The Vietnamese furniture maker Vinh Long just announced plans to open a manufacturing plant in Morrilton. Although trade between the United States and Vietnam opened up in 1994, this is the very first time a Vietnamese company has established a manufacturing facility on American soil.
This is great news for Arkansas. Vinh Long will initially invest $5 million in this facility and immediately create 75 new jobs. Foreign investments like this boost local businesses and generate the employment opportunities needed to finally bring down our joblessness rate, which is still stubbornly stuck near 7.5 percent.
We need to further Arkansas engagement with the global economy. But we can't do it on our own. Federal officials are largely responsible for negotiating trade pacts. They need to take the steps necessary to expedite the creation of new agreements and update the channels of global commerce. And they can start by re-instating Trade Promotion Authority.
TPA strengthens the trade negotiating process and makes it much easier for national negotiators to hammer down new deals. Since the days of FDR, American presidents from both parties have been granted this power by Congress.
But TPA lapsed in 2007 and lawmakers have yet to renew it.
They should re-instate TPA - as soon as possible. Doing so would help get the struggling Arkansas economy back on its feet. Trade has a proven record of job creation and economic growth. Indeed, international trade currently supports more than 325,000 Arkansas jobs, from agriculture to professional services to manufacturing. In 2011, more than one in five Arkansas positions depended on international trade. That's more than double what it was 20 years ago.
Between 2004 and 2011, local trade-related employment grew nearly nine times faster than total employment. And Arkansas companies now export to 184 countries, from Canada to China. Exported goods account for 6.5 percent of our state gross domestic product. That's a lot of money being pumped into our economy.
What’s more, trade also brings down the cost of everyday products for Arkansas families. Thanks in part to growing world trade, the average cost of toys dropped by more than 40 percent between 2002 and 2012. And the average computer dropped in price by nearly 75 percent. That's real savings for everyday working families in Arkansas.
In total, economic growth from policies liberalizing international trade and investment boost the spending power for the average Arkansas family of four by about $10,000 a year. There's still a lot of room to grow. With the exception of some agricultural products, Arkansas lags the rest of the country when it comes to exported goods.
Meanwhile, there are many countries eager to seal new agreements with America. Negotiations are already underway to mint new pacts with 60 economies. New and modernized TPA would expedite these negotiations and quickly expand America's trade agreement framework. New agreements will translate into a huge uptick of commercial activity with our partner nations.
Indeed, exports to Chile expanded nearly 600 percent once we signed a free trade agreement with them. With Israel, the increase was nearly 500 percent. With Canada, 200 percent.
And that uptick in trade would directly translate into economic growth right here in Arkansas. Countries that already have commercial pacts with the United States purchase 10 times more goods per capita from Arkansas than those that don't. Arkansas-originated exports to free trade partners increased nearly 150 percent over the last decade. More than 40 percent of our merchandise exports went to these countries, totaling $3.6 billion worth of goods.
International trade already serves an essential purpose in the Arkansas economy. By renewing Trade Promotion Authority, Congress would dramatically increase the rate of new trade agreements, expand the markets available to Arkansas companies and - most importantly - boost job growth and investment throughout our state.