Arizona’s growing tech industry, our border with Mexico, and proximity to West Coast ports make international trade a vitally important part of our state’s economy. In fact, Arizona exported $19.4 billion worth of goods in 2013, constituting more than 7 percent of Arizona’s GDP.
While this is great news for our state, there is much more we can do to capitalize on untapped economic potential and promote free trade. By removing trade barriers and increasing exports, we can create new businesses, develop better, high-paying jobs, and keep costs low for Arizona families.
One way to achieve this is to support international trade agreements, which have undoubtedly had a profound impact on the growth of Arizona’s economy. Since the North American Free Trade Agreement went into effect in 1994, Arizona’s exports to Canada and Mexico have increased by $5.7 billion or 236 percent. International trade supports more than one-in-five jobs in Arizona, which pay roughly 18 percent higher salaries. Imports to the state have also lowered the cost of raw materials, allowing Arizona companies to remain competitive and reducing costs for Arizona consumers. Simply put – free trade is good for Arizona, and it is good for America.
But despite concerted efforts by state and local officials to promote greater economic exchange with Mexico, Arizona has lagged behind the rest of the nation in embracing foreign trade. Last year, Arizona had the fourth-slowest growth rate among the top five exporting states to Mexico, and its growth rate is even lower when compared to states trading in other parts of the world.
Arizona cannot afford to neglect the vast opportunities that exist in opening trade with other countries that lie far from across the border.
That is why it is so important that Congress pass the Trade Promotion Authority (TPA), which would give U.S. trade negotiators fast-track negotiating authority to make trade agreements that create U.S. jobs, eliminate trade barriers, and set rules to level the playing field for U.S. companies.
For example, the TPA would help the United States to quickly advance the Trans-Pacific Partnership (TTP) and the Transatlantic Trade and Investment Partnership (TTIP), which would provide Arizona with an opportunity to open new markets for its goods and services in 11 Pacific countries and benefit Arizona workers, manufacturers, small businesses, farmers, and ranchers.
Further, fast-track negotiating authority would enable the United States to complete the world’s largest regional trade deal, the Trans-Pacific Partnership (TPP), in just two months. This deal would enable Arizona small businesses to trade with some of the most dynamic and fastest growing economies in the world.
While Arizona already has good trade ties with several of these countries, our state’s producers continue to pay steep tariffs as high as 70 percent and face other barriers on certain exports to most of the region. The TPP will remove these barriers, which in turn will increase Arizona exports and expand the number of Arizona producers who benefit from trade with these countries. The TPP will also generate over 17,000 new jobs in Arizona and significantly expand foreign direct investment in the state.
In today’s era of globalization, we limit our potential by trying to wall ourselves off to foreign competition. Competition makes us stronger and we must continue to compete or we will be left behind. A renewed commitment to free trade will help Arizona’s economy continue to grow and put Arizonans back to work.
– John McCain is the senior U.S. senator from Arizona.