Hearing of the House Small Business Committee - Impact of Pending Free Trade Agreements on U.S. Small Business Panel I
Interview
Hearing of the House Small Business Committee - Impact of Pending Free Trade Agreements on U.S. Small Business Panel I
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REP. HANK JOHNSON (D-GA): Thank you, Madame Chair. I wish to commend you for holding this hearing, and I apologize for being late.
Ambassador, your testimony makes a convincing case for supporting these agreements. But as you know trade remains a controversial issue simply because there are winners and losers. Both sides make a compelling case either for or against trade agreements.
In the case of NAFTA for example, I know that there were 24,500 manufacturing jobs lost in the Atlanta area from 1995 through 2006, or nearly one out of six manufacturing jobs. Those were clearly losers. Others might cite the ballooning trade deficit and say all Americans are losers because of that.
What is your response to these critiques of past free trade agreements? And how have these critiques been addressed in the four pending agreements before us?
MR. VERONEAU: Thank you, Congressman.
The -- I mentioned in my testimony earlier 40 percent of the economic growth of the past year has been as a result of exports. So exports are a key part of our economy. I mean we import, we export, but unfortunately a lot of times the attention is on imports, that imports cost jobs. The reality is, imports are good for consumers, including small businesses, who have seen a lot of their costs moderated because of -- because of global competition. But exports are a tremendous source of job growth, as I said, 40 percent.
As far as manufacturing, there is a myth out there that the U.S. has lost manufacturing prowess, and it's simply not true. We produce 50 percent more today in manufactured goods that we did 10 years ago. We produce 30 percent more cars today in the United States than we did in 1980; 30 percent more. There are fewer people making them, and that is a function not of trade policy but a function of technology.
REP. JOHNSON: You're disagreeing with the -- with the job loss statistics that I cited?
MR. VERONEAU: I would -- I'm not knowledgeable enough, Congressman, to know if that number is wrong, but what I -- what my point I think goes more to is if there has been a loss of manufacturing jobs in Atlanta or elsewhere it is probably unfair to attribute them to trade policies.
I would say the vast majority of job losses in manufacturing in the United States and globally -- I mean even China, most people don't realize that China has lost millions of manufacturing jobs, millions, because of improvements in technology. And that, I hate to say, but that's a good thing. I mean the same reason that a third of us used to farm, a third of us used to farm; in this country today only 2 or 3 percent of us farm.
REP. JOHNSON: Point well taken. Point well taken.
MR. VERONEAU: And that's progress.
REP. JOHNSON: Well, let me ask you this question: Have there been any lessons that we've learned from the NAFTA and CAFTA agreement?
MR. VERONEAU: Well--
REP. JOHNSON: Or have they just been roaring successes and we just want to build on them? Have there been any negative consequences in your eyesight?
MR. VERONEAU: The -- honestly I think the lessons that I would say are, we need to liberalize and open up these markets more, not less, and in that sense I think there is -- I have -- I have learned no lesson that suggests, gee, maybe we should not have pursued these agreements, or open up the market.
If anything I would say, we need to do a better job, those of us in the government, those of us in the business community who support trade, frankly need to do a better job to explain to people why open trade is a good thing.
And I think in that sense we are not helping ourselves because the political environment, as you know better than I, for trade is getting more complicated, not less, and in that sense I would say a lesson learned for me has been not so much with the agreement, but with our advocacy for them and stepping up to say -- to explain to people why these are good for America.
REP. JOHNSON: Let me ask you this question: In your testimony you mentioned that trade agreements give American small businesses access to foreign government procurement contracts. Isn't it true that foreign companies in Peru, Colombia, Panama, et cetera, will be afforded that same opportunity for U.S. government contracts? And that being the case, what would stop a Chinese company for instance for -- from incorporating in Peru and then competing with our small businesses for U.S. government contracts?
MR. VERONEAU: Well, to take advantage of those -- of those procurement opportunities the goods have to be made in the -- in the country. So it wouldn't be enough that a -- a foreign company, Chinese or otherwise, simply purchased the Peruvian company. The goods have to be made there. So there is no opportunity to simply transship goods through a -- a Peruvian country -- company.
But I would say that, you know, our -- we already have a very open system frankly. Our procurement system is quite open. So again I see these agreements as a way to level the playing field. It's other countries around the world that have much more closed systems on their procurement.
So to me this is -- we're -- we're not giving up anything, we are gaining access that we don't currently have in the same way that on the tariff side our markets are already open, and this is an opportunity to get equal access to their markets.
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