Yesterday, the U.S. Chamber of Commerce welcomed the Senate Finance Committee’s hearing on the U.S.-Panama Trade Promotion Agreement, calling it a critical step in efforts to spur economic growth at home and abroad.  The fact that we don’t already have a trade agreement in place with Panama only puts American workers, farmers, and companies at a disadvantage. It’s time to for Congress to fix that.

In a moment of levity at the upbeat hearing, Chairman Max Baucus (D-MT) wondered aloud why the sea level of the Pacific Ocean is 20 centimeters higher than the Atlantic (he answered his own question: it has to do with currents and water density). Caterpillar Chairman and CEO Jim Owens, who was testifying on behalf of the Chamber, offered to dig a ditch to equalize them. We know that trade is important to level the playing field for America’s farmers, workers, and businesses; perhaps it can adjust sea levels too!

It was fitting that the hearing took place during World Trade Week, which got off to a bang on Monday when U.S. Trade Representative Ron Kirk delivering his first major address to the business community at the Chamber. Ambassador Kirk left the assembled business representatives impressed with his passion and his commitment to securing the benefits of trade for the American people. He explained that:

USTR is working diligently to carry out a trade policy that is more coherent and more resonant with the American people. We’re seeking to finalize the Panama free trade agreement, working to resolve outstanding issues on the Colombia and Korea agreements, and seeking a way forward on the Doha Development Round of World Trade Organization talks. USTR is also crafting new goals for the coming months and years.

In fact, Kirk said his team is working “furiously” to get the Panama agreement ready for Congressional consideration in the near term, underscoring the point by embracing Panamanian Ambassador Federico Humbert as he made his way to the podium. He also identified Asia as a region ripe for greater trade engagement by his trade negotiators and by American business.

President Franklin D. Roosevelt proclaimed the first World Trade Week in 1933. As Chamber Senior Vice President for International Affairs Myron Brilliant noted:

Trade sustains millions of American jobs. Approximately 57 million American workers are employed by firms that benefit from exports, according to the Treasury Department. One in five factory jobs depends on exports, and one in three acres on American farms is planted for hungry consumers overseas.

President Obama eloquently captured the benefits of trade in his World Trade Week presidential proclamation:

When the world’s consumers fly in a U.S.-manufactured airplane, eat a steak from America’s heartland, watch a Hollywood movie or visit the Grand Canyon, they are helping to create and maintain good jobs for Americans.

A number of historic parallels were on display this week. Just as America did in the Great Depression, today we face a terrible economic downturn, a sharp contraction in world trade -- and we had a new leader in the White House.

For President Roosevelt, trade quickly became part of the cure for America’s economic afflictions. Seventy-five years ago this spring, President Roosevelt signed into law the Reciprocal Trade Agreements Act -- which marked the birth of modern American trade policy.

The Reciprocal Trade Agreements Act was the brainchild of Cordell Hull, who became America’s longest serving secretary of state and later won the Nobel Peace Prize. It opened the door to trade negotiations in which countries offer one another access to their domestic markets. In this way, countries trade away their tariffs to spur growth and jobs:

Secretary Hull addressed the U.S. Chamber of Commerce at that time, three-quarters of a century ago. Speaking in the same room as Ambassador Kirk, Hull declared that the United States must lead the world to embrace trade.

It is incumbent upon the United States to supply the inspiration necessary to induce the nations of the world … to move in the direction of international economic sanity.

Or, as he also put it: “Where trade crosses borders, armies do not.”

Hull later expressed pride that, during his tenure, U.S. trade agreements were ultimately to be concluded with 37 nations; in fact one was pending when the RTAA became law … with Colombia!  Hull said:

When many other nations saw the possibilities, they embraced such agreements not only with ourselves but also with one another. Trade came to be recognized … as the only way out of commercial chaos and as one of the main factors for peace.

In the long run, Hull’s legacy was also to include the General Agreement on Tariffs and Trade. The GATT and its successor, the World Trade Organization, helped trade to expand from $80 billion in 1947 to nearly $20 trillion last year.
 
By 1945, FDR used World Trade Week to brag to Congress that

We have entered into reciprocal trade agreements with 28 countries… Each agreement increased the freedom of businessmen in both countries to buy and sell across national frontiers. The agreements have contributed to prosperity and good feeling here and in the other contracting countries…. between 1934-35 and 1938-39 our exports to trade-agreement countries increased by 63 percent, while our shipments to non-agreement countries increased by only 32 percent.

History offers many lessons.  The business community is greatly encouraged that U.S. Trade Representative Ron Kirk and Senate Finance Committee Chairman Max Baucus seem to have those lessons firmly in their grasp.