Trade Is the Key to Building Jobs


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By EARL ANTHONY WAYNE, former U.S. ambassador to Mexico

Recent reports from the Joe Biden administration and the private sector highlight the importance of trade for U.S. prosperity and jobs.

They also point to North America’s role as a fulcrum for testing and achieving U.S. trade objectives and building wellbeing across the continent.

To strongly support, U.S. – and North American – workers, farmers and businesses, however, regional cooperation should also be part of an energized effort to expand export markets around the world with a more vigorous commercial diplomacy.

On March 1, the United States Trade Representative (USTR) released the Biden administration’s 2022 Trade Policy Agenda, it 2021 Annual Report to Congress and its and 2022-26 strategic plan for trade policy. The USTR reports highlight “key elements” of the Biden administration’s approach and reflect its emphasis on forging a more equitable and inclusive trade policy.

The USTR addresses trade around the world, but the agenda’s “key elements” all have significant North America dimensions, underscoring Canada and Mexico´s role as the United States’ largest trade and production partners.

On Feb. 28, the Business Roundtable also issued an updated study on trade and jobs that found more than 41 million U.S. jobs are supported by trade. One in every five U.S. jobs was linked to imports and exports of goods and services, based on pre-pandemic data (2019), the study found, and trade-dependent jobs have grown four times as fast as U.S. jobs generally. About 30 percent of those jobs, over 12 million, are supported by trade with Canada and Mexico, according to authors’ research.

The Business Roundtable report found that trade increases jobs in every U.S. state, including in sectors that are not commonly associated with trade, such as construction and hospitality services. It concluded that trade has net positive effects on the middle class, union members, minorities and those with a high school education, as well as higher levels of education.

Together, these reports highlight how vital the United States’ trade agenda is for growing jobs and prosperity. Contrary to some current public opinion, trade is not a negative for job creation, an impediment to a strong middle class or a side note to domestic investment. It is a key part of restoring, fortifying and building future U.S. jobs. Middle class prosperity will grow as the United States expands markets for its goods and services, and deepens partnerships with countries that make U.S. products more competitive and its supply chains more resilient and dynamic.

This reminder of the vital trade-jobs linkages underscores the importance of restoring what is often called “commercial diplomacy” as a vibrant part of the United States’ economic agenda. It is not enough to “re-shore” businesses from Asia or to develop new, innovative businesses and services if the United States does not also actively expand overseas markets to buy those goods. Other countries, from China to our European partners, actively do this, while the United States has not made commercial diplomacy a priority.

Congress passed a new law in December 2019 mandating a whole of government commercial diplomacy effort to support U.S. workers, companies, farmers, entrepreneurs and stakeholders, but it has yet to be vigorously implemented.

The Biden administration should put a priority on expanding trade and markets for U.S. goods and services, and North America should be at the top of the list.

Canada and Mexico are the United States’ largest trading partners, vying for the top spot over the past two years. They are the largest buyers of U.S. exports, including agricultural goods. Around half the trade across North America is in “intermediate goods,” meaning goods that are used to build final products. Mexico and Canada incorporate more U.S. materials in their manufactured exports to the United States than do any other countries in the world, supporting jobs in all three countries. Plus, all three are now implementing a modernized trade agreement, the United States-Mexico-Canada Agreement (USMCA), which replaced the 25 year-old North American Free Trade Agreement (NAFTA).

To its credit, the Biden administration has built mutually reinforcing processes to achieve good outcomes across the continent. First, it gives high priority to implementing the USMCA with a series of engagements to put the new trade agreement into action. Second, it forged three new mechanisms to complement the USMCA and address issues such as pandemic recovery, resilient supply chains, better border facilitation, critical mineral supply and green energy deployment. The three new processes are the U.S.-Mexico High Level Dialogue (HLED), the Canada-U.S. Roadmap and the North American Leaders Summit (NALS), which all include robust action agendas.

Combined, these North America efforts tackle the “key elements” of Biden’s trade agenda. Of note, the three governments agree on promoting more equitable and inclusive trade in North America, and they are seriously using the USMCA’s cooperation and enforcement mechanisms to deal with problems. The U.S. administration is putting into practice its worker’s rights focus with two successful USMCA cases supporting union democracy in Mexico and has flagged that it will pursue forced labor via the USMCA.

The three neighbors are agreed to bring more small businesses and previously disadvantaged groups into North American commerce and to promote workforce development. The three have agreed on ambitious environmental goals and on promotion of green technology, including electric vehicles. The United States is engaged with Mexico to avoid environmentally dangerous energy policy reform proposals and requested USMCA consultations regarding Mexican environmental practices.

With Canada and Mexico as the largest markets for US agricultural exports, North America will be a testing ground for working through differences and expanding markets that are vital to farmers in all three countries.

The three countries have pledged to strengthen key supply chains after the disruption of the pandemic via bilateral and trilateral working groups. There will be a lot of interest to see if these groups produce tangible results and if the governments can resolve disagreements over issues like “buy America” or vehicle rules of origin. Making supply chains more efficient and resilient will be vital for encouraging companies to bring back investment from China.

Similarly, if done well, this cooperative North America effort can learn from the serious mistakes made during the pandemic and set mechanisms for better managing future pandemics and other cross-border emergencies.  Success requires productive, ongoing public-private stakeholder engagement that can build public support.

Done well, this North American cooperation will serve as a foundation and testing ground for cooperation with other countries and for generating tomorrow’s jobs. The United States must energize efforts to expand markets for U.S. goods and services around the globe as an essential part of creating new opportunities for U.S .workers, farmers and businesses. Getting North America right and getting trade right are essential to growing tomorrow’s jobs, supporting prosperity and building public confidence in the value of trade.

EARL ANTHONY WAYNE, a former U.S. ambassador to Mexico and assistant secretary of state for economic and business affairs, is the board co-chair of the Wilson Center’s Mexico Institute and a distinguished diplomat at American University’s School of International Service.

The an abbreviated version of the above article first appeared in The Hill and is being republished by Pulse News Mexico with express prior permission.

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