Weeks of heart-stopping twists and turns in the debate over international trade agreements finally appear to have ended in Washington with a big boost for international commerce.
Yesterday, the U.S. Senate agreed on a bill to give the president "Fast-Track" authority for international trade deals. The House of Representatives had already approved the bill. Also called "Trade Promotion Authority," or TPA, this legislation gives the president the power to ask Congress for a simple Yes or No vote when US-negotiated international trade agreements are presented for approval. No amendments or filibusters are permitted.
The measure brings the United States a big step closer to concluding negotiations for the TPP, or Trans-Pacific Partnership, which involves 12 Pacific Rim countries representing 40 percent of the world's economic output. With China's influence expanding significantly, the U.S. and its longtime strategic partners in the Asia-Pacific region are seeking to finalize the deal promptly.
Meanwhile, the US is negotiating another large trade deal called TTIP, or Transatlantic Trade & Investment Partnership, with the European Union, although those negotiations will not conclude for several years.
Why does trade matter?
We live in a global world. For centuries, Massachusetts companies have manufactured products and sold them in global markets. In the next decade, millions of people in Latin America, Asia, Africa and the Middle East will enter the middle class. Families from these emerging economies are purchasing consumer goods, paying for health care, and opening bank accounts.
The rising demand for US-made products and services gives Massachusetts companies an excellent opportunity to increase exports and expand jobs at home. Bay State firms producing semiconductors, plastic containers, molding equipment, medical devices, software, pharmaceuticals, foodstuffs and financial services are already benefiting from globalization, and the trend is expected to continue.
Trade agreements remove economic barriers. The US currently maintains 20 such agreements with countries as varied as Morocco, Australia, Israel and Singapore, in addition to the North American Free Trade Agreement (NAFTA) with Canada and Mexico.
Making trade easier involves lowering or eliminating tariffs, streamlining regulations, standardizing testing and labeling requirements, easing restrictions, protecting intellectual property and workers' rights, and ensuring environmental protection. All these issues are components of the two massive trade deals in which the US is engaged.
Massachusetts companies exported more than $27 billion in commodities to world markets last year. Exports are a key driver of the Massachusetts economy, and trade agreements such as the TPP and TTIP will benefit Massachusetts employers in a variety of industry sectors and ultimately lead to more international trade. This week's Trade Promotion Authority bill, which President Obama is expected to sign shortly, is an important step in furthering free and fair trade.