11 Apr Getting ‘LinkedIn’ to Asia
Need a better job? Want a more fulfilling career?
In today’s digital world, social networks such as LinkedIn are vital for professional success. A strong network of friends and colleagues can break down barriers and open doors, and it is often the surest way to find a job, land business and build a career.
In the global economy, networking is critical for countries too. By linking economies and reducing impediments to commerce, trade agreements can boost economic growth, open up business opportunities and support better jobs for workers.
When America networks on trade, we succeed. More than 45 percent of U.S. goods exports go to the 20 countries with which we have trade agreements, including Canada and Mexico, our biggest export partners. And our trade with these partners tends to be more balanced. In recent years, America has had trade surpluses in manufactured goods and services with our trade agreement partners.
But America still has considerable trade networking to do, especially in forging stronger links with the fast-growing economies in East Asia — a region that will add over a billion new middle-class consumers in the next decade and import an estimated $10 trillion in 2020 alone.
The 10 Association of Southeast Asian Nations countries (including Indonesia, Malaysia, the Philippines and Thailand) now are linked by a growing network of trade agreements with six major economies in their region — China, Japan, Korea, India, Australia and New Zealand. Together, these 16 nations have recently launched negotiations on a Regional Comprehensive Economic Partnership, which would further integrate them in a single trade bloc. As these countries reduce trade barriers with each other, impediments to American trade will loom even larger. Our manufacturers and farmers will lose access to these growing export markets, and service providers will find it even harder to compete in Asia.
Meanwhile, the United States currently has trade agreement links with only three countries in the region — Singapore (2004), Australia (2005) and Korea (2012). While these landmark agreements support growing trade and help sustain American jobs, they alone aren’t sufficient to establish a robust U.S. trade network in East Asia.
America’s relative lack of trade links to Asia is one reason we have underperformed in the contest for trade to this growing region. According to a new Third Way analysis, the U.S. share of trade into East Asia plummeted by more than 42 percent between 2000 and 2010. Of 15 major economies trading into East Asia, we were dead last in growing market share. (During the same period, China and Korea grew their shares by 14 percent.) If this trend continues, by the year 2020, America could be missing out on almost $1 trillion annually in potential trade — trade that could support some 5 million U.S. jobs. And America will continue to lose out on business in a wide range of sectors. For instance, despite $3.7 billion in California exports to India in 2011, precious stones and metals made up 53 percent of all products — all other commodities combined totaled only $1.8 billion.
America’s producers and workers have what it takes to take a bigger slice of Asia’s growing economic pie. The claim that “America doesn’t make anything anymore” is simply not true. The United States remains the world’s largest manufacturer, a global force in farming, and the world’s No. 1 exporter of services. For example, more than 20 percent of California’s agricultural production is for export and, in 2009 alone, California’s farm exports to Asia topped $3 billion, with more than $275 million going to India alone.
Agriculture is not the only export sector of the U.S economy that is helping to create domestic jobs. We excel at producing the products and services that an increasingly urban and affluent Asia wants and needs. From autos to aircraft, food to finance, and heavy equipment to health care, companies and consumers in Asia want to buy American. In fact, U.S. goods exported to the overall Asia-Pacific region in 2011 totaled $895 billion, representing 60 percent of total U.S. goods exports. But America will have trouble closing sales in the region — as long as U.S. exports face an array of trade barriers while our competitors enjoy preferred access under their growing network of trade deals.
This points to the pressing need for America to ramp up trade networking in Asia, beginning with a transparent effort by the Obama administration to conclude a high-standard Trans-Pacific Partnership trade deal in 2013.
The TPP would tie together the United States and 10 other Asia-Pacific countries. It would establish new links with key emerging markets such as Malaysia and Vietnam, and would deepen and update trade arrangements with existing partners in areas including agriculture, services, labor and the environment. It would also include our neighbors Canada and Mexico, whose exports frequently contain a high proportion of U.S. content.
The TPP would also address new issues that are critical for a wide array of U.S. producers and workers, including protection of intellectual property, unfair competition from state-owned businesses, the efficiency of global supply chains, and reducing barriers that particularly affect small exporters. And moving forward, the TPP’s strong and fair trade rules would encourage other nations to join our expanding regional trade network and incentivize lucrative markets like China and India to eliminate barriers to American exports.
Economists project that in the decades ahead, annual U.S. growth will average about 2.3 percent — a full point less than our historical average. To support stronger growth and good jobs, America must tap into Asia, where countries are growing two, three or even four times faster.
And, like a talented worker seeking a better job, that means we’ll need to get “LinkedIn” to Asia.
Rep. Ami Bera, a Democrat, represents California’s 7th District. Ed Gerwin is senior fellow for trade and global economic policy at Third Way.