why we need fairer trade
DESCRIPTION
This is a presentation by Ed Gerwin, Senior Fellow for Trade and Global Economic Policy at Third Way.TRANSCRIPT
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
