Pending agreements with Pacific nations and the European Union are international trade priorities for the California Chamber of Commerce as the 114th Congress convenes for its second session.
The CalChamber sent a letter recently outlining these priorities to members of the California congressional delegation, U.S. Secretary of Commerce Penny Pritzker and U.S. Trade Representative Michael Froman.
The CalChamber urges support regarding pending regional and multilateral trade agreements. It is critical to the consumers, workers, businesses, farmers, and ranchers in California that these job-creating trade agreements are negotiated and approved at a time when they are needed more than ever.
Trade agreements ensure that the United States may continue to gain access to world markets, which will result in an improved economy and additional employment of Americans. The CalChamber urged California representatives in Congress, the Commerce Secretary and U.S. Trade Representative to support these trade agreements that will continue to keep American and California businesses competitive.
Leaders of the current 12 Trans-Pacific Partnership countries—Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam—successfully concluded negotiations for the Trans-Pacific Partnership (TPP) on October 5, 2015.
Each country’s government now must approve the text of the agreement. It is anticipated that Congress will consider the TPP this year.
The TPP contains 30 chapters of trade, labor, intellectual property, and environmental regulations that will eliminate 18,000 foreign taxes on U.S. products, boost exports, protect intellectual property rights, and strengthen labor rights and human rights abroad.
According to the U.S. Department of Commerce, goods exported to TPP countries support an estimated 3.1 million U.S jobs, with services exports supporting an additional 1.1 million U.S. jobs. California especially would benefit from the TPP, as 39,160 companies from California exported goods to TPP countries in 2013. In addition, 41% of the state’s good exports went to TPP countries in 2014.
The market of more than 800 million consumers represents 40% of world gross domestic product (GDP). In 2014, U.S. exports with TPP members reached $736.5 billion; California exports were $71.6 billion, according to the U.S. Department of Commerce.
The TPP reinforces the Asia-Pacific Economic Cooperation goal of promoting regional economic integration and could build toward the Free Trade Area of the Asia-Pacific.
The trans-Atlantic economic partnership is a key driver of global economic growth, trade and prosperity, and represents the largest, most integrated and longest-standing regional economic relationship in the world.
Together, the European Union and the United States are responsible for more than 11.5% of the world’s population, nearly half of global GDP, a third of global merchandise trade, and 40% of world trade in services. The trans-Atlantic relationship defines the shape of the global economy as a whole; either the European Union or the United States also is the largest trade and investment partner for almost all other countries.
According to the World Bank, the EU market represents 508.3 million people, and has a total GDP of $18.46 trillion. The United States has more than 318.9 million people and a GDP of $17.42 trillion.
Total bilateral goods trade between the European Union and United States was $694.3 billion in 2014, with the United States exporting $276.1 billion worth of goods to EU member nations.
California exports to the European Union in 2014 totaled $29.6 billion. California is one of the top exporting states to Europe, with computers, electronic products and chemical manufactures as the state’s leading export sectors to the region. EU countries purchase roughly 17% of all California exports. For California companies, the single market presents a stable market with huge opportunity.
Tariffs on goods traded between the U.S. and the EU average less than 3%, but even a small increase in trade could have major economic benefits. A free trade agreement could increase economic output in the long term, benefiting industries ranging from chemicals to automakers. EU-U.S. commercial links are unrivaled. Total U.S. annual investment in the EU is higher than in all of Asia, while EU investment in the U.S. far outstrips EU investment in India and China combined.
The CalChamber is supportive of Europe and the United States negotiating to deepen the world’s largest trading relationship with focus on trade and investment initiatives including:
- eliminating tariffs on trans-Atlantic trade in goods;
- establishing compatible regulatory regimes in key sectors to address regulatory divergences that unnecessarily restrict trade;
- a bilateral investment agreement;
- liberalizing cross-border trade in services, without exclusions; and
- bilateral expansion of government procurement commitments.
The CalChamber supports expansion of international trade and investment, fair and equitable market access for California products abroad, and elimination of disincentives that impede the international competitiveness of California business.
Detailed information vital to the businesses that make California one of the largest exporting states in the nation and one of the largest economies in the world is available at calchamber.com/international.
Staff Contact: Susanne T. Stirling