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Op-ed: Congress must act to keep Utah’s exports moving

By Derek Monson

First Published Apr 11 2014 06:18 pm • Last Updated Apr 11 2014 06:18 pm

Quick, name the biggest drivers of Utah’s economic growth.

Did you guess exports? Probably not. But it’s right up there. Utah’s exports have nearly tripled in just five years, climbing from $6.8 billion in 2007 to $19.3 billion in 2012. Indeed, exports now support more than one in five Utah jobs.

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As welcome as this growth is, it’s not guaranteed to continue. In fact, Utah’s exports dipped last year. And they’re at risk of further declines if Congress fails to restore the president’s authority to negotiate new free trade deals by passing Trade Promotion Authority (TPA).

Free trade deals are arranged between two or more countries that agree to lower tariffs on imported goods, leveling the playing field and making it easier for companies in each country to exchange goods and services.

The results can be amazing. Utah’s exports to Canada and Mexico have climbed 482 percent since the North American Free Trade Agreement (NAFTA) took effect in 1994. And exports climbed 257 percent after a trade agreement opened up markets in the Dominican Republic.

Overall, Utah’s exports to free trade agreement (FTA) countries have rocketed up 225 percent since 2002.

Businesses in the state could expect similar growth trajectories if the United States can sign pending free trade deals with New Zealand, Malaysia, Vietnam and other countries.

Exports also powered Utah’s job growth, with jobs in trade-related firms climbing more than twice as fast as total employment in recent years. And these jobs tend to pay more as well.

The benefits of trade flow both ways, too, providing the state access to cheaper imports at lower prices for Utah consumers. It’s estimated that policies liberalizing trade and investment save the average family here more than $10,000 a year.

And trade is increasingly important to the country as a whole, with $2.2 trillion worth of exports supporting 38.1 million jobs.

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That’s why Democrats and Republicans alike agree that Congress must restore Trade Promotion Authority.

The way TPA works is simple. The president negotiates a trade pact with another country, with Congress and businesses providing extensive input along the way. Once the deal is struck, Congress exercises its constitutional power to vote for or against the agreement.

This is vital – after agreeing to lower tariffs in a deal with the president, foreign countries want assurance that Congress will vote on the agreement and not let it twist in the wind.

Once Congress passed TPA in 2002, President Bush was able to sign agreements with Chile, Peru, Singapore and Australia. After the agreement with Australia went into effect in 2005, Utah’s exports of agricultural and construction machinery to Australia climbed an eye-popping 3,133 percent. TPA expired in 2007, but Congress was able to use the remaining authority to pass free agreements with Colombia, Panama and South Korea in 2011.

President Obama called for Congress to pass a modernized TPA in his State of the Union speech and followed up with what’s been described as a "major push" to get it approved this year.

Unfortunately, TPA renewal faces stiff opposition from groups who wrongly think that granting TPA will harm U.S. workers. But the fact is that jobs in Utah tied to trade grew two and a half times faster than total employment between 2004 and 2011. And these jobs tend to pay more than those in non-exporting companies.

Since the economic recovery started in mid-2009, the U.S. economy has struggled to find its footing. Household incomes have actually declined, and job growth has barely kept up with population growth.

The one hope of turbo-charging the economy and creating good jobs lies in opening up new markets for our products and services. And the last thing the country, or Utah, needs right now is for Washington to play politics with trade.

That’s a message Congress needs to hear, loud and clear.

Derek Monson is policy director at Sutherland Institute.

Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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