Exporting Our Way to a Stronger Economy
|October 18, 2011|
|President Barack Obama is signing three historic free trade agreements (FTAs) this week that will bode well for American companies and their employees. No state or its citizens will benefit more from these three agreements with Korea, Panama and Colombia than California. And for that we thank the U.S. Congress for passing the measure last week. Our agricultural products, computer technology and manufactured goods will now be more attractive to consumers in these nations because the existing tariffs on American products will be eliminated over time. Estimates are that the FTA with Korea alone will generate an additional $13 billion in economic trade for U.S. companies each year. |
Ninety-five percent of the customers in the world live outside the United States and more than 99 percent live outside of California. The purchasing power of the governments, consumers and businesses that make up the other 95 percent of the world’s customers is growing rapidly, which is why it's essential for American companies to focus on exporting their products in order to grow their businesses and hire more employees.
Last week, on three different days, I heard three economists speak about the future of the U.S. economy. All three — Ross DeVol with the Milken Institute, Elizabeth Stephenson a partner with McKinsey and Co. and Dr. Ira Kalish with Deloitte Research — said that exports have been a major factor in job growth in the United States and California during the last 18 months since the Great Recession. They also said that exports of products developed, designed and manufactured in the United States will be the key to U.S. economic growth over the long-term, and that educated employees, new technology and productivity gains will be essential for America to compete globally.
To emphasize his point about the importance of innovation and technology to the U.S. economy, Dr. Kalish noted that while the Apple iPhone is assembled in China, the value added in China is only $6.50 of the total cost of the final product. Most of the value-added work on the iPhone is done in the United States.
Yesterday, Lt. Gov. Gavin Newsom, California Senate President pro Tem Darrell Steinberg and California Assembly Speaker John Pérez were all in Los Angeles at the invitation of Cal State Los Angeles, the Los Angeles Economic Development Corporation and the Los Angeles Area Chamber of Commerce to discuss state initiatives to prioritize economic development and job creation. Growing exports is a major component of the Economic Growth and Competitiveness Agenda that Lt. Gov. Newsom outlined to the audience.
The new global economy can work in California’s favor if we focus on the innovation for which California is famous, invest in the education of our young people and eliminate the barriers that keep California companies from being nimble and cost competitive. The choice is ours.
And that's The Business Perspective.
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