June 12, 2018 3:04pm
Louisville’s success depends on open and free trade
In case you need another reminder of how the rest of the world continues to connect with the 15-county region that Greater Louisville Inc. represents, consider this: Earlier this year, UPS announced a new, around-the-world route beginning and ending in Louisville each day, with stops in Dubai, United Arab Emirates, Shenzhen, China, and Alaska.
And this new route serves as another reminder: The future of our region’s economy is tied largely to open, free and fair trade … not economic isolation and protectionism.
So, we need to pay attention to – and be alarmed by – rhetoric in Washington that sounds a lot like the protectionist mistakes of the early 20th century. Been there, done that.
If you live in Greater Louisville, this matters. UPS’s Louisville air hub pulls in products and produce from far flung places, driving Louisville’s growth as a food mecca and drastically improving the average consumer lifestyle by decreasing the real cost of goods.
Millions of dollars of goods pass through Louisville International Airport daily. Louisville International is the seventh busiest airport in the world for cargo traffic, handling more than 2.6 million metric tons of cargo last year. We’re outpacing metros like Tokyo, Paris, Los Angeles, and London.
America’s manufacturing renaissance extends from the integrated supply chains fostered by the North American Free Trade Agreement (NAFTA) that allowed firms to efficiently source a variety of goods from Canada and Mexico. In turn, American workers assemble final products for export to the rest of the world.
Global trade is about new opportunities too. Markets in Asia are expected to see hundreds of millions of new middle-class consumers emerge in the coming years. Kentucky’s signature industry, bourbon, is already benefiting from this trend. In fact, Vietnam has increased spirit imports by almost 180 percent over the past three years, despite a 45 percent tax at Vietnam’s border. Expanding markets like Vietnam translate to more investment and growth back here at home.
International agreements like the Trans Pacific Partnership could bring our world even closer together by breaking down old barriers. In fact, TPP would have eliminated tariffs on Kentucky bourbon as well as thousands of other American exports across numerous Asia-Pacific markets. Yet we walked away from TPP last spring, turning our backs on the opportunities of a truly global economy.
Walking away from the table on trade agreements with current and future allies allows someone else to write the rules, risking the viability of all American exports and fracturing the integrated North American manufacturing base. That makes this region less competitive. We will see fewer announcements from firms like UPS, Amazon, Ford, Toyota, and others that are choosing to invest in our people and potential. Companies will face difficult decisions between maintaining assembly operations here or relocating production to preserve supply chains. As any logistics expert can tell you, once supply strategies shift, it’s rare that they come back.
It’s not too late to change America’s current trajectory on trade. The Trump administration has already signaled a willingness to shift course by delaying imposing steel and aluminum tariffs on our allies. But, at the end of the day, the U-turn that we need to make won’t happen without business leaders speaking up and pointing Washington in the right direction.
As the voice of business in Greater Louisville—one of the world’s great logistics hubs and trade centers—GLI has no intention of letting the world pass us by. We will continue beating the drum for free trade and drowning out the sirens of protectionism. Our hope is that business leaders in other regions throughout the country will join us.