5 reasons TI supports Trade Promotion Authority

Congress is on the verge of introducing a bipartisan bill to reinstate Trade Promotion Authority (TPA), which allows Congress and the Administration to better collaborate on U.S. trade negotiations and implement resulting trade agreements. As a leading global semiconductor company with more than 100,000 customers worldwide, TI strongly supports TPA legislation. Here are five reasons why:

1.) Open trade drives growth and helps TI reach our customers

Nearly 90 percent of TI’s revenue comes from overseas sales, with 61 percent of revenues from Asia and 18 percent from Europe.

Open trade is essential for TI to reach new customers emerging every day in countries around the world. It also allows our 100,000 customers reach new markets with their innovative products, creating even more growth opportunities for TI. In addition, open trade enables a robust supply chain that makes TI more competitive. 

The journey of a TI chip demonstrates how important the free flow of goods and services is to American competitiveness. For example, we might design and manufacture a chip in Texas. Then, it could go to any one of our overseas AT sites for assembly/test and packaging. Next, it might travel to our product distribution center in Singapore where it is shipped to TI Korea to be sold to a Korean electronics manufacturer. The manufacturer might then sell it to any number of countries. By the time the chip reaches the end consumer in the final product, it could have traveled literally the distance around the world.

2.) The semiconductor industry is an excellent example of success through trade

In 2013, there were over 703 billion semiconductors sold in the world, or roughly 99 per person on the planet. U.S. semiconductor companies account for about half of the $336B world semiconductor market.[i] 

Semiconductors have been one of the top three U.S. manufactured exports for the last fifteen years[ii]. The elimination of tariffs on semiconductors through trade agreements, such as the Information Technology Agreement in 1996, played an important role in expanding global markets for U.S. semiconductor firms, and has benefitted consumers and workers around the globe.

As a company and an industry, we have a unique and positive story to tell about international trade.

3.) TPA is necessary to conclude and secure a vote on new trade agreements

TPA facilitates open trade policies and new agreements to access more customers for goods and services. TPA will enable U.S. negotiators to conclude and Congress to implement new trade agreements such as the Trans-Pacific Partnership (TPP) and the Transatlantic Investment Partnership (T-TIP) that address 21^st century trade barriers and provide U.S. companies with greater access to key markets around the world, boosting growth and job creation.

Trade is not a zero sum game. TPP would open markets and increase trade among all the 12 countries around the Pacific Ocean that account for 40 percent of global GDP[iii] and 15 percent of global trade[iv]. The agreement benefits TI and other high-tech companies by increasing protection of intellectual property, addressing encryption and standards, and improving regulatory transparency.

Semiconductor and component exports from Texas to the five TPP countries without U.S. free trade agreements (Brunei, Japan, Malaysia, New Zealand, and Vietnam) accounted for $754M in 2013.[v]

The U.S. and the European Union represent nearly half of global GDP and 30 percent of goods trade[vi]. The T-TIP agreement will promote regulatory cooperation and protect cross-border data flows, beneficial provisions for TI and other U.S. firms.

The legislation outlines clear objectives that Congress sets for U.S. negotiators. TPA allows a completed trade agreement to receive a yes-or-no vote in Congress, with no amendments that would alter a carefully negotiated deal.

Every President since the 1930s until 2007 has had authority from Congress to negotiate trade agreements. Congress retains final authority to approve or reject trade agreements under TPA.

4.) 21^st century trade barriers require new legal tools

TPA was last passed in 2002 and expired in 2007. Since that time technologies have changed significantly and the economy has become increasingly global. We need updated legislation to address emerging 21^st century trade barriers such as intellectual property, technical standards, encryption, cross-border data flow, and forced technology transfer.

5.) TPA is a bipartisan issue

In his State of the Union Address, President Obama identified passage of TPA as a top priority, and key Republican and Democratic leaders in Congress also understand its importance. TPA is something that can get done this year.

TI is actively working to secure a favorable vote on the bill, sharing our perspective with the Members of Congress who represent our sites. We are amplifying our support through trade associations, as well as traditional and social media.

TI is a member of the Trade Benefits America Coalition, and is working closely with our trade associations such as the Semiconductor Industry Association, the Information Technology Industry Council, the Business Roundtable and National Association of Manufacturers, who are all aligned in support of the bill.

At a time where agreement on many other issues is rare, TPA provides an opportunity for Democrats and Republicans to work together. It’s time for Congress to act on TPA.