The Week Just Past: Opening Overseas Markets = U.S. Jobs
"After years of delay, President Obama sent to Congress Monday three important free trade agreements that will help American manufacturers compete and win in global markets. By this time next week, I hope the House will have passed the agreements with Colombia, South Korea and Panama.
"Why is this important? Because opening overseas markets to more U.S. exports will help our economy here at home and create new American jobs. These FTAs alone will generate up to 250,000 U.S. jobs, including thousands in New Jersey. Hundreds of these jobs will be found at our Port of New York and New Jersey and businesses in our region that support the port, including small and mid-sized businesses.
"The most recent economic data shows that over 16,000 companies export goods from New Jersey locations. 15,021 of New Jersey exporting firms were small or medium-sized businesses with fewer than 500 employees. These firms generated over two-fifths (42.5 percent) of New Jersey's total exports of merchandise in 2008.
"Overall, FTAs benefit our businesses. Foreign goods already enjoy lower tariffs when imported INTO the U.S. These FTAs will lower tariffs for American goods imported INTO these foreign markets. As a result, our exports will expand. For example, since the U.S.-Chile trade agreement took effect in 2004, New Jersey's exports to Chile have grown by 280 percent!
"Time is of the essence. While these three agreements languished, our foreign competitors were stepping into the breach left by our inaction. The European Union-Korea Free Trade Agreement and the Canada-Colombia FTA entered into force on July 1 and August 15, giving their businesses a notable advantage over ours. In fact, a recent U.S. Chamber study warned that delays on the pending trade agreements have put 380,000 American jobs at risk.
"As we stand on the sideline, our economic dominance is being eroded and we are losing market share. Translated: we are losing jobs!
"It's past time to approve agreements with Colombia, South Korea and Panama and then redouble our efforts to open additional overseas markets to American-made products."
Free Trade Agreement Facts: Korea, Colombia and Panama
ØKorea is the 15th largest economy in the world, America's 7th largest trading partner and 8th largest export market.
ØPassing the U.S.-Korea FTA will boost U.S. goods exports by over $10 billion and U.S. Gross Domestic Product (GDP) by up to $12 billion, according to the U.S. International Trade Commission (USITC).
ØFull implementation of the Korea trade agreement is projected to generate 8,761 jobs in New Jersey, according to the USITC.
ØKorean majority-owned affiliates in the United States employed 27,400 Americans at an average wage of $73,066 in 2008.
ØTrade and investment between the United States and Korea support tens of thousands of American jobs across the manufacturing agricultural, and services sectors. This agreement will help expand American jobs across every sector of the economy by increasing U.S. exports and drawing new investment into the United States.
ØKorea is a huge market for U.S. small and medium-size enterprises, which made up 89 % of U.S. businesses exporting to Korea in 2007 and accounted for $18 billion in U.S. exports to Korea.
ØU.S. exports to Korea currently face an average tariff of 12.2 % (49 % for agricultural products and 6.6 % for nonagricultural products), which is far higher than the United States imposes.
ØThe agreement removes significant market access barriers in Korea to U.S. goods, services, and investment. It includes strong provisions on transparency, intellectual property rights, competition, and other rules, particularly in the services sector, that would make U.S. businesses competitive in Korea.
ØFrom a global perspective, the agreement is critical for U.S. businesses attempting to get a foothold in Southeast Asia and the region.
ØKorea is a close U.S. ally and a strong partner in advancing global security and in fighting economic isolationism. Implementing the FTA will strengthen the strategic partnership by deepening the links between our two countries as we work together to promote shared goals and values around the world.
ØColombia currently collects $100 in tariffs on U.S. exports for every $1 the United States levies on Colombian goods.
ØOver $3.84 billion in tariffs have been levied by Colombia on American exports since this FTA was signed in 2007.
ØA fast-growing market of 45 million consumers, Colombia purchases more U.S. products than does Russia, Spain, Indonesia or Thailand. But as Colombia implements trade agreements with our competitors, implementing our Colombia FTA becomes crucial to maintaining U.S. market share in this important market.
ØThe impact of eliminating tariffs and related barriers in Colombia is estimated to increase U.S. GDP by nearly $2.5 billion and U.S. goods exports by $1.1 billion.
ØThe agreement will provide significant new access to Colombia's $134 billion services market, creating new opportunities for New Jersey service providers.
ØNew Jersey companies exported an average of $161 million in goods to Colombia between 2008 and 2010.
ØColombia is a key ally in the war on drugs. They have also remained an ally as Venezuela has risen in power and competed for regional influence.
ØNinety-eight percent of Panama's exports to the U.S. received duty-free treatment in 2010, yet fewer than 40 percent of U.S. exports entered Panama duty-free.
ØWith the Panama TPA in place, 87 percent of U.S. goods will enter Panama duty-free immediately.
ØNearly all products in key sectors such as computers and IT equipment and agricultural and construction products will gain instant duty-free access to Panama under the TPA.
ØThe TPA will provide substantial access to Panama's important services market.
ØNew Jersey companies an average of $89 million to Panama between 2008 and 2010.
For the Record: Who's Holding Up The President's Jobs Bill?
President Obama has been campaigning around the country, demanding that Congress pass his "American Jobs Act" immediately, "as is." On Tuesday, when Senate Republican Leader Mitch McConnell tried to bring the bill up for a debate and a vote, he was blocked by Senate Democratic Leader Harry Reid.
Maybe the President should take his campaign for his jobs bill to Harry Reid's home state of Nevada??
Lesson Learned:A jobs plan that pushes for more "stimulus" government spending (using borrowed money) and higher taxes is opposed by a bipartisan majority of Congress.
Small Business Confidence Continues to Plummet
According to a survey of more than 1,700 CEOs of small U.S. firms, the CEO networking group Vistage International reported this week that CEO confidence for the third quarter of 2011 fell to its lowest level in two years. According to the report, confidence in the economy has declined by 20 percent since the beginning of the year. Just 18 percent said the economy had improved this year, down from 37 percent in the previous quarter, while 39 percent said conditions were worse, the highest level since 2009. Forty percent of the Vistage CEOs said economic uncertainty is the most significant business issue they are facing.
Noted With Interest: Referring to Democrats and Republicans alike, Charles Schwab wrote in the Wall Street Journal: "They need to review every piece of existing legislation and regulation with a clear eye to what impact it will have on business and growth. If something is a job killer, put a moratorium on it. Stop adding to the litany of new laws and regulations until we've had time to digest those in place and regain some certainty about the future. Proposed laws and regulations should be put to a simple test: What will this do to encourage businesses and entrepreneurs to invest? What will it do for jobs?"