Paul Ryan Speaks on The Rule of Law and the Global Economy
WASHINGTON — Today, Wisconsin's First District Congressman Paul Ryan delivered the following remarks at the Washington International Trade Association on his vision for expanded U.S. trade. Here are his remarks, as prepared for delivery.
"I think trade is absolutely vital—because our jobs depend on it. Twenty years ago, trade supported one out of every ten of our jobs. Now it’s one out of every five. This is our future. And there’s no turning back—because we can’t create more jobs if we don’t get more customers. And 96 percent of the world’s customers live outside the United States. So the way I see it, we’re going global for the same reason the pioneers went west: because that’s where the opportunity is.
"And we should welcome this change—because more trade means higher pay. Jobs that rely on trade pay on average 18 percent more than others. Take an example. Say you’re a blue-collar worker at a computer manufacturer. If that company also exports, you’ll make $11,000 more a year. And one reason is, in the big leagues, companies just have to be at the top of their game. They have to invest in their workers. They have to give you better equipment and better training—and, as a result, better pay. Otherwise, they’ll strike out. Competition is the thing. It is that very pressure—that little extra nudge—that pushes companies to do more and to pay more.
"And we’re heading into this future eyes wide open, as we should be. Just as we compete for other people’s business, they compete for ours. And just as new jobs will arise, other jobs will change. There’s no doubt about it: Global competition is tough; it’s persistent. And ultimately, that’s a good thing. That means when families shop for groceries or buy a car, they have better choices. And thanks to lower duties on imports, the average American family of four saves $10,000 a year.
"The thing about trade is, it can feel like a competition, where there’s always a winner and always a loser. But really, it’s more like a collaboration—because both sides succeed. Otherwise, they wouldn’t do it. More trade means more people—from every country—buying, selling, investing, creating—all working together to build a better world.
"So, trade is good for America. People have legitimate gripes with the global economy. But let’s be sure we’ve grabbed the right culprit. The problem isn’t when other countries play by the rules. It’s when they break the rules. Or rather, it’s when they rig the rules in their favor. And I would argue that the best solution to that is more trade agreements.
"Now, what trade agreements do is level the playing field. Our economy is already one of the most open in the world. So trade agreements make other countries take down barriers to our exports—tariffs, quotas, red tape. What a trade agreement says is, 'If you’ve got what I want, and I’ve got what you want, then let’s work something out. Let’s set up rules so it’s easier to trade. That way, we’ll both be better off.'
"And the numbers bear this out: Take our three most recent agreements. Where do our exports stand now? Vegetables to Korea, up 60 percent . . . iron and steel to Colombia, up 100 percent . . . household appliances to Panama, up 200 percent. In fact, if you add up all the countries that do not have agreements with us, our manufacturers run a trade deficit with them. But if you add up all the countries that do have an agreement with us, we run a surplus. So the numbers confirm what we already knew: The American worker can compete with anybody—if given a fair chance.
"And only a trade agreement can give you that fair chance. Here’s why. Say somebody steals your software. If you’re a big corporation, you’ve got money and lawyers; you can get to the bottom of it. But if you’re a small or medium-sized business—and 98 percent of our exporters are—you can’t afford to fight that. You’re out of luck—unless there’s an agreement . . . an enforceable agreement. Then, you can work with federal trade agencies to take up your case with that country. I’ve advocated with the USTR on behalf of my constituents who have faced just this type of issue. They can bring the full weight of the U.S. government to bear on your behalf. So, when there’s no agreement, it’s the law of the jungle. And when there is an agreement, it’s the rule of law. In other words, trade agreements set the rules of the global economy.
"And right now, other countries are rewriting those rules without us. Just consider: In the first ten years of this century, the countries of East Asia negotiated 48 trade agreements. The United States, on the other hand, negotiated just two in that region. It should be no surprise, then, that our share of what East Asia imported fell by 42 percent. Every one of our top competitors did better—every one. Look, you cannot put points on the board if you’re not on the field.
"And our rivals? Our rivals are playing for keeps. The Chinese are pursuing a lot of agreements. They’re talking to anyone who will listen—from South Korea and Australia to Norway. And it’s not free enterprise they’re pushing. Instead, it’s what they call 'state capitalism'—which we all know is Chinese for 'crony capitalism.' They say, 'Sure, we’ll take down some trade barriers. But we’re still going to force companies to store their data in China. And we’re still going to hand out sweetheart deals to government firms. And we’re still going to demand people fork over their intellectual property. And if you don’t like it, too bad.' The Chinese are walking tall, and now other countries are following their lead: Brazil, Argentina, Indonesia—to name a few.
"And we just cannot ignore the foreign policy implications here. When we complete trade agreements we strengthen our ties with other countries. Our economy is stronger and our national security is too. It’s easier to live in a neighborhood that’s friendly, prosperous, and free.
"Now, we’re also negotiating a deal with Europe. Our biggest beef with them is they impose food and safety standards based on self-interest instead of science—or sound policy. The way they write regulations is pretty opaque. And they’re a little prickly about their labeling—or to be more precise, their 'geographical indications.' So since a Wisconsin brat isn’t from Germany, they want us to label it a 'bratwurst-like sausage'—which to me makes about as much sense as saying the Green Bay Packers engage in a 'soccer-like activity.' It’s all a little humorous, but in recent talks, Canada agreed to accept some of these labeling standards for things like feta and fontina. The point is, if we do nothing, the red tape and barriers to our exports will only multiply.
"Nobody negotiates with an empty seat. If we don’t write the rules of the global economy, somebody else will—somebody who may not have our best interests at heart. And if we don’t like the way the global economy works, then we have to get out there and change it.
"Because it’s not just the goods and services we care about. It’s the people too. Nothing has done more to lift people out of poverty around the world than free enterprise. Nothing has given more people a better chance to reach their full potential. But this is an idea that needs defending—because not every country shares our way of life, or even understands it.
"A few years back, a foreign politician was talking to an American journalist. And the first question he asked was, 'Here in the United States, why do you not have this phenomenon of passing money under the table?' The journalist explained that in our country, the way to get ahead isn’t to grease palms or cut corners—but to make an honest living. Competition 'is the only real cure for corruption,' he said. So what we’re offering the world is not just an economic vision; it’s a moral vision too. And it’s our job to make that vision a reality.
"Luckily, we have an opportunity to do just that. Right now, we’re negotiating several big trade agreements. First, there’s the Trans-Pacific Partnership with our friends in Asia. Then there’s the Trans-Atlantic Trade and Investment Partnership with our friends in Europe. And finally, there’s the Trade in Services Agreement and the Environmental Goods Agreement, with countries around the world. These agreements could bring huge benefits to our country. TPP and TTIP could give us access to over 1 billion customers and two-thirds of the global economy.
"All negotiations are ongoing, and I don’t want to presume the outcome now. But all agreements must win Congress’s support. So I want to explain what I’m looking for. If I had to sum up my approach, it would be: Aim high. Go for the gold. Take down as many barriers as possible. In fact, I would rather fewer countries signed on if it meant we took down more barriers overall.
"So for TPP, Japan and Canada just have to lower their agricultural tariffs. You know, in some cases, Japan’s tariffs reach as high as 700 percent. And Canada has big restrictions on dairy, poultry, and egg products. Those have to go. And if any of the 12 countries currently in the talks think our standards are too high, well, I’d complete the agreement without them and invite them to join it later.
"For TTIP, the European Union must eliminate all tariffs—every one of them—just as they promised at the outset. And they must go further. They must address those unjustified regulations. Labels are labels—they’re meant to inform, not to frighten. And regulations are meant to keep people safe, not to keep politicians in office. The way I see it, this is their opportunity to set up a system that’s transparent, coherent, and first-rate. And any agreement must include strong protections for cross-border data flows, investment, financial services, and intellectual property rights.
"Now for TiSA, we need to think big. We need to go beyond signing countries up for an ancient 20-year-old deal, the General Agreement on Trade in Services—which was signed in the days of bicycle messengers. We need to push countries to do more. And only countries with a good record of fulfilling trade commitments should get to join.
"And we’ve got to keep on trucking at the WTO [World Trade Organization]. First, we’ve got to implement the Trade Facilitation Agreement. That alone could add up to $1 trillion to the global economy. Next, there’s the Environmental Goods Agreement. This is a great opportunity to tear down barriers to environmental goods—a nearly $1 trillion market and growing. We’ve got to expand the Information Technology Agreement, so we can keep our edge in this crucial sector. We’ve got to look for all opportunities to take down barriers for all members of the WTO, especially the major emerging economies. And we’ve got to keep using the dispute-settlement process to enforce our rights.
"But before we can conclude any of these deals, there’s one thing we have to do: And that’s pass trade promotion authority. Here’s the issue: When the United States sits down at the negotiating table, every country at that table has to be able to trust us. They have to know that the deal the administration wants is the deal Congress wants—because if our trading partners don’t trust the administration—if they think it will make commitments that Congress will undo later—they won’t make concessions. Why run the risk for no reason?
"On the other hand, once our trading partners know we’re trustworthy—once they can see we’re negotiating in good faith—they’ll be more willing to make concessions. That’s why we have to pass TPA before negotiations are complete. To get the best deal possible, we have to be in the best position possible. We can’t negotiate with ourselves. We have to maintain a united front.
"Now, I am not saying to enhance our leverage we have to enhance the administration’s power—far from it. What I’m saying is this bill would enhance Congress’s power. TPA empowers Congress.
"Here’s how. Nothing stops the administration from negotiating a deal without our input. So, if we waited till after the negotiations are done to get involved—if we simply reacted to what the administration put in front of us—we might kill the deal. That means we have to get involved before the deal is done, not after it’s finished. We have to be proactive, not reactive.
"That’s what TPA does. We call this process 'trade promotion authority.' But I think of it more as a contract. We say to the administration, if you want this up-or-down vote, you have to meet three requirements: Number one, you have to follow our guidelines. Number two, you have to talk to us. And number three, you have to remember: We get the final say.
"We simply can’t get the best deals without TPA. That’s why we’ve got to pass it as soon as possible. And that’s why the President has to show some leadership on this. Completing these trade deals is my No. 1 priority. And in the meantime, there are a few other things on our to-do list.
"First, reauthorize the GSP [Generalized System of Preferences]. Many small businesses need this program to stay competitive.
"Second, pass a seamless, timely renewal of the African Growth and Opportunity Act—ASAP. This program has helped reformers promote good government in Africa and helped free enterprise bring the countries of Africa together—creating opportunity across the continent.
"Both programs would let developing countries send their products to our shores duty-free. These bills would say to the developing world: 'Don’t bother with crony capitalism. Free enterprise—that’s the way to go.'
"Third, find a way forward for the Miscellaneous Tariff Bill. To me, this is just common sense. This bill would eliminate duties on hundreds of products that we don’t even make in this country—and that our manufacturers need to make their own products.
"Finally, pass the Customs Trade Facilitation and Enforcement Act. Congressman Kevin Brady has done solid work on this bill. It would streamline our customs procedures and enforce our trade laws. And Congressman Charles Boustany has come up with a creative way to fight trade remedy evasion. This is important legislation, and we’ve got to get it done.
"So, we’ve got quite a list. But we can’t lose sight of the bigger picture—of what we’re doing and why—because it’s not just our economy that’s on the line. It’s our credibility. There’s no question it’s taken a beating in the last few years. We’ve left the world wondering, 'Does the United States have staying power? Will it stick it out?' Finishing these trade deals would emphatically say, 'Yes.' Yes, you can count on the United States. We will be there. We won’t abandon the field. We will stick up for free enterprise and free people.
"The world still looks to our example. On the big questions of the day, they listen for our answer. And when it comes to this question—the future of the global economy—we have to pronounce our answer clearly and without hesitation: Only in the free-enterprise system is it true that 'the condition of your birth does not determine the outcome of your life.' The American Idea—that, without question, is our most valuable export. Thank you."