Earlier this year, GOP standard-bearers Paul Ryan and Ted Cruz penned an op-ed in the Wall Street Journal highlighting their support for the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership, two massive trade deals with Asia and Europe. Congressman Ryan and Senator Cruz built their argument on a simple premise: Trade is good for exports. "These two agreements," wrote Ryan and Cruz, "would mean greater access to a billion customers for American manufacturers, farmers and ranchers."
So it's curious that -- given this supposed emphasis on exports -- the party of Paul Ryan and Ted Cruz is now fighting hard to destroy one of our main instruments for promoting the sale of American products to foreign markets: the Export-Import bank. This 81-year-old institution, which helps U.S. firms finance export operations, sustained 164,000 export-related American jobs last year and has created or sustained 1.3 million private sector jobs since 2009. In sharp contrast to Ryan and Cruz's two beloved trade agreements with Asia and Europe -- which are nearly certain to cost American jobs and undercut workers' livelihoods -- the Export-Import Bank operates at no cost to taxpayers.
On June 30th, just as Congress was quietly passing legislation to "Fast Track" the trade agreements over widespread Democratic objections, GOP leaders allowed the Export-Import Bank's authorization to expire. The bank is now temporarily out of commission, and Republicans show no interest in allowing a vote to revive it.
When Franklin Roosevelt created the Export-Import bank during one of the darkest periods of the Great Depression, he was addressing the need for a coherent national economic strategy to promote job creation and livable wages. By providing loans at low interest rates to foreign entities to buy American goods, the federal government could, he reasoned, directly support domestic job creation and living standards in a cost-effective way. This vision has been borne out over the last eight decades. The bank had been an important part of our national economic strategy since foreign countries have often demanded financing as a precondition for importing American goods. Foreign competitors including China have created and expanded their own export-import banks to compete with the United States. Last year, the Export-Import bank actually returned $675 million to our federal Treasury, mostly through the interest and other fees it charges on its loans.
In rejecting federal export promotion tools, rejecting investments in highways and green energy, and rejecting essential funding for education and healthcare, the Republicans are left with just one element of an economic strategy: NAFTA-style trade agreements that force U.S. workers into direct competition with workers in countries like Vietnam, where the minimum wage runs below 60 cents per hour. As economists David Autor, David Dorn and Gordon Hanson demonstrated in their research on U.S.-China trade relations, increasing direct competition with large low-wage countries increases unemployment and reduces wages in the United States. Deals like the Trans-Pacific Partnership simply empower multinational corporations with maximum influence to shape rules and standards at the expense of everyone else. In short, under the GOP economic strategy, there's just one sure thing we'll export to the rest of the world: American jobs.
While quite a bit has changed in the 81 years since Franklin Roosevelt launched the Export-Import Bank, one fact remains the same: America needs a coherent national economic strategy focused on raising wages and living standards. We can implement such a strategy by investing in education, innovation, infrastructure, sensible export promotion, and a strong safety net--the genuine determinants of success in a competitive global economy. Having seen the consequences of the GOP's cut-and-run economics, Americans are ready for an affirmative agenda.