Trade Still Matters

WASHINGTON, D.C.—Enhancing competitiveness and promoting good governance are two of the many reasons trade still matters, according to Mary Ryckman, the assistant United States trade representative for Trade and Development.

Trade, she said, allows the U.S. and its trading partners to “define the rules of the road, the standards that countries should adhere to, the norms which create a sense of fairness among economies, and the mechanisms by which disagreements can be peacefully resolved.”

Ryckman spoke June 21 during The Council of State Governments’ Leadership Forum.

“Exports with free trade agreement partners are up 57 percent since 2009,”said Ryckman. She attributed the increase to President Obama’s National Export Initiative, known as the National Export Initiative, known as NEI. Ryckman said U.S. exports have reached $2.3 trillion, representing a third of America’s total economic growth during the past five years. As a result, 1.6 million new jobs have been created due to export expansion.

States have seen similar success. In 2013, exports made up 8.1 percent of California’s gross state product, supported 787,300 new jobs and brought $168.1 billion to the state economy.

Ann Paldros, manager of the Missouri International Trade and Investment Office, said her state has earned just shy of $14 billion from exports. Economically, trade has left its mark, but more can be done to help companies export.

“We’re in the midst of establishing new communication between states; in fact, we’re always looking for new networks with states,” said Rebecca Rosen, director of intergovernmental affairs and public engagement at U.S. Trade Representative (USTR).

Ashley Zuelke, special adviser for export policy in Promotion and Strategy from the U.S. Department of Commerce’s International Trade Administration, presented another opportunity for state and federal governments to work together.

“The Department of Homeland Security is working with states and local U.S. Export Assistance Centers to promote awareness of the opportunities to export, to share success stories and best practices, to award grant opportunities for states to prioritize exporting companies, and to improve data with which states and companies make decisions on exporting,” she said.

Zuelke said educating companies on the benefits of exporting is most important to creating movement within the states.

“Exports are services, people, goods, data and anything that brings money into a community,” she said. “We should educate states and businesses on this broad-based understanding to continue to foster trade.”

She noted NEI/NEXT, an initiative announced last month by U.S. Secretary of Commerce Penny Pritzker, is an additional opportunity for states to coordinate with its federal partners, like the Department of Commerce, Export-Import Bank and the Small Business Association. These federal institutions often partner with local and regional leaders to support states in prioritizing exports and attracting and retaining investments.

Investment is another side of the trade issue.

George McElwee, vice president of public policy and government affairs at the Organization for International Investment, said the U.S. has decreased its share of foreign direct investment flows from 20 percent in 2000 to 17 percent now. The U.S. hasn’t necessarily become less competitive overall; In fact, the U.S.’s competitiveness has not changed dramatically over the past two years while the context for it has.

McElwee said states can help increase U.S. competitiveness by aligning themselves with international norms, in addition to providing tax and economic incentives for international exporting.

State corporate tax policy, however, continues to repel interested foreign investors, McElwee said. Paldros suggested the establishment of foreign trade zones as an opportunity to promote exports.

Panelists said states should continue to work together and coordinate with federal partners to inform and explain to key state and federal lawmakers the reasons why trade still matters.

The Council of State Governments 2014 Leadership Conference: