After years of inaction, Congress is finally set to act on a series of extremely important bills on international trade. It is critical that Congress vote to support these measures, especially legislation that would restore Trade Promotion Authority. Trade is the lifeblood of not just the U.S. economy, but the global economy. Reducing tariffs and other barriers and thereby increasing the ability to trade goods and services around the world is essential to helping economies grow while providing significant benefits to consumers.
For the retail industry, trade agreements are important because they lower costs for American families and businesses alike and open new investment opportunities for retailers at home and abroad. Family friendly trade agreements have the potential to reduce or eliminate high taxes now applied to U.S. imports of many consumer goods like food, clothing and shoes. Tariffs collected on consumer goods from countries in two pending trade agreements alone – the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership – reached nearly $6 billion in 2013, and hidden taxes on many products reach 30 percent or higher. Imagine the savings for U.S. consumers if we are able to negotiate these tariffs down.
Trade agreements also help lower barriers to investment, allowing retailers to open stores overseas. American retailers are continually looking for opportunities to expand foreign operations. This expansion not only benefits U.S. retailers, but also U.S. vendors looking for opportunities to sell their goods abroad. While retailers might not make products, they create markets that allow companies to sell their goods around the world. This is even more important as e-commerce continues to grow at a record pace, enabling small and medium-sized retailers to reach consumers beyond our shores.
TPA is critical to this growth. TPA is not a free trade agreement but rather a procedural measure that both Congress and the Administration need to ensure that the United States is able to negotiate the highest standard of free trade agreements with our trading partners. As part of TPA, Congress sets objectives for the Administration to seek during negotiations. It also provides transparency, oversight and accountability for Congress to be able to review ongoing trade negotiations. In return, TPA requires Congress to take a straight up-or-down vote on the agreements once they have been negotiated and fully vetted.
We hope that under TPA members of Congress would continue to engage the Administration throughout negotiations to ensure that all objectives are met so that when an agreement is final they would be able to vote yes.
An up-or-down vote is important because trading partners will not put their best offers on the table if they know Congress will amend the agreement. At the end of the day, Congress has the ultimate authority over any free trade agreement, but the vote has to be either yes or no, not amendments that amount to renegotiation. We hope that under TPA members of Congress would continue to engage the Administration throughout negotiations to ensure that all objectives are met so that when an agreement is final they would be able to vote yes.
Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. NRF’s recent “Trade Matters” study shows that 6.9 million retail jobs are related to international trade. These are good jobs that support both imports and exports. With TPA in place, the Administration will be able to negotiate free trade agreements that will continue to support and grow these jobs while also providing benefits to U.S. consumers.
Global trade will continue with or without U.S. involvement. Congress needs to act now to pass TPA and ensure the United States continues to set the ground rules for global trade.