Increasing global investment, growing American jobs

As we in Congress work to enact a federal budget, families across the country face budgetary realities every day.  Stagnant wages and rising costs of living are squeezing household budgets to their limits.  In many communities, new jobs are scarce for those looking. It has been the slowest economic recovery in our lifetime. 

It is critical that we work together in order to make the changes needed to strengthen and grow our economy.  We need to do more to encourage job creation, which will put more Americans back to work and revive our sluggish economy.  

{mosads}An easy way to grow American jobs is through a robust trade policy agenda – specifically, Congress must approve both the Trans-Pacific Partnership (TPP) with Asia and the Trans-Atlantic Trade and Investment Partnership (T-TIP) with Europe.  The first step in that process is Congressional approval of fast-track negotiating authority, called Trade Promotion Authority (TPA). 

These proposed trade partnerships are critical to upholding America’s role within the global economy.  For decades, America was the top recipient of foreign direct investment (FDI) – the term used to describe whenever a foreign company like Honda, BASF, Novo Nordisk or Nestle decides to establish operations in the United States.  Now more than ever, global companies have options on where to invest, and many are choosing to create jobs in countries other than the United States.  Last year, China became the largest recipient of FDI, pushing the United States to the third position, behind Hong Kong. 

Foreign companies employ more than 5.8 million Americans, pay 33 percent higher wages than the economy-wide average and support 18 percent of America’s manufacturing jobs.  Most importantly, 90 percent of all global investment that flows into the United States comes from T-TIP- and TPP-based companies.  Approving TPA so that we can finalize these two agreements could significantly benefit our economy by increasing global investment in America. 

According to research recently published by the Organization for International Investment, if both agreements were implemented, more than 1.4 million new American jobs would be created as a result of increased global investment.  The trade partnerships would spur a direct impact of more than 400,000 new jobs at T-TIP- and TPP-based companies operating in the United States.  The industry getting the biggest job boost would be the manufacturing sector, followed by the wholesale and retail trade sector, and the professional and business services sector. 

More than 455,000 additional jobs would be created at U.S. companies that are suppliers to these FDI companies.  As global companies establish and grow their American presence, their purchases from U.S. suppliers will also expand, causing those suppliers to hire more American workers to meet the increased demand.  The professional and business services sector, manufacturing and other services industries would see the largest job gains. 

In addition, nearly 575,000 additional jobs would be created when U.S. workers hired by global employers and U.S. suppliers spend their income in local communities across the country.  These sectors include education and health services, wholesale and retail trade and leisure and hospitality industries. 

A common misunderstanding about trade is its relationship with job creation.  Some ask:  Why should international trade be a priority when so many Americans here at home are struggling to find work?  The answer is simple – T-TIP and TPP will not only open markets for U.S. made goods, they will encourage global investors to create jobs in America. 

In my home state, global investment already plays an important role in the economy, employing 224,000 Ohioans. That’s about five percent of the private sector workforce. More than 1,000 foreign companies that insource jobs in the U.S., have a presence in Ohio, playing a vital role in our state’s economy. 

Passing TPA and approving T-TIP and TPP will do even more to strengthen the economy in our states, and across the nation.  Implementation of the T-TIP and TPP trade agreements will trigger a surge of increased foreign direct investment in the U.S. economy.  

Passing TPA and strong, balanced trade agreements is crucial to America’s future economic well-being – we need to ensure that the United States remains a global force in the world’s economy.  Congress should act quickly to create opportunities for hardworking Americans.

Tiberi has represented Ohio’s 12^th Congressional District since 2001. He is chairman of the Ways and Means Committee’s Subcommittee on Trade.