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Opposing trade agreements is dangerous for the economy

A dock worker directs the loading of shipping containers onto CMA CGM SA's Benjamin Franklin container ship docked at the Guangzhou Nansha Container Port in Guangzhou, China.
Qilai Shen | Bloomberg | Getty Images
A dock worker directs the loading of shipping containers onto CMA CGM SA's Benjamin Franklin container ship docked at the Guangzhou Nansha Container Port in Guangzhou, China.

International trade is getting its fair share of attention this campaign season. Unfortunately it's not getting a fair shake. Candidates from both parties express caution or outright opposition to trade and our country's trade agreements. At FedEx, we believe they do so to the detriment of our country's economy and workforce.

The fact is trade is good for – and critical to – the American economy. Exports create new markets for American-made products while imports help American families stretch their budgets by providing more choices and lower prices. Although the U.S. is the world's largest economy, 92 percent of global economic growth and 80 percent of the world's purchasing power are outside of the U.S., according to the U.S. Chamber of Commerce.

That means that trading with the world isn't an option. It's a necessity.

Listening to the rhetoric of the campaign, you might be tempted to think trade only benefits big business. That is absolutely not the case. Trade benefits businesses of all sizes, but small- and medium-sized businesses (SMEs) are the biggest beneficiaries.

A recent FedEx survey of over 1,000 small business leaders confirms that SMEs that export tend to grow faster and create more jobs than those that do not trade internationally. With ecommerce expected to exceed $3.5 trillion globally in the next three years, even a micro-sized company can connect to customers around the world.

"When you hear about ripping up trade deals, raising tariffs on imports or abandoning opportunities like the Trans-Pacific Partnership – that simply will not grow our economy. The risk is that formidable trade barriers and even more tariffs would be put into place, and American workers will pay the price."

No other trade issue has received as much attention this year as the Trans-Pacific Partnership, the trade agreement negotiated between the U.S. and 11 other countries, which represents over 480 million potential customers for U.S. businesses, according to the U.S. Chamber of Commerce. The agreement will streamline trade, reduce barriers and create new opportunities for small- and medium-sized companies. It addresses issues critical to the digital economy – issues like e-commerce and electronic data flows.

One of the most powerful benefits of TPP is that it will eliminate 18,000 foreign tariffs currently assessed on American-made products, according to the White House. America's workers and businesses need the TPP. Without it, those tariffs remain in place, making us less competitive by the day.

Even worse, the U.S. will be put at an increasing disadvantage as other countries negotiate agreements that exclude us. Without active U.S. involvement in this growing economic region, other nations will continue to move forward and create agreements that shut out our interests and paper over trade rules.

We benefit from America's trade agreements. The U.S. trade deficit is often cited by opponents as the principal reason why the U.S. should avoid new trade agreements. But it's the opposite. America's 20 trade agreement partners in recent years have purchased nearly half of all U.S. exports and the U.S. actually has a trade surplus with our trade agreement partners. In reality, trade agreements are the solution to trade deficit, not the problem

When you hear about ripping up trade deals, raising tariffs on imports or abandoning opportunities like the Trans-Pacific Partnership – that simply will not grow our economy. Choosing that road is a dead-end as other countries will continue to advance their own economic interests as America watches from the sidelines. The risk is that formidable trade barriers and even more tariffs would be put into place, and American workers will pay the price.

Expanding trade opportunities for Americans has been a bipartisan pursuit since this country started. I'm hopeful that it will continue to be, after the political dust settles following the election. In fact, I'm counting on it. This country's businesses, particularly small- and medium-sized ones, are counting on it, too.

Commentary by Michael L. Ducker, FedEx Freight president and CEO.

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