“No matter what one thinks about the merits of any particular free trade agreement, we should all be able to agree that increasing U.S. exports will lead to the creation of more jobs here at home…And one important step we can take to increase exports is to improve the effectiveness of the federal government’s export promotion programs,” – Congressman Howard L. Berman
Washington, DC – Congressman Howard L. Berman, Ranking Democrat on the House Foreign Affairs Committee, delivered the following opening statement at today’s committee briefing entitled “Job Creation Made Easy: The Colombia, Panama and South Korea Free Trade Agreements”:
Madam Chairman, thank you for calling this important hearing.
The Foreign Affairs Committee does not have legislative jurisdiction over free trade agreements. But there is precedent for this committee reviewing pending trade agreements. We held hearings on both the North American Free Trade Agreement and on the Uruguay Round talks that resulted in establishment of the World Trade Organization. Now that the Senate has passed Trade Adjustment Assistance legislation, the President is likely to send Congress the Korea, Colombia and Panama agreements. This may be the last hearing on those agreements before they come up for a vote in the House.
Today, the conventional wisdom about trade agreements is much different than it was when the Uruguay Round and NAFTA were considered. The optimism of the 1990’s about the benefits to America of reducing trade barriers has been replaced by widespread skepticism, not just about trade but also about the future of our economy and our workforce. We have seen persistent trade deficits, which have compounded our fiscal problems. We have seen U.S. companies move manufacturing overseas, eliminating jobs for American workers in the process, and affecting America’s competitive edge by sending some of our best technology abroad. We have seen household incomes fall behind price increases and we have seen a once-secure private pension system erode.
A number of factors have caused this sea-change. Productivity increases have reduced the labor component of both manufacturing and services. The Internet has profoundly affected manufacturing, finance and services by fostering a much more difficult competitive environment for the U.S. The entry of China, India and other low-cost competitors into world markets has transformed trade patterns, with consequent effects on the U.S. economy and workforce.
While the dollar value of U.S. exports has continued to rise almost every year, the U.S. share of global trade flows has gone down. From 2003 to 2009, the U.S. share of world exports dropped from 9.8 percent to 8.7 percent. Over the same period, the U.S. slipped from first place in world exports to third, behind Germany and China. Today, exports account for just over 13 percent of the total U.S. economic output, far less than virtually every other major economic power.
Trade agreements, per se, are by no means the cause of all our economic problems. Nor are they a panacea for our current woes. They are a critical tool for the protection of American intellectual property rights. But they can also contribute to the dislocation of American workers.
No matter what one thinks about the merits of any particular free trade agreement, we should all be able to agree that increasing U.S. exports will lead to the creation of more jobs here at home.
And one important step we can take to increase exports is to improve the effectiveness of the federal government’s export promotion programs. A series of Government Accountability Office (GAO) studies has found that existing U.S. programs are un-coordinated, un-focused and therefore less effective than those of our competitors. This past Monday, a report by the Council on Foreign Relations issued the same finding and urged a more robust U.S. effort.
Specifically, the Council noted, and I quote: “The U.S. has been a laggard in export promotion efforts. The government needs to play a more active role in assessing foreign market opportunities, identifying priorities among products and services, and carrying out a long-term plan to bolster U.S. performance in world markets.”
For more than a year, I have been working on legislation to address this problem. On Wednesday, I introduced two bills to help ensure better coordination of the 18 existing programs and their combined $1.3 billion budget. Madam Chairman. I believe that these bills will garner bi-partisan support – and I thank Mr. Manzullo for cosponsoring one of them. Unlike the pending free trade agreements, they are within the jurisdiction of this committee and I hope that we can consider them as we examine ways to create new jobs for American workers.