By Matt A. Mayer
The Brookings Institution recently released a report tracking Ohio’s export industry. It’s filled with great news. Our state’s exports grew 9.6 percent between 2009 and 2012. Youngstown alone clocked in an export growth rate of 22.2 percent – the highest of any metropolitan area in the country – and the Cincinnati-Middletown metropolitan area was, according to the U.S. Department of Commerce, the 16th largest exporter in 2012.
More exports inevitably result in more good-paying jobs for Ohioans. Gov. John Kasich is doing all he can to get Ohio moving, but he needs help from Congress. Constitutionally, Congress sets the rules governing international trade.
To that end, lawmakers in Washington, including all of Ohio’s congressional delegation, need to work toward expanding America’s international trade agreements and opening up new markets to Ohio exports. Sens. Rob Portman and Sherrod Brown should be leading the charge on this vital issue to Ohio manufacturers.
The importance of international trade to our state economy is undeniable. According to one recent study, the export/import industry supports roughly 1.4 million local jobs.
Every year, Ohio ships about $62 billion worth of goods and services to 211 different countries. Nationally, our state ranks among the top 10 exporters in 54 different economic sectors.
Imports are essential, too. Ohio benefits immensely from the production advantages of other countries. Roughly 9,000 local companies rely on foreign products. And imports save the average Ohio family of four more than $10,000 per year.
Some people worry that imports compete with goods made here at home. But, in fact, fully 61 percent of imports nationally are not finished products, but rather intermediate inputs and materials that American companies then use to keep production costs low and stay competitive.
Increasing the ranks of America’s free-trade partners would lower existing trade barriers and create clean, uninhibited commercial channels. Such reforms have already substantially increased Ohio’s export growth. In fact, in 2012, countries that have trade deals with America bought 19.2 times more goods per capita from our state than those that don’t.
However, Ohio companies that trade with countries that we do not have free-trade agreements with currently face some serious hurdles.
Malaysia, for instance, imposes a 40 percent tariff on tires from Ohio companies like Cooper Tire & Rubber. Vietnam has a 14 percent tariff on glues and adhesives from businesses like Franklin International.
New Zealand has tariffs on fibers of up to 5 percent, affecting Ohio-based Owens Corning. And Japan imposes a 3.9 percent tariff on PVC, a type of plastic, disadvantaging PolyOne, headquartered in Avon Lake.
Developing free-trade agreements with these countries would help to lift these barriers. Ohio’s exporters could better compete in foreign markets and create more jobs. And local consumers would gain access to a wider range of low-cost goods.
Similarly, Ohio’s economy would get a big boost from renewed Trade Promotion Authority (TPA). In the 1930s, Congress granted this power to President Franklin Roosevelt, allowing him to negotiate trade agreements with other nations and then submit them to Congress for approval.
Every president from each party since Roosevelt was also given TPA – until 2007, when the TPA law that had passed in 2002 expired and Congress did not renew it.
Legislators need to fix this. TPA should be renewed — immediately. It is an easy way to enact important trade agreements that will create jobs and improve lives right here in Ohio. Instead of standing athwart history on behalf of his Big Labor backers, Sen. Brown needs to support TPA on behalf of the vast majority of Ohio workers who will benefit from increased trade. Without TPA, many countries won’t enter trade agreements with the United States, fearing congressional politics will submit those agreements to death by a thousand sound bites.
As the United States dithers on TPA, our global competitors are rapidly entering into trade agreements, thereby putting American businesses and workers at a growing disadvantage. Enough is enough.
International trade already serves a vital role in the Ohio economy. By further reducing barriers to global commerce, Congress can help our state businesses grow and create prosperity and peace of mind for Ohioans.
Matt A. Mayer is the CEO of Opportunity Ohio.
This article originally appeared in the Cleveland Plain Dealer.