PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

President Obama Pushes Trade

By at 21 January, 2015, 11:44 pm

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by Raymond J. Keating-

International trade is a big deal for the economy, and for small businesses.

Consider that from 2004 to 2013, growth in real exports accounted for 37 percent of real U.S. GDP growth. Factor in growth in imports, and total trade growth (exports plus imports) equaled 58 percent of real economic growth.

As for small business and trade, the International Trade Administration reports that 98 percent of U.S. companies exporting goods are small or medium-sized businesses with less than 500 workers, and 97 percent of importers are small and medium-sized firms as well.

President Barack Obama and his administration are making noise about the U.S. advancing free trade. In fact, the President called upon Congress to give him trade promotion authority (TPA) in his State of the Union address on January 20.

Certain members of the Obama Administration are big on promoting trade. In a recent post on the U.S. Department of Commerce’s blog, it was noted that Commerce Secretary Penny Pritzker “is leading the charge to make exporting a larger part of the DNA of all American businesses. Key to achieving this goal and at the top of the Administration’s trade agenda is passage of Trade Promotion Authority, the Trans-Pacific Partnership (TPP) and the Transatlantic-Trade and Investment Partnership (T-TIP).  Once completed, TPP is expected to make it easier to sell American products and services to more than 40 percent of global GDP.  T-TIP will cover nations that account for nearly half of the global economy and nearly a third of world trade flows.”

That’s refreshing. So, what’s being heard from Congress?

Well, unfortunately, the President’s own party and key allies are, once again, trying to stop free trade from advancing (but Republicans will have some defections too). As reported by The New York Times on January 8: “President Obama is facing opposition from fellow Democrats to one of his top priorities: winning the power to negotiate international trade agreements and speed them through Congress. As Mr. Obama’s team works privately to line up support for the so-called trade promotion authority, a coalition of Democratic lawmakers and activists from organized labor, environmental, religious and civil rights groups is stepping up efforts to stop him.”

So, President Obama will have to turn to congressional Republicans, and it looks like many in the GOP are willing to advance a pro-growth, pro-small business trade agenda featuring TPA (or fast track authority), the Trans-Pacific Partnership, and the Transatlantic-Trade and Investment Partnership with the European Union.

A January 13, 2015, Reuters report noted, “Paul Ryan, the head of the House of Representatives committee responsible for trade, said fast track authority would help get a better deal from trading partners and Congress would push ahead with legislation ‘first thing.’”

Meanwhile, over in the Senate, Republicans are sending positive signals on trade. As noted by TheHill.com on January 7, Senate Majority Leader Mitch McConnell declared his intention to work with the White House on trade, wryly adding, “I am happy the president has now become a born-again free trader.” In addition, it was pointed out, “Sen. Orrin Hatch (R-Utah), who is now chairman of the Senate Finance Committee, has said that fast-track is a top priority for him and he wants to get it done early this year.”

Free trade clearly should be a Republican issue if they are serious about reducing governmental policies that limit opportunity and growth. And it’s good to see that President Obama is moving farther away from the protectionist stances he took prior to gaining the White House. But Mr. Obama will have to work hard to get enough members of his own party onboard so that TPA, and the Trans-Pacific and European Union trade deals can become realities.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

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