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April 11, 2018 at 5:00 am ET
Jobs. Jobs. Jobs.
The creation of jobs in America has long been a top policy priority. It is even more important as we look to grow the economy, increase wages, and prepare for our future. This goal has taken on a new flavor as recent conversations around the use of punitive tariffs have shined a spotlight on the role of trade policy in the creation of U.S. jobs.
President Donald Trump has focused on bringing production jobs back from overseas, using the lens of the trade deficit as the metric of success. But a better measure of success, especially in today’s global economy, would look beyond the jobs associated with production and consider instead all the jobs created at home by U.S. global value chains.
What are those jobs exactly?
The global value chain includes those jobs we traditionally associate with creation of a product – such as those in a factory or on a farm – as well as those positions involved in the conceiving of and delivery of those products – such as design, marketing, research and development, and sales. Simply put, the global value chain accounts for all the jobs that add value to the good or service sold in the global marketplace. These positions are essential to the creation or sale of a good or service. Moreover, the jobs are here in the United States and are usually high-paying, accounting for much of the value that you pay for at the register.
A recent study by the U.S. Global Value Chain Coalition found that about 75 percent of the retail value of an apparel article imported from abroad and sold in the U.S. comes directly from American ingenuity. This means that despite being physically sewn overseas, the vast majority of the value found in your T-shirt, jeans, dress or suit was created by Americans and supported American jobs such as quality assurance, social and import compliance, marketing, and web development. If this is the case for a T-shirt, imagine what the case is for the smartphone you carry or the car you drive.
So how do we grow these American job opportunities?
Late last month, Trump requested the renewal of his negotiating power under Trade Promotion Authority. Among other things, TPA allows the executive branch to negotiate trade agreements following guidance from Congress on priorities and negotiating objectives. Tapping into the global value chain is a primary TPA negotiating objective for both trade in goods and services.
This means we must negotiate and improve current and future agreements with U.S. global value chains – and the millions and millions of American jobs they create – in mind. We can no longer measure trade policies using antiquated mercantilist techniques like trade deficits. Instead, we should be guided by the realization that more trade means more economic opportunities as global value chains translate trading partnerships into U.S. jobs. This is essential, especially as we continue to play this game of chicken with China using punitive tariffs and as we renegotiate NAFTA.
American jobs do not come from protectionist policies. This method has been proven unsuccessful by previous administrations (e.g., Bush’s steel tariffs, Obama’s tire tariffs, and even Hoover’s Smoot-Hawley tariffs), hurting American workers, consumers and the overall economy. Rather, we can create more opportunities for Americans to do what they do best by eliminating trade barriers – at home and abroad – and letting American ingenuity, competitiveness, and leadership flourish.
Global value chains are good for America.
Rick Helfenbein is the president and CEO of the American Apparel & Footwear Association. Matthew Shay is the president and CEO of the National Retail Federation. Sandra Kennedy is the president of the Retail Industry Leaders Association. Julia K. Hughes is the president of the U.S. Fashion Industry Association.
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