Trade Key Piece of Growing Regional Economy
Jeff Rea serves as CEO and president of the South Bend Regional Chamber of Commerce.
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowManufacturers in our region rely on customers from the region, across the state, throughout the country, and around the world. Foreign markets have proven to be fertile ground for local companies seeking to increase their market access and grow their customer base.
Indiana has become more dependent on exports than most states. Indiana’s economic output (GDP) ranks sixteenth in the country, but our dependency on exports ranks eighth. An increase in exports will bolster our economy and create new opportunities for businesses in our region.
Foreign trade can be controversial, with strong opinions from both sides of the political aisle. The issue is getting a lot of attention in the 2016 elections. Congress was poised to take action this year related to the Trade Promotion Authority (TPA) and the Trans Pacific Partnership (TPP), but likely now will postpone any decisions until after the 2016 elections.
Traditionally, the TPP trade deal has drawn support from business and agricultural organizations such as the National Association of Manufacturers, American Farm Bureau Federation, U.S. Chamber of Commerce, and opposition from labor and environmental groups such as AFL-CIO, Greenpeace, MoveOn.org. The 2016 presidential candidates remain divided on TPP.
Businesses in our region and across Indiana see that reducing tariffs and other trade barriers as a must on the Congressional to-do list. Indiana has one of the top business climates in the United States, and is now looking to Congress to do its part for help Hoosier business opportunities grow around the globe.
Trade is critical to our manufacturers. Indiana and our region in particular remain reliant on manufacturing. Today, it accounts for close to thirty percent of the total output in the state and employs over seventeen percent of the workforce. In 2014, $34.93 billion in manufactured goods were exported, $19.52 billion of those exports to our free trade agreement (FTA) partners.
Agriculture also remains a key driver of the economy, Indiana ranks eighth in the value of agriculture exports in the country. Our farmers are concerned that high tariffs could limit future growth opportunities and argue that lower tariffs could result in additional sales.
The numbers make it hard to understand why there isn’t more support for TPP. Currently, there are some three hundred five TPP companies with investment in Indiana. About 55 percent of Indiana goods set to be exported are bound for TPP Countries. Today, almost 300,000 Indiana jobs are supported by trade with TPP Countries. The goods exported from Indiana help support some 188,000 jobs across the United States. And more than $20 Billion of Indiana goods are exported to TPP partners.
Supporters and critics agree that the structure of TPP may not be perfect, but business leaders believe it will increase real incomes in America by $131 billion and boost exports by $357 billion by 2030. Indiana should benefit heavily from any such deal. Our regions should also capitalize.
Businesses believe there are a lot of other reasons to support TPP. They believe TPP will lead to the elimination of many taxes on exports, will add strong worker protections, will have strong environmental protections, and will help small businesses benefit from global trade.
You haven’t heard the end of the debate on trade. It’s unclear if, what, or when Congress might address the issue. Business leaders are hoping its sooner rather than later as increased trade can be a critical driver for our regional economy. You can help, contact Congress and ask them to help grow the Indiana economy by promoting new trade opportunities like the TPP.