Boosting America — and creating jobs— through free trade

Even as the Joint Select Committee works towards its November deadline to help put America’s fiscal house in order, I know that our efforts to right the American economy cannot end there.

Creating jobs requires more than simply changing tax and spending policy. It demands that we redouble America’s focus on exporting to the world’s fastest-growing economies to ensure that American workers and companies grow along with them.

{mosads}Yesterday, we took a significant step forward by approving free-trade agreements with South Korea, Colombia and Panama. But we must do more. We need far greater access to markets in countries like India and Brazil — and particularly China, the country at the center of the tectonic shift in the global economy. These economies will see growth in their middle classes in the coming decades that will dwarf the expansions in other countries. Already, India’s middle class is as big as the total population of the United States, and within a generation China’s middle class is expected to grow to four times the size of ours, creating millions of new global consumers.

As those consumers spend, they should create jobs here in America. The Commerce Department estimates that every $1 billion of exports supports more than 5,000 jobs, but first we need freer access to those markets.

There is no lack of demand for American goods and services — from Cadillac to Disney to Coca-Cola, American brands are loved, trusted and in high demand worldwide. Our total exports to the world rose 21 percent in 2010. And in good news for an industry getting back on its feet, more than 1.5 million new American cars were exported last year, up 38 percent from 2009. 

But some governments disadvantage our goods and services or shut them out altogether. In China, for example, the government actively promotes “indigenous” brands while failing to enforce intellectual property laws, meaning that billions of dollars worth of American films and software are stolen. And the International Trade Commission has reported that “the elimination of Chinese tariffs and non-tariff measures could lead to an additional $3.9 billion to $5.2 billion in U.S. agricultural exports to China.” 

These unfair practices have to change — not simply because we deserve a level playing field, but because the health of our economy depends on it. In 2009, the United States consumed $378 billion in goods and services from around the world more than we sold to it. And export-oriented economies like China have relied on the American consumer’s 30-year buying binge to bring millions of their people out of poverty and put them to work. That is a stunning and much-admired accomplishment. But now the American credit card is maxed out. Others have to start spending, and we have to export more.

How do we get there? It starts by leading an effort to initiate a new round of multilateral trade negotiations with the goal of getting China, Brazil and India to remove trade barriers, helping these countries increase their consumption and allowing Europe and the United States to become bigger suppliers of goods and services. And, while fairly valuing currency is by no means a silver bullet, we and other countries must press the Chinese to allow the market to determine the value of their currency — which will in turn give their people the buying power to purchase more goods from us and others.

The primary multilateral tool for negotiating better access to markets, the decade-long Doha Round negotiations at the World Trade Organization, is unfortunately at a stalemate. Countries like China and India want us to cut further our tariffs on farm and manufactured goods without making any meaningful concessions in opening their markets. That is unacceptable, and no deal is better than a bad deal. If their strategy is to keep talking without negotiating, then we need to establish a separate forum for a discussion between nations truly willing to engage in mutually beneficial trade until the unwilling change their posture.

We need a new way forward. Although we should not abandon Doha, we can and should initiate negotiations with any country willing to reduce trade barriers in the sectors where we are most competitive, including environmental goods and the services sector. 

That kind of positive effort of like-minded countries, combined with our regional strategy to open up eight economies in Southeast Asia and Latin America through the Trans-Pacific Partnership Agreement, will isolate and pressure governments, like China’s, that have thus far refused to engage constructively. Either they will feel pressure to come to the table, or we can make progress with the countries that do.

We know America boasts the ingenuity to develop goods and services the world wants. It’s who we are — it’s in our DNA — and we deserve the right to compete for those customers. And ultimately it is in China’s, India’s and Brazil’s interests to have stronger economies in Europe and the United States because they need access to our customers and investors. The world awaits our leadership, and our economic future relies on it.

Kerry is chairman of the Senate Foreign Relations Committee.