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Pennsylvania: Expanding Exports, Supporting Jobs Through Trade Agreements

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For almost 40 years, Congress has enacted Trade Promotion Authority (TPA) type laws to help guide presidents in pursuing trade agreements that support U.S. jobs, eliminate barriers to U.S. exports, and set rules to level the playing field for U.S. companies, farmers, and workers. In these laws, Congress has set high-standard objectives and priorities for U.S. trade negotiators and established a process for consulting with Congress and the public. Here, we examine the importance of trade agreements to the economy, specifically in the Commonwealth.

The Pennsylvania economy today is more dependent on global commerce than it has ever been. Total exports from Pennsylvania helped contribute to the record-setting value of U.S. goods and services exports in 2013, which reached $2.3 trillion. In 2011, nearly one-fifth (19.0 percent) of all manufacturing workers in Pennsylvania depended on exports for their jobs.

Of the companies that exported from Pennsylvania locations in 2011, 89.3 percent were small and medium sized enterprises with fewer than 500 employees.These firms generated over one-third (36.0 percent) of Pennsylvania’s total exports of merchandise in 2011. In fact, one of the most effective steps Congress can take
to promote this local economic growth is to facilitate international trade through the following trade deals:

Trans-Pacific Partnership (TPP)
TPP negotiations with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam center on creating a high-standard, regional agreement that opens new markets and knits together existing U.S. trade agreements in the Asia-Pacific region by addressing new and emerging issues. The United States exported $697.8 billion in goods to all TPP markets in 2013 (44 percent of total U.S. exports).

Pennsylvania’s exports could benefit from new market access as a result of Brunei, Japan, Malaysia, New Zealand, and Vietnam eliminating their tariffs as part of TPP. Efforts under TPP — to address unnecessary barriers to trade, increase transparency and certainty for businesses, and promote the rule of law throughout the region — could also benefit Pennsylvania’s exporters. TPP could further promote regional integration by providing companies the ability to access supply chains that span four continents and a dozen countries.

Transatlantic Trade and Investment Partnership (TTIP)
TTIP will be an ambitious, comprehensive, and highstandard trade and investment agreement that offers significant benefits for U.S. companies and workers through eliminating existing trade barriers and better enabling U.S. companies and workers to compete. TTIP will provide significant new opportunities for U.S. industry, as approximately one-fifth of all U.S. goods and services exports go to the European Union (EU).

Pennsylvania exported $9 billion annually in goods to the EU (2011-2013 average). The EU was Pennsylvania’s second largest export market. EU tariff elimination as part of TTIP would provide new market access that could benefit Pennsylvania’s exports. Exports from Pennsylvania could also benefit from efforts in TTIP to achieve new market access commitments in services and investment, improve the regulatory environment, and establish global best practices.

Trade in Services Agreement (TiSA)
A trade agreement focused exclusively on services, TiSA will encompass state-of-the-art trade rules aimed at promoting fair and open competition across a broad spectrum of service sectors. Presently, there are 50 participants in the TiSA negotiations, representing almost two-thirds of world trade in services and a combined services market exceeding $30 trillion, which is approximately half of the global economy.

Promoting the expansion of services that trade globally will pay dividends for the United States, with every $1 billion in services exports supporting an estimated 5,900 U.S. jobs. Service industries employ workers throughout the country and approximately three out of every four American workers nationwide.

An ambitious, high-standard international services agreement presents a tremendous opportunity to remove a range of barriers that face U.S. service exports, and thus boost U.S. economic growth and support additional jobs, including those in Pennsylvania.

Prepared by Trade Policy and Analysis, International Trade Administration, U.S. Department of Commerce. For more information, please see www.trade.gov/fta.