If you’ll recall, I blogged in mid-2013 about the new trade initiatives being promoted by the White House, one reaching across the Pacific toward Asia (the Trans Pacific Partnership Agreement (TPPA), the other reaching across the Atlantic toward Europe (the US-EU Free Trade Agreement) ISBDC Export Blog – US Free Trade Update. These initiatives, both considerable in their own right, together offer a substantive opportunity to propel American exports – great news for US manufacturers. Continued political gridlock in Washington sidelined this effort in January, primarily by the Leader of the US Senate – at the time.
Today is a new day in Washington following the mid-term elections, one that brings a fair amount of change to policy priorities inside the nation’s capital, including renewed interest in advancing these aforementioned trade deals.
A day after the November 4 elections and now with legislative and executive branches fully on opposite sides of the political aisle, Senator (and presumed new Majority Leader) Mitch McConnell acknowledged a few key areas of mutual cooperation with the President, and trade was first on his list. The President followed suit later in the day, acknowledging the changing political landscape and listing trade as the second of four agenda items he sees for potential common ground. That’s great news for any fan of free trade and US export development.
This all comes ahead of next week’s planned trip to Asia by the President, a visit Mr. Obama has recognized will include the TPPA trade talks.
What was true a year ago is true today, free trade spurs economic growth here at home and across the seas and improves standards of living by lowering the costs of goods for consumers in all the involved economies. Now with the loss of political clout of the party that blocks such needed legislation as Fast Track Authority (Congressional approval of a president’s ability to forge and enforce free trade talks and agreements), Free Trade may again get its due chance to advance our economy.
Further push for these free trade agreements– slower growth in China now the norm going forward, into the next decade. An article appearing in the October 20, 2014 issue of the WSJ focused on a report by the Business Research Group of the Conference Board, suggesting China’s GDP growth to slow to 5.5% between ’15 and ’19, and further slow to $3.9% between ’20 and ’25 – a marked slowdown form the torrid pace of 10-12% over the past decade, and down from 7.7% last year. China’s remained the strongest export growth market for the US in recent years. With the world’s 2nd largest economic engine slowing so significantly, US manufacturers will need those trade deals if we’re to sustain that part of the US economy that today represents 30% of our growth – exports.