We recently had the opportunity to meet with business leaders in Miami and lay out our case for how exports support good paying jobs, increase economic growth, and allow businesses in the metropolitan area and the state to reach the 95 percent of consumers who live outside of our borders.
But maybe the most compelling reason to double down on exports is to respond to a dramatically changing global economy.
The evolution in today’s global economy is being driven by three distinct trends, which will all converge between now and 2030, to create a market that will require us to fundamentally expand our export footprint.
First, between now and 2030, we will witness a massive explosion in global demand.
The size of the global middle class will reach 4.9 billion over the next 15 years (up from 1.8 billion in 2009) according to the Organization for Economic Cooperation and Development. The majority of that middle class will be in the Asia-Pacific, 2.7 billion consumers.
While North American middle class consumers will increase during this time, their global share will decrease from 26 percent in 2009 to 10 percent, according to the Brookings Institution.
Given this reality, American businesses will have no choice but to target more global consumers to remain competitive. So they will need strong trade agreements to ensure market access and a level playing field.
And because the strong dollar will raise the cost of our goods and services, trade agreements will be essential to removing tariffs and subsidies and ensuring our exports are price competitive.
That includes the Trans-Pacific Partnership or TPP, which will allow businesses, notably small and medium-sized firms, to reach consumers in 11 Asia-Pacific nations. (TPP partner markets today already represent 40 percent of global GDP.)
Second, between now and 2030, we will witness a dramatic increase in energy consumption.
Global energy demand is projected to increase by as much as 35 percent, according to the New Climate Economy report released by the Global Commission on Energy and Climate. Private sector investment in renewable energy to meet that demand is projected to reach $7 trillion between now and 2030.
This greater demand will produce an unprecedented market for our energy exports, including our state of the art renewable energy technology (e.g. wind, solar, geothermal). Trade agreements will remove barriers to our clean energy exports, which will be essential to our businesses and to reducing carbon emissions.
Third, between now and 2030, we expect to see dramatic growth in advanced manufacturing as a result of the digital economy.
From crowdsourcing to 3D printing, U.S. manufacturers will be able to bring goods to market easier, faster, and cheaper than ever before. Expanding exports will create new outlets to support this new supply while controlling excess inventory.
The U.S. cannot wait until 2030 to adjust to these trends.
Neither can Florida, given that 95 percent of the state’s exporters are small and medium sized firms (nearly 59,000 companies) and exports support nearly 275,000 Florida jobs.
And neither can the Miami metropolitan area, which carries 67 percent of the state’s export load, roughly $41 billion in goods shipped.
That is why Congress should pass trade promotion legislation as the President has called for.
Trade promotion legislation ensures that a successfully negotiated trade agreement will not be held up by amendments when it goes to Congress for a final vote. This would give U.S. trading partners the confidence to put their final offers on the table. And it would give our negotiators principal authority to get the best possible deal for American businesses and workers.
This legislation also empowers Congress to determine the priorities and objectives the administration must pursue upon entering trade negotiations. This will ensure that any deal will include high standards to promote the values that should define 21st century global commerce: fair wages, safe workplaces, and environmental protection.
Trade promotion legislation has catalyzed the trade agreements that helped produce the 11.7 million American export-supported jobs we have today, which we know pay 13 percent to 18 percent higher wages than non-export supported jobs.
Trade promotion legislation has long been a source of deep bipartisan support, and Congress has passed this measure for every Republican and Democratic president between 1934 and 2007.
Whether it was confronting the Great Depression of the 1930s or the rise of emerging and developing economies, it has provided presidents an essential tool to adjust to the dramatic challenges of the day.
That is why Congress must pass this legislation and give President Obama an essential tool to help the country not only adjust to a new global economy, which will be barely recognizable 15 years from now, but set the stage for our continuing prosperity for generations to come.
Stefan M. Selig is U.S. Under Secretary of Commerce, and Charles H. Rivkin is Assistant Secretary of State for Economic and Business Affairs.