Op-Ed: Free Trade Helps U.S. Jobs

Today, Peter Cleveland, Intel’s Vice President of Global Public Policy, published this op-ed in The Oregonian explaining how free trade helps U.S. jobs.  Intel is the largest private employer in Oregon, and the piece describes how Intel’s ability to sell into foreign markets helps support the manufacturing and engineering capacity in the state.

Intel is a strong supporter of both free trade and investment in the U.S.  We hope that Congress soon passes the three pending free trade agreements.

Free trade agreements: There is a vital link between foreign markets and Oregon jobs

By Peter Cleveland

According to a recent study commissioned by the Portland Business Alliance, one quarter of Oregon’s total manufacturing jobs in 2008 depended on exporting. For Intel Corp., the largest private employer in the state, foreign markets are the greatest driver of growth for the company. We depend on the ingenuity, education and experience of 16,000 Oregonians to manufacture our products here to ship and sell abroad.

Last quarter, more than half of Intel’s revenue came from emerging markets — places like Turkey, Brazil and Indonesia. With 95 percent of consumers living outside of the United States, our employees in Oregon, Arizona and New Mexico are manufacturing technology to power laptops, mobile devices, servers, automobile computers and more to be used around the globe.

To sell products in markets worldwide, the U.S. government negotiates free trade agreements (FTAs) with the governments of those counties. These agreements are critical to Intel’s ability to compete internationally. FTAs not only help American companies compete on price by reducing tariffs on products and services, but they also specify rules around strong intellectual property enforcement, e-commerce enablement, state-of-the-art public participation and technology standard setting. All of these are key components to success in new, distant markets around the globe.

President Barack Obama set a goal to double U.S. exports in five years as a means of sustaining and growing jobs domestically. Finding effective ways for American companies to access foreign markets should generate broad cooperation among policymakers inclined to shore up our economy and maintain manufacturing jobs in the United States.

The administration has finished negotiations with the South Korean government on the U.S.-Korea FTA, as well as agreements with the governments of Colombia and Panama. To level the economic playing field for Intel and others, Congress and the president ought to lay partisanship aside and approve these pacts, along with worker dislocation assistance, immediately after returning from the August recess period.

South Korea has become a very important market to U.S. technology industries. It is the United States’ seventh-largest trading partner, with U.S. exports totaling about $38 billion in 2010. However, the U.S. share of the Korean market has declined over the past several years; China, Japan and now Europe all enjoy greater market shares. In fact, the trade agreement between the European Union and Korea went into effect this month. As long as the U.S.-Korea FTA remains unapproved, U.S. companies exporting goods and services to Korea will do so at a distinct disadvantage. Time is of the essence.

Better market access in a global economy is a top priority, but it is important to know that countries and regions around the world, with which we have long-standing FTAs, have helped fuel the U.S. economy. Overseas consumer spending accounts for about 70 percent of total U.S. gross domestic product (GDP) growth and more than three-quarters of Intel’s revenue.

The value of exports and imports of goods and services meant $15 billion to the Portland region in 2008, according to the Portland Business Alliance study.

This is revenue that is put to good use in the United States. At Intel, we are able to build a new research and development facility, now under construction, at our Jones Farm campus in Hillsboro and a new facility announced in Chandler, Ariz., to manufacture our newest technology breakthrough — the 3-D Tri-Gate transistor. Combined with upgrades to existing factories, we are spending upward of $12 billion to create the most advanced manufacturing process in the country.

Intel is proud to be a leading U.S. manufacturer and part of the community fabric and culture in Oregon. To expand the economic pie for our state and the country, we believe that the three pending trade agreements ought to be passed in the next few weeks.

Peter Cleveland is vice president of global public policy at Intel Corp.

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