Our nation has arrived at a critical juncture. It needs to take control of its destiny and make tough decisions on a myriad of policy issues ranging from taxes to entitlements and spending cuts. If we fail to do so, our country will be in great peril and at the mercy of high unemployment and record deficits for decades to come. One of the keys to bolstering our economy and escaping this beleaguered fate lies in expanding free trade. In other words, one of the keys to bringing America back (controlling spending, saving and strengthening Medicare and Social Security, and creating a healthier more secure economy) is to literally work our way out of the debt hole we have created for ourselves.
Free trade has the ability to spur competition and promote investment abroad and at home. Such competition forces American companies to become more productive and efficient, improving our country’s economy as a result. The North American Free Trade Agreement (NAFTA) – signed by President Clinton in 1993 – helped create six million new jobs and produced more than $500 billion in goods and services traded between the United States and Mexico, according to a recent article in The New York Times. Little known to all of us here in the Unites States is that we have a very robust free trade relationship with the United Arab Emirates (UAE). The UAE has become the largest export market in the Middle East for the United States with total U.S. exports reaching $15.9 billion in 2011. With a foundering economy, it is more imperative than ever that the president negotiates trade deals that will help replicate the successes of NAFTA and the UAE, and put America back on a path toward prosperity starting with getting our citizens back to work.
To their credit, Congress and President Obama have not been entirely unsuccessful in making progress on trade agreements. In fact, Congress approved and President Obama signed trade deals with South Korea, Colombia and Panama in early 2011. The Heritage Foundation notes the economic benefits of the South Korea-U.S. Free Trade Agreement alone are expected to increase U.S. exports by an estimated $10 billion annually, increase the gross domestic product (GDP) by $11 billion and add nearly 70,000 U.S. jobs. Further, if these free trade agreements had failed to have been approved, the U.S. Chamber of Commerce found it could have potentially resulted in a loss of 380,000 jobs
There is no doubt that expanding trade with Panama, Colombia and South Korea is a step in the right direction, but there is much more that the United States needs to do to create a better trade environment. These three trade deals began in 2007 and were actually initiated by President George W. Bush. Thus far, President Obama has failed to sign any trade agreements that originated from his administration. While other nations engage in trade agreements with emerging markets like Brazil, Egypt, India and Indonesia, the U.S. Chamber of Commerce notes that the United States is only involved in one out of the 100 separate trade deals currently being negotiated as of May 2012.
There are many promising avenues that President Obama can pursue to improve and expand American trade policy. For starters, many policy analysts say that an E.U.-U.S. free trade agreement could rival NAFTA and would benefit each greatly. The Chamber of Commerce notes that strengthening commercial ties with Europe through a new Trans-Atlantic Pact and eliminating tariffs will boost trade by more than $120 billion within five years between the nations, producing GDP gains of nearly $180 billion. Additionally, America needs to desperately negotiate trade agreements with its neighbors. Rapidly developing countries like Brazil and Argentina are being ignored, so much so that China has overtaken the United States as Brazil’s largest trading partner. This should simply not be the case.
The President can no longer afford to lead from behind. For the good of the country, President Obama must get serious about reviving and reenergizing our economy. The country expects him to take action, reach out to our global trading partners, and strike new free trade agreements so we can increase domestic production and export American goods around the world. This is a very important key to growing ourselves out of our economic woes.
Ortiz is a Republican strategist, principal at Crane and Crane Consulting, and an advisor on public policy and regulations for a D.C.-based law firm.