Asia is expected to grow 5.4 percent next year according to the International Monetary Fund, more than double the expected growth of the U.S. For the U.S. to hit the Administration’s goal of three percent growth, we must tap high growth markets like Asia. The President’s current trip in Asia provides an ideal opportunity to advance our economic and strategic relationships. A core part of these relationships are trade deals that work for the modern American economy and expand U.S. trade opportunities.
As the CEO of Cummins, Inc., and the Chairman of Business Roundtable’s International Engagement Committee, and based on my experience running a global company with a large presence in Asia, I understand that expanding trade with this region is critical to strengthening jobs across the U.S.
This past quarter, our international sales increased 45 percent and one of our top international markets outside of North America is Asia. Strong global sales are why Cummins is hiring hundreds of positions in Indiana, Missouri, California, North Dakota, Alaska, and other states across the United States. When we are doing well globally, we are creating jobs and strengthening our communities here at home.
I understand the President and Congress have many priorities they are trying to address like tax and regulatory reform, which I support, but we cannot overlook the importance of trade. If we are going to maximize U.S. growth, jobs and competitiveness, tax and regulatory reform must work hand in hand with expanded U.S. trade opportunities. Terminating or weakening trade deals like NAFTA, or pursuing policies that restrict rather than expand free and fair trade, will hamper U.S. businesses’ ability to compete in the global economy and hurt the 41 million American workers and their families whose jobs are supported by trade.
The President has the opportunity to address three critical issues while he is in Asia: (1) affirming the U.S.’s commitment to expanding trade, (2) emphasizing the need to address unfair trade practices and unfair imports, and (3) advancing efforts to strengthen our trading relationships.
The U.S-Korea Free Trade Agreement (KORUS) is a prime example of the type of agreement we need to solidify and strengthen. The agreement is critical to maintaining an important national security relationship with a key ally during a time of uncertainty on the Korean Peninsula. KORUS is also important to U.S. economic growth and jobs. U.S. goods and services exports have increased 12 percent from 2011 to 2016 and our more than $150 billion in exports to South Korea support about 360,000 American jobs. We continue to urge the Korean government to address implementation issues under KORUS and market access issues faced by U.S. companies.
While recommitting to existing U.S. trade deals brings certainty to American businesses and workers, it is equally important to ensure enforcement of such agreements and U.S. trade laws. Business Roundtable looks forward to the U.S. Trade Representative’s Section 301 review of China’s forced technology transfer policies, localization requirements and failure to provide effective protection for U.S. intellectual property. The review provides an opportunity for the U.S. to work with China to address these critically important issues and promote a more mutually beneficial U.S.-China economic relationship.
America’s major foreign competitors — China and the European Union — are moving forward to expand their own trade opportunities in the Asia-Pacific, making it even more difficult for U.S. businesses to compete. In fact, the 11 remaining Trans-Pacific Partnership (TPP) countries are currently engaged in 27 separate trade negotiations with our competitors, while the U.S. is on the sidelines. Likewise, the Export-Import bank was limited to just $5 billion in loans in 2016 due to its lack of a quorum the last two years to consider and approve transactions above $10 million; China’s export credit agencies provided an estimated $670 billion in loans, guarantees, and insurance in just two years.
The President has the opportunity during his trip to Asia to affirm his commitment to promoting economic prosperity at home and maintaining the United States’ standing as a leader of the global economy. Preserving, promoting and expanding free and fair trade with Asian markets while addressing unfair trade will help promote the President’s goals of more U.S. growth, jobs and competitiveness.