Sells Trade Agreements Short