On TPP, Politicians Trade Facts for Fear

CEOs Talk Trade | Tom Linebarger, Cummins & Mike Bertsche, Camcraft

July 11, 2016

It’s time to drop the political games and recognize the Trans-Pacific Partnership as an opportunity to support U.S. economic growth and high-quality American jobs.

The agreement will create opportunities to sell more U.S. goods and services to 11 Asia-Pacific countries. This region is already critical to America’s exports: TPP nations accounted for some 45% of all U.S. exported goods in 2014.

All told, TPP will eliminate more than 18,000 foreign tariffs on U.S. goods, opening markets to U.S. export growth. And because five TPP countries currently lack trade agreements with the United States, the deal will also open entirely new markets for American firms.

Just as important, the trade pact will put in place strong, enforceable rules for fair trade. For example, it will establish intellectual property protections for American companies and inventors and raise foreign labor and environmental standards. It also will discourage other countries from using government procurement and state-owned companies to put American firms and workers at a disadvantage.

In short, TPP will open access to millions of customers for U.S. goods and services while boosting foreign investment throughout the United States. The resulting U.S. exports and international investment here will expand U.S. economic growth and jobs.

To understand how trade supports companies of all sizes, consider the relationship between our two companies. Headquartered in Columbus, Indiana, Cummins’ 25,000 U.S. employees design, manufacture and distribute engines and related products that are powered by diesel and natural gas. In 2014, we exported approximately $3 billion in U.S.-made products.

As leaders of manufacturing companies large and small, we know how important trade and U.S. trade agreements like TPP are to the success of our companies and to businesses and farms across the United States.

These foreign sales don’t just benefit Cummins and its U.S. employees; they also help our 2,500 domestic suppliers, such as Camcraft. Camcraft is a small company based in Illinois. Its 330 employees manufacture high-precision components used in Cummins engines.

The relationship between our two companies shows how exports ripple through the U.S. economy in a supply chain generating billions of dollars in revenue and thousands of jobs.

Previous U.S. trade pacts offer evidence: America’s current trade partners purchase 13 times as many U.S. goods per capita than countries with which we don’t have trade agreements. Those purchases support U.S. jobs.

Contrary to the campaign rhetoric, U.S. jobs tied to trade also pay more than other jobs. According to a report by the Commerce Department, manufacturing jobs pay 18% more on average when tied to exports. The report also notes that foreign tariffs — like those TPP will eliminate — reduce the earnings of U.S. workers by as much as 12%.

When Congress takes up TPP, members should look beyond the divisive rhetoric of the presidential campaign and seize the opportunity to support growth and jobs in their home states. By approving TPP this year, Congress will enable American workers, businesses and farmers to sell more in international markets — reaping the benefits before our foreign competitors do.

Linebarger is chairman and CEO of Cummins Inc. and Chair of the Business Roundtable’s International Engagement Committee. Mike Bertsche is president & CEO of Camcraft.

View this piece in its original form published in the New York Daily News.