More trade means more Minnesota jobs

Two encouraging recent economic reports provide more proof that the link between global trade and employment is critically important in Minnesota.

The state's unemployment rate has now dropped to its lowest level since May 2001 — long before the Great Recession hit with full force in 2009, according to the Minnesota Department of Employment and Economic Development (DEED).

Surging job growth pushed the state's jobless rate to 3.7 percent in November, well below the U.S. rate of 5.8 percent. Employers added 6,600 jobs during the month and 51,065 over the last year, with more than 35,000 filled in the last four months.

The professional and business services category led the way, adding 14,662 jobs over the past year. The manufacturing sector added 10,964 jobs.

Manufacturing, along with agriculture and mining, contributed to a record $5.5 billion in exports in the third quarter of 2014, according to a separate DEED report. That's a 5.8 percent jump from a year ago, superseding the 4.2 percent increase nationally over the same time frame.

The top export category was optic, medical and other products. That category rose 16 percent, to $938 million. It was followed by machinery, which declined 11 percent but still accounted for $860 million, and electrical machinery, which increased 11 percent to account for $713 million.

Top markets in international trade included neighboring Canada, which was up 5 percent to $1.55 billion, and Mexico, up a striking 57 percent to $640 million. The third-biggest market for Minnesota goods was China, which was down 6 percent to $555 million, and fourth was Japan, up 14 percent to $306 million.

Rising exports mean more jobs. Minnesota has the natural and human resources to compete at the highest global level, meaning that state workers can benefit from expanded free trade.

That's reason enough for Minnesota's congressional delegation to rally behind the Obama administration's efforts to advance two proposed free trade agreements: the Transatlantic Trade and Investment Partnership (T-TIP), which would ease trade between the United State and the 28-nation European Union, America's largest export market, and the Trans-Pacific Partnership (TPP), a proposed trade pact between the United States and Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The proposed agreements are still being negotiated, but ultimately will need to be approved by Congress. Previous trade pacts, including the North American Free Trade Agreement (NAFTA), which helped set the stage for the state's robust exports to Canada and Mexico, were granted trade promotion authority (or so-called "fast-track") status by Congress. Both the TPP and the T-TIP likely will need the same conditions not only to win support in Congress, but to convince other governments that riling their domestic, protectionist constituencies and risking political capital will not be in vain.

Beyond the economic benefits, advancing the free trade pacts can have positive geopolitical implications, too. The T-TIP would strengthen the Atlantic alliance at a time of direct threat from Russian provocation. And the TPP would strengthen Asian economies — and governments — that are warily eyeing the rise of China's economic, political and military influence in the Pacific.

Critics from the right and the left have aligned to try to thwart the proposed agreements. Some opponents don't want to give President Obama any kind of victory, regardless of the benefits. Others have justifiable concerns about labor, environmental and other standards.

We share some of those concerns. But advocating for fast-track authority does not mean that these issues will be ignored. Ultimately, a deal will pass only if it advances efforts to improve global standards.

But it should be remembered that trade pacts can and should also advance global standards of living, which allow societies to buy more Minnesota exports and create jobs here at home.

"We know that 75 percent of the world's buying power is outside of U.S. borders, and Minnesota products are high quality, so there's demand for these products," DEED Commissioner Katie Clark Sieben told an editorial writer. "We do really have a strong story to tell at the moment with the employment report and the trade report."

That story will only get better if Minnesota manufacturers, miners and farmers are granted greater access to more markets.