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- The Word On -

July 8, 2009
Traer Star-Clipper

By Senator Charles Grassley

Q: How does international trade benefit Iowa?

A: International trade helps Iowans stretch their hard-earned dollars by creating a larger marketplace for competition, which leads to lower prices and more choices. Trade also helps Iowa manufacturers lower their input costs, which dampens inflationary pressures. Third, the U.S. Department of Commerce reports that over 16 percent of Iowa manufacturing workers depend on exports for their jobs, and that Iowa exported $12.1 billion in merchandise in 2008. That's a 25 percent increase from 2007, and an 89 percent increase since 2004. Iowa agriculture also relies heavily on export sales, with every third row of crops headed to an overseas market. If the U.S. closes its borders to trade, we have to expect America's trading partners will do the same, and Iowa exporters will suffer. With 95 percent of the world's consumers living outside the United States, Iowa needs access to foreign markets for good-paying jobs in value-added agriculture, manufacturing and the service industries. Export-oriented jobs have been found to pay about 12 to 15 percent more on average than other U.S. jobs.

Q: Does international trade ship American jobs overseas?

A: As Ranking Member of the Senate Finance Committee, which has jurisdiction over international trade policy, I hear from experts on a wide variety of trade topics, including the impact of trade on American workers. The facts show that trading with the world is in the best interest of the United States and Iowa. Federal Reserve Chairman Ben Bernanke has stated that two percent of job losses can be attributed to foreign trade and one percent to outsourcing. That means 97 percent of job losses in the United States are caused by other factors. We need to better prepare and train the three percent of workers who are affected by trade and outsourcing so they can compete for the new jobs of the future. That's why I worked to restructure and expand the federal Trade Adjustment Assistance program to make more workers eligible for benefits that can help them get back on their feet. I also worked to improve the accountability and internal oversight of the program to make sure taxpayer dollars are carefully spent.

Q: Does the United States have international trade agreements with every country?

A: The United States doesn't have trade agreements with every country, but we have bilateral trade agreements with Australia, Bahrain, Chile, Israel, Jordan, Morocco, Peru, Oman and Singapore, and we are members of the North America Free Trade Agreement and the Central America-Dominican Republic Free Trade Agreement. The United States also participates with 152 other member countries in the World Trade Organization. Three other trade agreements, with Colombia, Panama and South Korea, are pending. Congress should pass these agreements to eliminate the tariffs that those countries impose on U.S. exports. For example, passing the agreement with Panama would give U.S. manufacturers a significant competitive advantage in exporting products for the Panama Canal expansion project. And, since Colombia, Panama and South Korea are currently negotiating agreements with other countries, failing to implement our agreements with them will force U.S. exporters to compete with one hand tied behind their backs. It means they lose opportunities to foreign competitors. Congress and the president shouldn't let that happen in the global marketplace of the 21st century. American workers can't afford it..



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