How trade deals would unleash investment in NC

As debate over international trade legislation boils in Washington, it is important to understand the effect trade has on local communities. For example, North Carolina is one of the top 10 states for jobs created by foreign companies, especially manufacturing jobs. These insourcing companies – such as Bosch, Novartis, Daimler Trucks, Food Lion and Volvo Group – directly support more than 200,000 jobs in the state. Given the fact that insourcing jobs pay 33 percent higher wages than the national average, it is time for policymakers in our nation’s capital to help us attract more global investment to the United States.

One of the best ways to attract more foreign direct investment is to support trade agreements with Europe and Asia. The countries that comprise the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP) account for nearly two-thirds of world trade and represent 90 percent of the insourcing dollars that flow into America. These trade agreements have the potential not only to increase U.S. exports to reach new markets but also to unleash global investment in the United States.

Insourcing companies play a critical role in America’s economy. They represent less than 1 percent of all U.S. businesses, but they employ 5.8 million Americans, pay U.S. workers an average salary of nearly $79,000, produce 5.5 percent of private-sector GDP, create 21 percent of U.S. exports and support 15 percent of all R&D performed by U.S. companies. Insourcing companies also pay 16 percent of all U.S. corporate income taxes.

Last year, 14 international companies announced plans to invest in new or expanded business operations in the Research Triangle Region. The $309.2 million in foreign investment arriving here this year represents 30 percent of the total industrial investment coming into the region. These announcements include Denmark’s Novozymes (Franklin County) and Xellia Pharmaceuticals (Wake County), Spain’s Grifols USA (Johnston County), Germany’s Bayer CropScience (Durham County), India’s HCL Technologies (Wake County), Canada’s Linamar Corporation (Wilson County), Teknion Studio Group (Johnston County), China’s Lenovo (Wake County) and Switzerland’s ABB (Wake County). Such investments will create more than 2,000 jobs in the region.

To protect the high-paying U.S. jobs that global investment supports, policymakers should do everything they can to make America more economically competitive. Embracing trade agreements with our European and Asian partners is a good first start.

The Organization for International Investment recently released a first-of-its-kind study that provides a quantitative look at how TTIP and TPP will encourage global investment and job creation in all 50 states.

According to OFII, once the two trade agreements are fully implemented, the United States will receive an estimated increase of $173 billion in global investment. Insourcing companies are estimated to increase their direct employment of U.S. workers by 400,000. An additional million workers would be employed by U.S. suppliers to these insourcing companies and businesses that expand in response to the increased spending of workers at both the insourcing companies and their U.S. suppliers. More than one-third of the estimated FDI increase will occur in the manufacturing sector.

For North Carolina, these trade agreements will translate into $5 billion in new FDI. Together, these agreements create 46,000 new FDI-supported jobs – more workers than the Dean Smith Center and Cameron Indoor Stadium combined could hold. More than 10,000 of those jobs would be in the manufacturing sector.

Recently, U.S. Sens. Thom Tillis and Richard Burr demonstrated their support for improving North Carolina’s economy by advancing bipartisan Trade Promotion Authority legislation. This was a critical first step to finalizing the TTIP and TPP agreements. We hope their colleagues in the House will follow their lead and help unleash more global investment in North Carolina and across the country.

This story was originally published June 11, 2015 at 5:07 PM with the headline "How trade deals would unleash investment in NC."