January 25, 2011

Wyden: Calls on President to Start Different Conversation on Trade

Opportunities Exist to Prepare American Businesses and Workers to Thrive in Face of Global Competition

Washington, D.C. – Recognizing the unique opportunity President Obama has to highlight the importance of global competitiveness, U.S. Senator Ron Wyden (D-Ore.), chairman of the Senate Finance Committee’s Subcommittee on International Trade, Customs and Global Competitiveness, said he hopes that the president will use the State of the Union address to begin a candid dialogue about trade agreements.

 “The President has an opportunity tonight to speak candidly about the value of international trade and commerce,” said Wyden, the Chairman of the Senate Finance Committee’s Subcommittee on Trade, Customs and Global Competitiveness. “Essential to that conversation is a renewed effort to ensure that increased trade produces more tangible benefits for the middle class.”

Wyden requested technical assistance from the staff of the International Trade Commission on the pending U.S.-Korea Free Trade Agreement that shows the gains to U.S. GDP could be more than twice as much as previously estimated by that independent agency. The updated assessment offers state and sector specific information and estimates the job impacts of the agreement could create about 280,000 new American jobs. However, the assessment also shows that while employment in all states will likely increase, employment in some sectors like manufacturing in some states could decline.  Wyden used the data to underscore his belief that “Congress can’t simply ignore the fact that trade agreements can impact Americans jobs and take a toll on our hard-working middle class.  If American wants the benefits of expanded trade, we need to recognize and respond to its potential costs.”

To read the report click here.

Senator Wyden made the following statement a part of the Congressional Record:

Tonight’s State of the Union address is a unique opportunity for the President to speak directly to the American people and offer his course for the country. The President is promoting trade as part of his agenda and I commend him for highlighting global competitiveness as an economic imperative. With the upcoming debate on the US-Korea Free Trade Agreement, the President has an opportunity to speak candidly with the American people about the benefits and challenges posed by trade. Doing this supports the case that the United States needs new policies to rise to the challenges of a global economy.  

In order to avoid  a divisive, ugly fight over trade I would like to hear the President say in his speech that he will seek to establish a new compact between workers, business and government about how to increase our competitiveness in the global economy. It is important to try and reach this consensus before Congress is asked to consider the controversial Free Trade Agreements (FTAs) reached with Korea, Colombia, and Panama.

The President has already begun down this path by ramping up efforts to combat unfair trade practices and establishing the National Export Initiative with the goal of doubling exports over the next five years. These are both important strategies.  In approaching the pending FTAs, it is vital that he talk about more than just exports, he must also highlight the value of imports, two-way trade, and the global supply chain.

This can only be done through candid conversation, one the nation richly deserves.  If our debate draws only from the same talking points that both sides have been using for the last twenty years, the truth will be sidelined as proponents oversell the potential merits of the agreements and opponents oversell the potential pitfalls. That would be a disservice to the country and represent a profound missed opportunity for the President.

Take the pending trade agreement with Korea as an example. This is the most economically meaningful FTA since NAFTA. To help understand the impact of this agreement I sought the help of the staff of the independent International Trade Commission (ITC). In 2007, the ITC found that the agreement would have a limited impact on job creation, partly because of the assumptions the ITC made in its analysis. Because the economic landscape in 2010 is profoundly different than it was in 2007, I asked staff of the ITC to provide an updated assessment of the agreement using conditions that reflect today’s economic reality. Based on these updated results, the FTA has the potential to create about 280,000 new American jobs and boost U.S. economic output by $27 billion each year.

At the same time these projections show that thousands of Americans currently employed in manufacturing could lose their jobs.  Neither the President nor Congress can ignore these families and it is our job to enlarge what I call the “Winners’ Circle” to ensure that trade is a benefit to Americans in all our communities.

When American firms and their workers are as competitive as they can be, they can better tap foreign markets opened by trade agreements to spur the domestic economy and produce more good-paying jobs here at home. The Department of Labor’s chief economist recently testified that jobs related to international trade typically pay more and offer better benefits. However, when I talk with leading CEOs and labor economists, I hear the same concern: If we want our economy to grow at its full potential we need more workers with the tools to compete.

In tonight’s speech I would like to hear the President talk about proposals that will  guarantee workers’ career-long, affordable access to continuing education and skills upgrading so that businesses always have the most productive and trained workforce they need. We expand the Winners Circle by making it easier for workers to move from one job or career to the next and by making America the most attractive place to work and live for anyone that has the skills, the brains, and the ambition to succeed. Making it easier for companies with obsolete technology retool to meet 21st Century global competition further expands the Winners Circle. This means a tax system that rewards the global growth of American firms while fostering investment in production and employment here at home.

In the coming months, President Obama has an opportunity to forge a new, bipartisan consensus about trade and increasing foreign competitiveness. If he succeeds at this, not only does he succeed in passing these trade agreements, but far more importantly he equips Americas workers and businesses to drive the economy forward.