why we need fairer trade

Why We Need Fairer Trade:

How Export Barriers Cost America Jobs

February 2011

Price of a Harley-Davidson

“Fat Boy”

United States $17,000

Indonesia $50,000

Why?

Price of a Harley-Davidson

“Fat Boy”

United States $17,000

Indonesia $50,000

Why? Trade Barriers

Price of a Harley-Davidson

“Fat Boy”

American Consumers

American Consumers

$13 Trillion Lost Wealth $400 Billion Less Annual Spending

American Consumers

$13 Trillion Lost Wealth $400 Billion Less Annual Spending

U.S. consumers alone can’t drive growth.

Foreign Consumers

80 million New Middle Class

consumers per year

Foreign Consumers

80 million New Middle Class

consumers per year

2 billion New Middle Class

consumers by 2030

America’s Strengths: More Exports

World’s Largest Manufacturer

World’s Largest Services Exporter

Agriculture Powerhouse

Iconic Global Brands

Open Economy- Benefits consumers- Competitive companies

The Obstacles

Foreign Consumers

American Productsand Services

Technical Barriers

Farm Barriers

Tariffs & Taxes

Red Tape

Limits on Services

Piracy

Corruption

National Champs

Trade Barriers

1. Technical BarriersFrench

Lawnmower skirts

Trade Barriers

2. Unfair Standards for Farm & Food Exports

100% Rice Testing in

Japan

1. Technical BarriersFrench

Lawnmower skirts

Trade Barriers

2. Unfair Standards for Farm & Food Exports

100% Rice Testing in

Japan

1. Technical BarriersFrench

Lawnmower skirts

3. Prohibitive Tariffs & Taxes

160% Taxes and Duties

Trade Barriers

4. Red Tape at Customs “Papers Please!”

Trade Barriers

4. Red Tape at Customs “Papers Please!”

5. Arbitrary Limits on Services

Absolutely, positively grounded

Trade Barriers

4. Red Tape at Customs “Papers Please!”

5. Arbitrary Limits on Services

Absolutely, positively grounded

6. Piracy, Counterfeiting and Forgery

A “Sonkiss” orange anyone?

Trade Barriers

7. Rigged Bids and Corruption

Thumbs on the scale;

hands on the take

Trade Barriers

8. National ChampionsRocky vs.

Drago… but Drago wins.

7. Rigged Bids and Corruption

Thumbs on the scale;

hands on the take

The Bottom Line for U.S.

Export Product Foreign Market(s)Exports Blocked by

Trade Barriers

Soup Japan, India $200 million

Grapes 11 countries $100 million

Pork 30 countries $900 million

Apples India $100 million

Music Russia $2.7 billion

The Cost of Trade Barriers

$1 Billion in Exports Supports 6,000 U.S. Jobs

STEP 2:

STEP 3:

STEP 1:

How America Fights Back

Support for Trade Enforcement

Recognize that Trade Deals Work

Get in the Game

What We Have:

• Dedicated trade enforcement and trade promotion officials

What We Need:

• More people and resources

• More aggressive enforcement of current agreements

• Identify and prioritize current trade barriers

STEP #1

Support for Trade Enforcement

Trade Agreement

Change in U.S. Exports

Change in U.S. Imports

Australia (2004 – 2008) +59% +41

Bahrain (2006 –2009) +48% -29%

CAFTA-DR (2005 – 2008) +50% +7%

Chile (2003 – 2008) +341% +122%

Morocco (2005 – 2008) +199% +97%

Singapore (2003 – 2008) +68% +5%

STEP #2

Recognize That Trade Deals Work

Source: U.S. Commerce Department

Trade Agreement Success

Peru FTA – America has replaced Argentina as Peru’s top farm supplier

NAFTA – Caterpillar Inc.’s exports to Canada are up

by 300% and up by 473% to Mexico.

– Dippin’ Dots has 106 new Mexican locations

Chile FTA – Exports from Mississippi to Chile are up

833% from 2004-09.

STEP #3

Get in the Global Race for Trade Deals

China

EU

India

Korea

Japan

U.S.

Proposed New Trade Deals0 5 10 15 20 25

STEP #3

Get in the Global Race for Trade Deals

China

EU

India

Korea

Japan

U.S.

Proposed New Trade Deals0 5 10 15 20 25

STEP #3

Get in the Global Race for Trade Deals

China

EU

India

Korea

Japan

U.S.

Proposed New Trade Deals0 5 10 15 20 25

Now

EU 17%

The Consequences of U.S. Inaction

Trade Agreements(Percent of World GDP)

US 17%

EU 50%

The Consequences of U.S. Inaction

Trade Agreements(Percent of World GDP)

US 17%

The Future?

The Consequences of U.S. Inaction

Soup Prices for Korean Consumers

$5.36 $5.36 Now

The Future?

The Consequences of U.S. Inaction

Soup Prices for Korean Consumers

$4.12 $5.36

S A L E

““If America sits on the sidelines while other

nations sign trade deals, we will lose the chance to create jobs on our shores.

— President Obama to the Business Roundtable

February 24, 2010