Legislation was introduced early this year to give President Obama trade promotion authority (TPA). This would allow the president to negotiate trade agreements with other countries that would then be submitted to Congress for an up-or-down vote with no amendments. The intent is to create freer trade, opening markets for U.S. producers and lowering prices for U.S. consumers.
Exports constitute more than 7 percent of Arizona's GDP. Arizona actually runs an international trade surplus . Nevertheless, Arizona's share of GDP in exports is far less than the nearly 14 percent share of GDP that exports constitute for the nation as a whole.
Still, the state's exports are on an upswing, reaching their highest levels since 2008. Last year, our exports to Mexico grew a whopping 12 percent.
Arizona's tech industry, our border with Mexico and our proximity to West Coast ports make international trade a vital part of the state's economy. Breaking down international trade barriers is crucial if we hope to continue to benefit from this activity.
Growing U.S. trade relationships is especially important in states like Arizona that have strong export markets. International trade supports tens of thousands of jobs in our state.
In a state still struggling with unemployment over 7 percent, we cannot afford to let our trade with other nations slide. New agreements, negotiated and enforced at the national level, are vital to continuing this upward trend.
Arizona's economy, like any modern economy, is founded on trade. Our biggest trading partners are actually other states. But for Arizona to thrive in a modern, high-tech world, at least some of the resources that we turn into products and sell to other Americans will have to come from other nations through trade. Indeed, that's already the direction we are heading. According to a study by Trade Benefits America, between 2004 and 2011, a period with the deepest recession since the 1930s, trade-related employment grew four times faster than total employment in Arizona.
Increasing Arizona's foreign trade is about more than just exports. Our state also benefits from foreign investment and lower tariffs (another word for taxes) on imports as well. Between 2002 and 2012, the costs of personal computers and toys fell by 75 percent and 43 percent, respectively, partly due to foreign competition no longer blocked by trade restrictions. Foreign investment creates jobs, with foreign-owned companies employing more than 73,000 Arizonans.
The U.S. has free-trade agreements with 20 countries, but by passing accords currently under negotiation we could more than double that number. Many of these countries, such as Germany and Japan, are economic powerhouses with which freer trade would be immensely beneficial.
TPA lapsed in 2007. If Congress renews it now, it would likely help to finalize pending trade agreements with Asian, European, and Central and South American countries. These agreements would modernize our trading relationships and help develop markets for American exports.
TPA is nothing new, having existed since the Franklin D. Roosevelt administration and having been a regular feature of Republican and Democratic administrations. It is simply a process to accelerate developing trade agreements through an expedited decision-making process between Congress and the president. Congress has a chance to review pending agreements to make sure they are beneficial.
With the U.S. economy and job creation still growing timidly, we need to do all we can to support American employment, create markets and lower costs to consumers. International trade is among the most vibrant and booming parts of Arizona's economy. TPA and a renewed commitment to free trade can help this state's economy grow and put Arizonans back to work.