Trade Pacts to Boost US Exports, But Poor Infrastructure Risks Growth, Say Mayors and Panelists

“For every billion dollar increase in exports, it supports four to five thousand new jobs. And that’s why we are so focused on opening markets for Made in America exports,” said Froman. “When we are done with these agreements, TPP and TTIP, we will have free trade with somewhere between 65 and 75 percent of the world. And that puts us at the hub of a series of agreements that makes this the production platform of choice.” In order to secure the trade pacts, Froman pressed the need to pass the Trade Promotion Authority introduced in both the House and Senate on Jan. 9 (see 14011013).

Oakland Mayor Jean Quan said the focus on U.S. export expansion is delivering substantial growth to her city, primarily through increasing exports to East Asian powerhouses China, Japan and South Korea. “We are the major portal for agriculture and small electronics to China,” said Quan. “Our exports this year continue to grow, particularly to China, mostly meat and chicken.” The port of Oakland employs 72,000 in the region, said Quan. U.S. agricultural exports to TPP countries totaled $59.2 billion in 2012, up 36 percent from 2009, while U.S. manufactured exports reached $619 billion in 2012, up 52 percent over the same time period, according to a USTR fact sheet released at the event.

Failing port and commercial infrastructure, however, is threatening $270 billion annually in U.S. exports, said Jeff McKee, chief of navigation and operations at the U.S. Army Corps of Engineers. The Corps has estimated $30 billion in additional infrastructure funds are needed to make U.S. commerce competitive globally, said McKee, but Corps funding has largely flat-lined. The absence of commitment towards infrastructure improvement is jeopardizing U.S. commercial security, said McKee.

“It’s important in a global, competitive marketplace that we do have a vibrant export, as well as import, commerce. Transportation has a significant role in how competitive we are,” said McKee. “Our current state of infrastructure is generally in a “D” condition, as assessed by the American Society of Civil Engineers. Our channel depths are unable to maintain at authorized dimensions and having difficulty moving forward on some of the authorized projects, getting them to construction or to deepen or widen those channels.” Fifty percent of U.S. inland waterway locks are more than 50 years old, said McKee.

Infrastructural improvement is increasingly needed as Panama Canal expansion necessitates greater port depth and larger vessels, building on the recent trend of bigger ships, said McKee. The post-Panamax sized vessels hold 13,000 twenty-foot equivalent units (see 14010810). “Imports and exports are expected to increase significantly over the next 20 years or so. Containers are still projected to double over that point in time,” said McKee. “The mix of ships is certainly going to go increasingly towards our post-Panamax vessels. And there will be a cascade effect, where the larger vessels that are going to start calling on our deeper and larger ports are going to displace existing vessels calling there.”

Industry must also pay particular attention to changing trends in manufacturing in order to stay competitive, said Long Beach Mayor Bob Foster. “I think they’re going to have a great deal to do with import and export policy. The more the idea of 3-D printing catches on in a variety of areas, it's going to actually, I think, make manufacturing in the U.S. much more vital,” said Foster. “I think within 20 years, I know it’s a long time, I think we’ll see a dramatic difference, relative to the kinds of things we import and the kinds of things we export. We may make services even more important.” -- Brian Dabbs