Trade and Competitiveness: Investing in Our Country to Compete in the Global Economy | Commentary
The United States is negotiating a Trans- Pacific Partnership trade agreement with 11 other countries on four continents that border the Pacific Ocean. The 12 countries are all members of the Asia-Pacific Economic Cooperation, a regional economic forum that supports sustainable economic growth and prosperity in the Asia- Pacific region, and they include the world’s largest and third largest economies, emerging economies and a command economy. Together, they represent 40 percent of world gross domestic product and 11 percent of the world’s population.
The negotiators are not just agreeing to eliminate tariffs at the border. They are also writing new and better rules to set environmental standards, internationally recognized labor standards and new standards on how state-owned enterprises behave in the marketplace.
Congress is now debating whether to give the president an up-or-down vote on the TPP agreement, once the negotiations are complete. In principle, there is a good argument for that. The Constitution bestows on Congress the power to impose tariffs and regulate international trade. But 535 members of Congress cannot negotiate a trade agreement such as the TPP on behalf of the United States.
A key focus of that debate is on whether the TPP will create or destroy jobs, and whether it will raise or lower incomes for the middle class.
There is a popular perception trade has led to lost jobs in the past few decades. And, according to the Commission on Inclusive Prosperity, across the advanced economies, income being generated is increasingly being distributed unequally. Although economists disagree over how much of our growing income inequality can be attributed to trade (some argue it is as high as 40 to 60 percent, while others estimate it is more along the lines of 10 percent to 20 percent), no one can responsibly deny that trade has had a role to play.
In my view, trade agreements such as the TPP can create jobs and raise middle-class incomes — but only if two conditions are met. First, the substance of the trade agreement matters. We need to insist countries stop manipulating their currencies to gain an unfair advantage over our exporters, for example. And we need to be sure countries such as Mexico don’t use poor labor practices as a way to compete against us.
The second condition — U.S. competitiveness — is and will continue to be my central focus as Congress moves forward with the trade agenda. We need to be prepared for the increase in competition that will come with opening up more to trade. We need to identify new opportunities to export our goods and services overseas. And we must provide our young people with the training, education and skills to be able to produce those goods and services and to compete against imports. How will we support the trade in the new economic reality with a crumbling infrastructure? It doesn’t take a trade expert to be able to understand we need modern ports and airports, tar and asphalt highways as well as information super highways to reap the benefits of that trade.
Our public investments in things such as roads and schools is lower today than it ever has been in the past 50 years — about 10 percent of what we invested in the 1960s. Take transportation. The United States spends just 1.6 percent of our GDP on transportation infrastructure, while the rest of the developed world spends, on average, more than 50 percent more than we do. Likewise, we spend just 0.1 percent of our GDP on worker training, whereas Germany spends eight times that much and Denmark spends 23 times that much. To compete in an increasingly global economy, the Commission on Inclusive Prosperity recommends increasing our public investment in infrastructure by $100 billion annually over the next 10 years.
We in Congress have the power to craft landmark education and training bills — but we lack bipartisan support for that initiative. We have the power to create a major infrastructure bill, but no one has taken one up. When we contemplate a future with a TPP in place, our efforts on education and on infrastructure are what will make the difference between whether we are winners or losers as a result of this deal.
Now, some may say that these types of bills are not “germane” to a trade bill. But the parliamentarians should not be the ones who guide the destiny of our country. I am confident that if the president and the leadership in the House and Senate commit to a creating a package for the TPP that includes infrastructure, education, and training, we can and should get this trade agreement done. I will be working in the coming weeks and months to help get us on that path.
Rep. Charles B. Rangel, D-N.Y., is serving his 23rd term in Congress and is currently the top Democrat on the House Ways and Means Subcommittee on Trade.