Congress, administration can boost economy with commitment to trade facilitation
by Nelson Balido
August 9, 2011
We now return you to your regularly scheduled programming…Now that the debt ceiling debate has cooled off – for the time being, anyway – and Congress has gone home until after Labor Day, it’s worth revisiting the legislation and policies that could give our nation’s trade community a leg up and could help this president and Congress inject some life back into this struggling economy.
The PORTS Act Introduced by Rep. Silvestre Reyes (D-Texas), this bill would dramatically increase staffing levels for Customs and Border Protection at our nation’s ports of entry.
There is perhaps no greater roadblock to trade efficiency than the lack of sufficient staff. Wherever I go along our borders – north and south – the one thing I hear consistently is that our ports are understaffed, leading to long delays in our commercial lanes as cargo waits to enter U.S. commerce.
Those delays result in real costs passed on to consumers and they diminish North America’s overall competitiveness as manufacturers’ ability to get products to market is compromised. According to a draft report prepared by the Department of Commerce, border delays in 2008 cost the U.S. economy nearly 26,000 jobs and $6 billion in output, $1.4 billion in wages, and $600 million in tax revenues annually. According to the same report, by 2017, average wait times could increase to nearly 100 minutes, costing the U.S. more than 54,000 jobs and $12 billion in output, $3 billion in wages and $1.2 billion in tax revenues annually. The cumulative loss in output due to border delays over the next ten years is estimated to be $86 billion.
Fatalistic? Perhaps. But we’re kidding ourselves if we think we can grow this economy without a real commitment to improving trade efficiency.
The Reyes bill is stuck in various subcommittees, which comes with the territory when your party is in the minority. But no matter the party affiliation, giving serious attention to our nation’s port staffing levels makes economic sense.
Coordinated Border Infrastructure funding A September 30 expiration of the previous highway funding levels under SAFETEA-LU is looming and there are two very different proposals emerging on what the next highway bill should look like.
In the House, Transportation Committee Chairman John Mica (R-Fla.) is calling for a six-year funding bill, which many in the business community, including the U.S. Chamber of Commerce, are opposing for its proposed deep cuts to transportation funding, which the Chamber says will cost the nation jobs.
In the Senate, Environment and Public Works Committee Chairman Sen. Barbara Boxer (D-Calif.) and Ranking Member James Inhofe (R-Okla.) have sketched out a two-year plan to fund transportation, but it’s murky, to say the least, where their plan will get the money it requires.
The BTA is calling for any funding package to include the Coordinated Border Infrastructure program. CBI funds are distributed to state departments of transportation for use in trade facilitation projects that are within 100 miles of an international border. These funds are of critical importance to states trying to upgrade their trade infrastructure and alleviate bottlenecks in and around their ports of entry.
Losing CBI funding could stop in their tracks projects designed to facilitate trade along with costing thousands of jobs in an economy struggling to emerge from this recession. CBI reduces congestion, improves trade efficiency and creates jobs.
Finalize new trade deals Finally, this Congress and the president can send a message that they’re serious about helping U.S. business access new markets by agreeing to implement trade deals with South Korea, Panama and Colombia.
The president has talked a lot about the need to double exports over a five-year period as a way to boost the economy, but new trade deals continue to languish while countries around the world are inking new agreements all the time.
This call for a commitment to free trade comes with a warning, however. The Senate Finance Committee is looking to tie a spike in the Merchandise Processing Fee to the adoption of the new agreements. Let’s not pass a fee hike on to importers when we should be finding ways to eliminate non-tariff barriers to free trade.
There’s a lot more Congress and the administration can do to help the economy that’s related to trade and our borders. But ultimately it takes a recognition that trade means jobs. More than 50 million Americans work for companies that engage in international trade, according to the U.S. Department of the Treasury.
If you’re for job creation, then you should be for trade.
Nelson Balido is the president of the Border Trade Alliance