The Semiconductor Industry Association (SIA) this week today applauded Congress for approving the bipartisan Trade Promotion Authority (TPA) legislation. Although passage of the TPA puts the U.S. closer to a controversial Trans-Pacific Partnership (TPP) agreement, the SIA said the TPA “will strengthen the U.S. semiconductor industry and [the U.S.] economy by paving the way for passage of free trade agreements.”
The TPA empowers U.S. trade negotiators to reach final agreements consistent with negotiating objectives laid out by Congress, the SIA said in a statement. Trade negotiators are in a stronger position to forge good trade deals if their counterparts on the other side of the table understand a deal struck is a deal sealed. TPA requires that when Congress votes on relevant trade agreements, it must be done without amendment.
Passage of the TPA makes it easier for the Obama administration to push through the TPP, which many in the U.S. fear will have a negative impact on jobs and U.S. competitiveness. Similar sentiments were expressed during the negotiation of the North American Free Trade Act, or NAFTA. The TPP, according to the New York Times , " links 40 percent of the world’s economy — from Canada and Chile to Japan and Australia — in a web of rules governing Pacific commerce." Most of the objection around the TPP has to do with segments of the agreement that have not yet been made available to members of Congress and the public.
The SIA said the TPP, along with the Transatlantic Trade and Investment Partnership (TTIP), and a WTO Environmental Goods Agreement (EGA), are “important trade agreements that would result in billions of dollars in global trade of semiconductor products.” Without TPA, these agreements may never see the light of day.
Trade is especially important to the U.S. semiconductor industry, which relies on a global network of materials and equipment suppliers, R&D providers, and customers, the SIA said. In 2014, U.S. semiconductor company sales totaled $173 billion, representing over half the global market, and 82 percent of those sales were to customers outside the United States. Additionally, the semiconductor industry directly employs nearly 250,000 people in high-skilled, high-wage jobs in America. Since most of the U.S. semiconductor industry's customers are abroad, free trade is critical to creating and supporting these American jobs, the SIA said.
"Congressional approval of Trade Promotion Authority is a huge win for U.S. businesses and consumers and brings the United States back to the table to negotiate economy-boosting free trade agreements," SIA president and CEO John Neuffer said in a release. "TPA facilitates free trade, economic growth, and the spread of innovation. SIA applauds Congress for approving this much-needed legislation and appreciates the strong and determined leadership of Senate Finance Committee Chairman Orrin Hatch (R-Utah), Ranking Member Ron Wyden (D-Ore.), and House Ways and Means Committee Chairman Paul Ryan (R-Wis.), who introduced TPA and worked to get it across the goal line."
The SIA added that free trade is critical to the American economy, fostering the spread of innovation and commerce globally. TPA has been part of nearly every U.S. free trade agreement in existence, but it expired in 2007.
The House of Representatives passed TPA on June 18, the Senate approved it on June 24, and President Obama is expected to sign it into law in the coming days.