World leaders gathered last week in Davos, Switzerland, for the annual World Economic Forum, where evidence of the realities and opportunities of our global economy were on full display. President Trump attended the forum and heard from many leaders eager to do business with America. While they expressed hope that America will strengthen its trade ties, they also made it clear that key pacts would move forward even without our involvement.
One major announcement came from Canadian Prime Minister Justin Trudeau, who revealed that the 11 nations involved in the Trans-Pacific Partnership (TPP) negotiations had reached a deal without the U.S. After the Trump administration formally withdrew from the TPP last year, the future of the pact seemed in doubt—until now. The willingness of the other 11 nations to continue without us underscores a basic truth: World trade is moving forward. The question is simply whether we will share in its benefits.
At the U.S. Chamber of Commerce, we know that 95% of potential customers for our businesses live outside of the U.S. It’s through engaging in trade talks—not turning away from them—that we maximize the potential and minimize the downsides of globalization. It’s how we set the terms of trade.
As we have learned before, if America is not leading on trade, it is falling behind. The TPP announcement in Davos was a powerful reminder of this, but it is not the only reminder. Last year the European Union inked major trade pacts with nations such as Japan and Canada that included powerful provisions aimed at increasing their competitiveness in industries critical to the American economy. If our leaders don’t catch up with similar agreements, our economy may soon fall behind.
This highlights the importance of modernizing the North American Free Trade Agreement (NAFTA) and addressing implementation concerns relating to the U.S.-Korea Free Trade Agreement (KORUS). Success on these fronts would be a boost to millions of American businesses of every size and sector that export to these crucial markets. But if these talks fail, other nations will surge ahead to fill the gap we leave behind, leading to probable job loss in America.
Our nation cannot afford to ignore the fundamental reality of our interconnected world. The Chamber will continue to advocate for free, fair, and reciprocal trade in the months ahead, especially regarding NAFTA. And we will continue to remind our leaders of the stakes.