Coalition Warns That Increased Trade Barriers Could Undermine U.S. Economy
Today the New Democrat Coalition, the largest coalition of centrist Democrats in the House and a leading coalition on trade issues, applauded President Obama's opposition to protectionism.
New Democratic leaders also were encouraged to see the Senate adjust its version of the bill and urged further action to ensure the final bill does not prompt retaliatory action from our trading partners and harm U.S. job creation.
The New Democrat Coalition has long been committed to enacting policies that expand economic growth and improve the competitive edge and productivity of the American economy, including the expansion of Americans' access to global markets.
While the economic recovery package must be focused on creating American jobs, the U.S. should avoid sending a protectionist message to our global trading partners and risk retaliatory measures that could undermine the American economy even further.
The Senate amendment approved yesterday addressed some of these concerns, but the New Democrat Coalition urged continued action to ensure remaining elements of the package do not further undermine our global trading relationships. Trade represented 28.6 percent of GDP in 2007. U.S. workers and businesses, particularly manufacturers, will be better positioned to emerge from the current difficult economic climate if we enact policies that would expand that section of the economy.
"There can be no greater priority today than saving and creating American jobs. The ‘Buy America' provision could have the unintended consequences of precipitating a trade war and stalling an economic recovery by delaying ‘shovel ready' projects that can immediately put Americans to work," Congresswoman Ellen Tauscher said. "I would urge my colleagues to examine other solutions like a research and development tax credit that would reward U.S.-based American companies."
"In a time of economic crisis the tendency to enact protectionist policies is strong, but the fact of the matter is that enacting new trade barriers would be counterproductive and against the interests of American workers and companies," said New Dem Vice-Chair, Congressman Adam Smith.
"The key to our long-term economic growth is competitiveness in a global market," said New Dem Vice-Chair, Congresswoman Melissa Bean. "Measures that would restrict trade will do nothing to solve the serious, long-term challenges facing our economy. We must execute a balanced trade policy that will promote domestic job growth through both domestic and foreign consumption."
"It has been proven that protectionist measures contributed to the start of the Great Depression," Rep. Kind said. "The last thing we need to do as a country right now is to repeat past mistakes and invite retaliation against U.S. products. Instead, we should focus on promoting U.S. innovation to create and grow jobs here."
"Protectionist reaction exacerbated our decline into the Great Depression with the Smoot Hawley Tariff Act. Let's learn from historical lessons, reject our baser instincts and forge ahead strategically in breaking down barriers to American products that create jobs here at home," said Rep. Jim Moran, a co-founder of the New Democrat Coalition.
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