Expanding Trade Will Strengthen the Economy and the President’s Legacy
Nov 13, 2014
By John Rigolizzo: Berlin, New Jersey
When I was a young, beginning farmer, an older farmer shared a bit of wisdom. “For every 1 percent increase in the wholesale food market, farmers see their revenue grow by 5 percent.”
Across the years, I’ve learned that if this isn’t exactly an iron law of agriculture, it’s at least a good rule of thumb. I’ve seen it come true, over and over again.
Global trade is no exception. When demand for food around the world grows, it easily converts to an appreciable increase in revenue for the farmers who produce that food, the individuals and businesses that process it, the grocers that sell it and on down the line.
This is just one of the reasons I believe President Obama must make trade expansion a top priority of his final two years in the White House. Instead of thinking about controversial executive orders on issues like immigration, he should work with Republicans and Democrats in Congress to hammer out trade agreements that benefit all Americans.
His legacy depends on it.
Right now President Obama risks being remembered as a man who presided over a slow-growth economy. To be sure, he has faced enormous challenges, especially early in his tenure. Today, however, global trade presents him with enormous opportunities.
He must do everything in his power to seize them.
Unfortunately, this President has not focused on trade in the first six years of his time in office. He deserves partial credit for pushing through three trade agreements negotiated by the Bush administration. The pacts with Colombia, Panama, and South Korea are already helping our economy. The more we trade, the better we do.
He must and can do more.
At times, the President has talked a good game. He just hasn’t followed through with game-changing action. His promise to double exports by 2015, for example, won’t come close to meeting its ambitious goal.
What’s more, President Obama’s two major trade initiatives appear to have stalled. We’ve seen little progress on a deal with the European Union, and fresh concerns about our ability to resolve differences over the role of biotechnology in modern agriculture have created a new sense of pessimism.
Likewise, talks with a dozen nations along the Pacific Rim—a potential agreement called the Trans-Pacific Partnership—also have stumbled. Not so long ago, we were promised that TPP would be wrapping up around now.
Despite these disappointments, it’s not too late for President Obama to reverse course. Members of his administration know what’s on the line. “Given the current constraints on fiscal and monetary policies, there is no better source of growth than trade,” writes Michael B. Froman, our top trade diplomat, in the new issue of Foreign Affairs.
In 2013, the United States exported more than $2 trillion in goods and services, supporting more than 11 million American jobs. Over the last five years, one third of all economic growth in the United States has come from global trade.
Farmers know this as well as anybody. About one-third of all the corn we grow ships to international customers. Our livelihoods depend on access to foreign markets. Whenever access improves, money goes into our pockets—as well as the pockets of everyone from longshoremen who work at our ports to factory workers who make tractors in the heartland.
A good first step would be congressional approval of Trade Promotion Authority, a legislative tool that allows the President and his team to negotiate trade agreements confidently and then submit them to Congress for up-or-down votes.
Passage of TPA would send a powerful signal to the EU and the Pacific nations that we’re serious about striking significant deals.
Earlier this year, Sen. Harry Reid of Nevada—the current leader of the Democrats in the Senate—sent a different signal, when he announced his opposition to TPA. If voters told us anything last week, however, they said that they expect the President and Congress to cooperate on policy initiatives that will benefit Americans. In other words, our political leaders should stop playing partisan politics and end the gridlock of the recent past.
President Obama ought to reach out to the new Congress—its rookies and its veterans—and ask for TPA. This would be a good start to a new era of bipartisan cooperation, and a great way to jumpstart this President’s final days in the Oval Office.
That old farmer I met long ago would know exactly why this makes sense.
John Rigolizzo, Jr. is a fifth generation farmer, raising fresh vegetables and field corn in southern New Jersey. The family farm produces for retail and wholesale markets. John is a volunteer board member of Truth About Trade & Technology (www.truthabouttrade.org).
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