As Congress debates how best to grow the American economy, business leaders know the services sector is vital to our economic growth and competitiveness. Trade agreements, like the Trans-Pacific Partnership (TPP), would significantly benefit the largest and fastest growing sector in the U.S. economy. Services account for 78 percent of total U.S. gross domestic product (GDP) and 82 percent of the American workforce.
Internationally, the United States is the world’s largest and most competitive services economy. Our services companies are global leaders across a wide-range of industries, exporting services worth more than $710 billion and generating a trade surplus of over $230 billion in 2014. These services exports supported an estimated 4.8 million jobs in 2014, including jobs in information technology, financial services, media and entertainment, express delivery, distribution, and telecommunications, among others. An incredibly important—and often overlooked—fact is that American services companies are increasingly essential to the competitiveness of our manufacturing companies and agricultural producers. There are few, if any, American companies that do not, in some way, rely on services to help them compete domestically and internationally.
While the U.S. is the world’s leading services exporter, international markets provide a vast opportunity for American services companies to grow and expand their businesses. Services account for a majority of U.S. GDP, but represent only 30 percent of our cross-border trade. Additionally, only 5 percent of American services companies export, demonstrating the opportunities for growth abroad. For the U.S. services sector to capitalize on its full potential, services companies and their employees need the TPP to open new markets and guarantee fair treatment. International rules established by this agreement are especially important for U.S. small- and medium-sized services companies that often do not have the resources to understand complex trade regulations or negotiate with foreign governments that discriminate against them.
The TPP’s potential for economic growth for U.S. services companies and their employees is documented. TPP countries already represent 25 percent of all U.S. services exports. In a recent study by the Peterson Institute for International Economics, economists forecasted U.S. service exports will increase by $149 billion due to the TPP, providing the biggest gains for any sector of our economy. The new market opportunities created by the TPP give American services companies and their employees the strong, 21st century trade rules needed to overcome foreign barriers to fair competition in the region.
Whether American services companies and their employees can tap into the tremendous growth opportunities created by the TPP will depend on one critically important event: Congress needs to ratify the TPP this year. If Congress fails to ratify the agreement, it will have missed a tremendous opportunity to foster American economic growth, create jobs, and promote services innovation.
Christine Bliss is president of the Coalition of Services Industries.
The views expressed by authors are their own and not the views of The Hill.