A Test of Leadership
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By Tom Donohue, President and CEO, U.S. Chamber of Commerce
America's economic prospects depend on many factors, but one we can't afford to ignore is the growing role of the Asia-Pacific countries in the global economy. With more than half of the world economy now centered in this region, the old rules of international commerce no longer apply.
Instead of seeing these changes in the global balance of economic power as a problem, we should view them as an opportunity. The Asia-Pacific region represents a tremendous market for American businesses of all sizes to export their goods and services to more than 2 billion potential customers.
But to take advantage of these new opportunities, we need stronger leadership. Asian nations are increasingly trading with one another, while the United States sits on the sidelines. According to the U.S. Trade Representative, there are 168 free trade agreements in force in Asia today, up from only 22 in 1980. Seventy more are under negotiation. However, the United States has only 2 FTAs with Asian countries: Singapore and Australia. America is increasingly on the outside looking in. We will pay a price if this continues. What can we do to ensure that America remains engaged and competitive in Asia? President Obama took an important first step last week when he committed the United States to engage in the Trans-Pacific Trade Partnership negotiations that could one day lead to freer trade across the Asia-Pacific region.
But there is much more that must be done. We need Congress to ratify the U.S.-Korea Free Trade Agreement that was concluded two years ago! South Korea is already our seventh-largest trading partner, and companies of all sizes--including the nearly 17,000 small and medium-size U.S. companies that already export to South Korea--will benefit from a trade deal. The cost of inaction is high. According to a U.S. Chamber study, failure to implement this agreement could mean the loss of 345,000 U.S. jobs and $35 billion in exports.
We also need to successfully complete the Doha Round of global trade talks, fight economic isolationism wherever it exists, and rebalance growth, spending, and currency values to bolster global economic stability.
If America is absent from the Asia-Pacific, the resulting power vacuum will be filled by China or even by our European competitors. But if we embrace free trade across the Pacific, we can drive global economic recovery, create badly needed jobs, and advance economic and social progress in developing and developed countries alike. All that's needed now is leadership to make it happen.