Tuesday, July 7th, 2015
By Michael Taylor, SPI Senior Director, International Affairs and Trade
On June 29, 2015, President Obama signed into law Trade Promotion Authority (TPA). TPA has been granted to all but one of our 13 presidents since President Franklin Roosevelt. This negotiating authority allows trade agreements such as the pending Trans-Pacific Partnership (TPP) to move through Congress under special rules intended to speed up the process, thus it is known colloquially as “fast-track.” Congress would not be able to amend or filibuster a trade agreement, and the deal would only need 51 votes in the Senate to pass, as opposed to the 60 votes otherwise necessary.
The 2015 version of TPA also represents an enhanced or upgraded authority. TPA-2015 not only gives President Obama the leverage he needs to close out negotiations on the TPP in the fast-growing Asia-Pacific region, but it ensures that the TPP will include the strongest protections in history for our workers and our environment. Along with opening up some of the fastest growing markets in the world to Made-in-America goods and services, it will also make every word of the TPP deal available to the American people for the first time.
What does this all mean for the U.S. plastics industry? First, free trade agreements (FTAs) like TPP benefit the industry as a whole. In 2014, the U.S. plastics industry posted a trade surplus of $12.6 billion with the world. At the same time looking only at our trade with those 20 countries with which we have FTAs currently, the industry recorded a trade surplus of more than $20.9 billion. Second, the U.S. plastics industry exported goods worth more than $38.5 billion to the TPP countries in 2014 up 4.6 percent from 2013. As we have seen in the past, more market access results in an upsurge in our exports. A recent example here is KORUS or the U.S.-Korea Free Trade Agreement which entered into force on March 15, 2012. Prior to KORUS, South Korea was the tenth largest export market for the U.S. plastics industry. Afterwards, South Korea became our seventh largest export market. Third, more exports means more jobs. U.S. goods and services exports support American jobs. In 2014, U.S. exports to the EU supported 2.6 million jobs, exports to NAFTA supported 2.9 million jobs, and exports to Asia and Pacific supported 3.5 million jobs.
People concerned about American manufacturing jobs leaving the U.S. as a result of an agreement like TPP, first and foremost, do not fully appreciate the vastly improved competitive position we now occupy globally, but second, do not understand that locating a manufacturing facility in one country to supply customers around the world these days is never really simply about the cheapest labor costs per hour.
Thanks to the enhanced TPA-2015, we are guaranteed a TPP that will include the strongest protections in history for our workers and the environment. Negotiators will also move forward on an accord with Europe, knowing that any agreement over the next six years will be subject to a straight up-or-down vote, but cannot be amended or filibustered in Congress.