TCS Daily


Trade Promotion Authority: High-Tech's Key Component for Competitiveness

By James K. Glassman - July 16, 2001 12:00 AM

Imagine joining the two most potent forces in the world economy: the U.S. technological revolution and the global marketplace. That's the promise that Trade Promotion Authority (TPA) holds out to America's high-tech companies. TPA is essential for the president to negotiate with foreign countries to lower tariffs, but it's in serious jeopardy -- in large part because of Old Economy thinking and the power of entrenched interests.

The high-tech industry is already the country's leading importer and exporter, not to mention its largest direct investor overseas. Many Americans are surprised to learn that quintessential U.S. high-tech firms garner more than half their revenues abroad. Foreign buyers account for 59 percent of total sales for Intel, 58 percent for IBM, 56 percent for Hewlett-Packard.

Even so, there remains an enormous amount of room for such businesses to continue enjoying explosive levels of growth, helping the rest of the U.S. economy prosper -- but only if they can gain access to new markets.

Some 96 percent of the world's people live outside our borders, and most are only starting to discover the wonders of the Internet. Just 3 percent of Latin American households enjoy access to the web (compared to about half of U.S. families). America's high-tech firms need to be free to help the rest of the world join the New Economy - and to share in the proceeds when it does.

American companies, however, may find themselves locked out of this rich opportunity. It has been seven years since the White House had the ability to negotiate international trade pacts and then submit them to Congress for an up-or-down vote. Trade Promotion Authority (then called "fast-track" authority) lapsed in the early years of the Clinton Administration and was never renewed.

During that time, our foreign competitors have taken maximum advantage of international trade liberalization. There are roughly 130 free-trade agreements in place around the world, but the United States is party to just two of them -- one with Canada and Mexico, and another with Israel. The European Union, by contrast, has struck deals with 27 countries in recent years and has another 15 awaiting final approval.

American technology companies could easily lose their current advantage if they face higher tariffs than their foreign competitors -- competitors whose governments have had the foresight to tilt the playing field to their own advantage.

U.S. firms face a long list of obstacles in the global marketplace: not only soaring tariffs on information technology products, scientific instruments, and medical equipment, but also regulatory barriers to trade in information technology and communications products. TPA will help destroy those obstacles and ensure fair treatment for electronically delivered goods and services and full market access for industries essential to supporting e-commerce transactions, including telecommunications, computer, advertising, financial, distribution, and express-delivery services.

That's only a partial list, and these complicated issues will require detailed talks even in the best of circumstances. Yet other countries currently aren't willing to bargain seriously with our government. As European Union trade commissioner Pascal Lamy observed in March, "If [TPA] is denied by Congress, it would be hard for the U.S. administration to establish itself as a credible negotiating partner."

Why is TPA so important? Simply because nobody wants to spend months in grueling negotiations to fashion a deal with U.S. trade officials, only to have it sabotaged by a small number of congressional politicians representing special interests.

"I'm at the table now -- every day --negotiating with countries from around the world," America's own top trade official, Robert Zoellick, said in June. "They have the full authority to negotiate for their nations' interest. I need it, too. So now it is time. Not next year. Not later this year. But now."

The difference between success and failure in business is often the result of how quickly a company grabs opportunities. The men and women of America's warp-speed technology industry understand that essential truth. For them, every day that passes without Trade Promotion Authority represents another lost opportunity. Millions of employees and shareholders deserve better.

There's a single way to ensure our country's high-tech companies remain the best in the world: Let them do business there in the first place by approving TPA.
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