Letter: Free-trade agreements critical to our economy

From: John Becker


Columbus, Indiana, is a compelling model for how business can strengthen America. As residents we must ensure Columbus’ rich civic ecosystem is sustained for future generations. I am concerned that President Trump’s trade rhetoric and policy initiatives against free trade agreements (FTAs) could undermine businesses that are the bedrock of our community. Free trade agreements that the U.S. has negotiated with 20 partner-countries are critical to our economic strength.

We’ve seen the Jan. 30 article in The Republic, based on a recent Brookings Institute study (January 2017), which says the Columbus area is the U.S. community with the most to lose if President Trump tears up our tariff and free trade agreements.

Over half of the goods and services produced in Columbus are exported. The Brookings study estimates that over 5,000 Columbus jobs are directly supported by exports, with over 15,000 relying indirectly on exports. For example: Cummins’ Walesboro factory exports most of its production to Mexico for installation in Ram pickup trucks that are then imported into the U.S. President Trump has threatened to tear up the North American Free Trade Agreement (NAFTA) between the U.S., Mexico and Canada and impose 20 to 35 percent tariffs on imports from Mexico.

What would happen to sales of Cummins-powered Ram trucks if their prices were increased 20 to 35 percent? What would the loss of Cummins’ Walesboro production and employment do to Columbus? Repeat these questions for each of the Columbus-area businesses and farms whose exports support the economic vitality of our community. Due to Trump administration threats, Mexico is already negotiating to replace imports of U.S. corn with corn from Argentina and Brazil.

The following are some relevant facts about the importance of FTAs from a 2014 U.S. Chamber of Commerce study:

1. The 20 U.S. FTA partners make up only 6 percent of the world’s population and 10 percent of the world’s economy, yet buy nearly 50 percent of our exports.

2. The U.S. has an overall trade surplus with our 20 FTA partners (we sell more to them than we buy), yet the president accuses FTAs of causing our trade deficit (worldwide, we buy more than we sell). The president is absolutely incorrect. Our trade deficit comes from trade with countries with whom we do not have FTAs.

3. According to U.S. Commerce Department research, manufacturing jobs tied to exports pay wages that are about 18 percent higher than those not tied to exports.

In 2014 the Manhattan Institute said, “(Columbus) is a high-quality community that remains affordable, pro-business, and which has navigated the transition to the global economy to-date in a way few other similarly situated cities did.”

Partly because of J. Irwin Miller, businesses here feel an innate civic duty to model unshakable ethics as well as promote the economic and social necessity of globalization and diversity. We have a chance to continue this legacy, and it begins with protecting and growing our FTAs, not tearing them up.