The U.S. Department of Commerce recently reported that incomes in Michigan grew more than 3 percent over the past year, putting the state in the top 10 for income growth.
A big reason for this boom? Exports have been climbing at a rapid clip.
Exports are an increasingly important part of Michigan’s economy. And they’re driving a broadly shared prosperity throughout the state.
Continued trade expansion depends on Congress and President Barack Obama working together on new trade agreements to open foreign markets for our exports and to renew Trade Promotion Authority, or TPA. Doing so will open important new markets to Michigan’s goods and services.
It’s true that trade agreements always generate some controversy. But there’s incontrovertible evidence that international trade provides tremendous benefits to businesses and their employees.
More than 38 million jobs in the United States depend on exports and imports. Exports to countries with which the United States has free-trade agreements have more than doubled over the past 10 years, totaling $710 billion in 2012.
Just as important, these agreements allow American firms to import foreign goods, chiefly consisting of raw materials, basic components and machinery that domestic companies can use to lower production costs, slash prices, and become more competitive in the global market.
Here in Michigan, local firms export 31 times more goods to free-trade agreement countries than to those with which the U.S. does not have a trade agreement.
Over the past four years, state exports have grown five times faster than our overall economy, according to University of Michigan-Flint economist Mark Perry. Exports accounted for more than 14 percent of the state’s Gross Domestic Product in 2012, up from 9.3 percent just three years earlier. And according to the U.S. Department of Commerce, the Detroit-Warren-Livonia metropolitan area is the third largest exporter in the United States.
More than 1 million Michigan jobs depend on international trade. And workers at export firms earn up to 18 percent more than those in similar jobs at non-export companies.
The benefits of trade go well beyond the auto industry. Michigan businesses involved in consumer services, construction, finance and science and technology services are also making tremendous gains because of increased international trade.
Michigan is doing what it can to open up new international markets. Last year, Michigan companies exported more than $3 billion worth of goods to China — a 21 percent increase from the year before — making it the state’s third-largest export market.
But now Congress has to help keep this engine of growth running.
Lawmakers need to pass modernized TPA, which is how Congress directs the administration on trade and new trade agreements. For the past 80-plus years, presidents — both Republican and Democratic — have had this authority, but it lapsed in 2007.
TPA helps establish U.S. negotiating objectives, allows for Congress, the president, and the private sector to collaborate on trade deals so that American companies and workers benefit, and creates a procedure for voting on those trade deals by Congress when complete.
Trade works for Michigan. Now it’s time for the Congress and the president to work together to renew Trade Promotion Authority and empower the White House to finalize new trade agreements. Further integrating Michigan into the world economy will spur new growth and jobs.
Ty Hicks is the Michigan state chair for Young Americans for Liberty.