Trade Matters...
Now Call Your Congressman

Harold McGraw III

As President Bush enters his second term, he faces numerous challenges at home and abroad. Among the most important agenda items is U.S. international trade and investment policy, an area which must not be overlooked.

Throughout the 20th century, trade provided the fuel for this country's unprecedented economic expansion and, with more than three-quarters of the world's consumers living outside our borders, continues to hold promise for growth. In fact, between 1990 and 2000, export related jobs in the U.S. grew three times faster than job growth in the rest of the economy.

Moreover, in an age of global interdependence, trade and investment do more than benefit American businesses and workers. They also advance the interests of our trading partners, thereby helping millions of people -- and generations to follow -- to improve their standards of living dramatically.

In 2005, this country's commitment to international trade will be put to the test, and the president and Congress must respond unequivocally. Ahead are several critical Congressional votes and a broad array of administration bilateral and multilateral negotiations. In sum, these issues, summarized below, make 2005 a true crossroads year for U.S. international trade policy.

• Bilateral Free Trade Agreements. This year Congress will consider the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA), as well as FTAs with Bahrain, a key Middle Eastern ally. Several other important agreements are under negotiation.

  The passage of DR-CAFTA will immediately reduce restrictions on 80% of U.S. industrial exports and more than 50% of agricultural exports to the region, and will create a market for U.S. goods and services in Latin America that is second in size only to Mexico. In addition, DR-CAFTA is an economic tool that can help reduce poverty, promote growth and nurture the democratic progress of the past decade in Central America.

• WTO Membership. Congress will also consider whether the U.S. will continue to participate in the World Trade Organization. Since its creation in 1994, the WTO's rules-based trading system has benefited the American economy by providing a vehicle for the reduction of tariff and non-tariff barriers, opening markets for U.S. goods and services. It also requires our trading partners to play by a set of internationally agreed upon standards governing vital issues such as intellectual property protection.

  Continued participation in the WTO will allow the United States to advance its interests in the ongoing Doha Development Agenda. A successful Doha Round offers unrivaled opportunities to lower foreign trade barriers and increase U.S. access to international markets, thereby creating opportunities for U.S. businesses, workers and farmers.

• TPA Renewal. Trade Promotion Authority allows the president to submit free trade agreements to Congress for an up or down vote and is a key tool in creating economic opportunities through trade. This year the president must request a renewal of TPA, and Congress needs to remain committed to ensuring that the U.S. has this tool at its disposal.

  Since TPA was signed into law in 2002, Congress has ratified several significant trade agreements. Our agreement with Chile has increased exports to that country by 22.6% in 2003 and a further 24% in 2004. The U.S.-Singapore agreement has expanded our market access in goods, services and intellectual property, making Singapore our 12th largest trading partner. Our most recent agreement has eliminated the 5% Australian tariff on imports of U.S. manufactured goods.

Our continued economic leadership cannot be taken for granted in this increasingly competitive global economy. U.S. business must be ready to do its part to advance the trade agenda, which benefits firms of all sizes in all regions of our country.

We must work with our elected officials in Congress to communicate the benefits of liberalized trade, giving them the support they need at the grass-roots level to maintain U.S. leadership. We must also remind our citizens that global trade and investment provide a vital link among nations and advance our geopolitical as well as our economic interests.

How leaders in government, business and the workplace respond to the debate over trade in the next several months will reverberate for many years to come. We must advocate, as we have for decades, that the U.S. should be at the vanguard of promoting the free flow of goods, services and ideas in the 21st century economy.

Mr. McGraw is chairman, president & CEO of the McGraw-Hill Companies. and chairman of the Business Roundtable International Trade and Investment Task Force.

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