Louisiana economy depends on trade: Stephen Waguespack

06 13, 2014 by The Times-Picayune

Louisiana's economy is growing at an impressive rate. In fact, since the 2008 recession, the state's economy has grown 50 percent faster than the national rate of GDP growth.

Many factors that have contributed to Louisiana's impressive economic growth, but chief among them is the state's robust export economy. In the face of national economic headwinds, Louisiana has propped up its economy through international trade. However, our state's economy may not stay healthy unless Congress takes action.

Trade agreements between the United States and foreign countries are necessary in order to lower legal hurdles, get rid of tariffs and open up new markets for American exports. Trade Promotion Authority (TPA) -- which expired in 2007 -- streamlines these agreements and helps ensure the United States will deliver on its trade promises. Congress must pass Trade Promotion Authority as soon as possible.

Without robust trade agreements, Louisiana's economy would collapse. In 2012, our state ranked in the top 10 in the country for export goods, valued at $44.2 billion.

Aside from exporting billions in goods, trade is vital for our state's job market. Some 522,000 Louisiana jobs -- more than one in five state workers -- are dependent on trade. And trade-related employment grew almost three times as fast as the state's total employment between 2004 and 2011. Trade-related jobs also pay well -- jobs in domestic exporting plants pay up to 18 percent more on average than similar jobs unrelated to exports.

Accessing new international markets is especially important because many of our trade partners are emerging economies that grow at a much faster rate than developed countries. That's why export growth in Louisiana has averaged 19.3 percent since 2002 -- nearly three times the state's average GDP growth.

There's no doubt that trade agreements create demand for American exports. In 2012, countries where America had free trade agreements purchased more than 10 times more goods per capita from Louisiana than countries without free trade agreements.

Trade agreements also lower the cost of imported goods - many of which are raw materials necessary for our state's manufacturing sector. Aside from creating jobs by lowering costs for our manufacturers, this makes basic goods more affordable for U.S. consumers. In fact, trade liberalization policies save the average Louisiana family $10,000 a year.

There's no good reason for Congress to continue to deny the president Trade Promotion Authority. Those opposed to free trade often argue that it results in fewer jobs at home as jobs are shipped overseas. But that's not the case - promotion authority would create jobs. According to the Office of the United States Trade Representative, every additional $1 billion in exports supports 5,000 jobs at home.

Although there's a divided Congress, partisan gridlock doesn't appear to be an obvious explanation as to why TPA has yet to be enacted. Both Democratic and Republican presidents since FDR have had that authority, until it lapsed in 2007.

TPA is also not a matter of ceding authority to President Obama. In practice, it's a consultation process between the president, Congress and American businesses.

Giving the president that authority would provide an economic boost to the bayou and beyond. If our state hopes to continue on its current path towards economic growth, Congress must make it a priority to pass TPA.

Stephen Waguespack is president of the Louisiana Association of Business and Industry.