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| October 25, 2001 | |||
Trade Promotion Authority Needed to Revive
High Tech and the Struggling Economy In the weeks following the September 11th terrorist attacks, Congress responded swiftly by authorizing the use of force to defend Americans and appropriating disaster relief to the victims and their families. Now, it's time for Congress to address the economic impact of the attacks. That means adopting a pro-growth stimulus package that encourages renewed investment and job creation. It also means maintaining our commitment to free and open trade, including reauthorizing Trade Promotion Authority (TPA) for the President.
Trade Promotion Authority ensures that trade agreements signed by the President receive expedited consideration here in Congress. It gives the President and our trading partners confidence that an agreement requiring changes in U.S. law would receive an up-or-down vote within a time certain.
While unfettered trade is the rising tide that lifts all boats, the high tech community, with its many high-paying, skilled jobs at stake, benefits more than most. It relies heavily upon trade and open borders to maintain its dominant position in the world economy. This sector was struggling prior to September 11th; now it's doing worse. For high tech, adoption of TPA is a vital part of a comprehensive package to help restore America's economic growth and help us get past the events of September 11th.
High Tech Economic Downturn
The economic downturn in the United States is a serious one. The magnitude of the economic slowdown was just beginning to be acknowledged as summer waned; unemployment was up, productivity was down. Then came September and an additional one-quarter million Americans lost their jobs, one-fifth of whom worked in high tech:
-- Revenue for U.S. technology sales - to include computers, semiconductors, and communications equipment - has fallen 35 percent from the beginning of the year.
-- 474,199 jobs in the high tech industry have been eliminated since the beginning of the year. Sector breakdown of eliminated jobs:
Telecommunications - 225,231
Computers - 131,658
Electronics - 117,310-- More than 47,250 jobs from the telecommunications, computer, and electronics industries have been eliminated in September alone.
-- At least 168 technology firms have issued earnings warnings for their respective third quarters.
-- When the markets reopened the Monday after the attacks, the technology-heavy NASDAQ started the week by dropping 6.82 points, falling to levels not seen since 1997.
Tech-Heavy NASDAQ Performance
(October 2000-October 2001)
Enhanced Exports: Essential to the High Tech Industry
America's high tech community has been hit hard in the past year. One means of helping to restore its health would be to continue to open foreign markets for exports.
-- U.S. firms exported $134 billion in information technology products in the year 2000.
-- U.S. technology companies export goods and services to more than 180 countries.
-- High tech industry jobs directly supported by exports earn hourly wages roughly 34 percent higher than the national average.
-- High tech exports accounted for 29 percent of the U.S. merchandise in 2000.
-- Exports drive more than one-fourth of the United States' economic growth.
U.S. Exports of Information Technology, 1996-2000
Without TPA, U.S. High Tech Will Be Left Behind
Absent the President having this specific authority to launch new trade negotiations, the United States - and our high tech industry - could lose ground in the fast-paced arena of international trade and investment expansion. The United States stands to sacrifice one of the prominent drivers of the U.S. export economy.
-- The European Union has 27 bilateral free trade and customs agreements, and is currently negotiating an additional 15.
-- Mexico has free trade agreements with 26 countries.
-- Of the 130-plus bilateral and regional free trade agreements (FTA) in force worldwide, only two include the United States (NAFTA, U.S.-Israel FTA).
With or without the United States, the rest of the world will continue to liberalize trade policies. If the United States refuses to be a part, U.S. exporters will struggle with an increasing competitive disadvantage as tariffs on American goods and services remain in place.
TPA is Key to a High Tech and Economic Recovery
America is committed to fighting a sustained war against terrorism. Part of that effort needs to focus on maintaining our economic strength. Bolstering the U.S. economy is vital, and opening markets will be an essential component to regaining a strong recovery.
With the entire world looking to this nation for economic and military leadership, reauthorization of this authority signals that the United States is not going to retreat from its commitment to open trade and to cutting-edge markets.
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