An Update on Trade

Wednesday, 21 October 2009 12:49

At AIADA, free trade is always on our minds.

Trade allows us to keep our businesses open and our workers employed. It also allows us to provide our customers with the variety of choices and value they expect as Americans.

This October, we saw a victory for free trade when the "Buy American" provision offered by Rep. Larry Kissell (D-N.C.) was stripped from the Energy and Water Appropriations bill. The provision would have required government automotive purchases to be limited to Chrysler, GM, and Ford brands. AIADA urged our members to contact Members of Congress in September, and you did. Because of your opposition to such divisive, protectionist language, the Kissell amendment was killed.

As happy as that makes us, we cannot afford to let down our guard.

Some legislators in Washington will continue to push their "Buy American" agendas. In response, dealers need to work together to educate the public on why protectionist legislation is a threat to our economy. The truth about trade and the auto industry can be easily lost in an emotionally-charged debate. It is our responsibility, to our customers and our employees, to make the facts available.

Facts like:

• Elimination of trade barriers to goods and services around the globe would raise global income by $2 trillion and U.S. income by almost $500 billion.
• America drives the world economy, but 95 percent of the world's consumers live outside of the United States.
• Manufactured exports support an estimated 5.2 million jobs in the United States, including 1 in 6 manufacturing jobs.
• U.S. jobs supported by exports pay an estimated 13 percent to 18 percent more than the U.S. national average.
• Today, U.S. annual incomes are $1 trillion higher, or $9,000 per household, due to increased trade liberalization since 1945.

If trade is restricted, our manufacturers will no longer be able to operate in the United States. Our customers will not be able to afford the tariffs place on the international brand vehicles. Our stores will be forced to close.

And it is not just dealers who will suffer if our businesses shut down. Communities of every size and in every region of this country rely on dealerships to act as a major employer and tax base, and to support local teams and charities. When dealerships go, they leave a vacuum that won't be filled in these difficult economic times.

An example I have used before is Tammy Darvish's Maryland-based dealership group, Darcars. Her 26 dealerships employ 1,860 people. In 2008, total payroll was $88,632,224. Total federal income tax withheld: $20,917,205.Total state income tax withheld: $4,795,003. Employer payroll taxes:  $6,381,520. Total paid to the 233 local vendors they do business with: $83,621,412. There is no replacing that kind of impact on a community, city, or state.

Trade keeps the dollars and the goods flowing. The benefits trickle down through every portion of American life. As an association, our purpose now it to make sure Congress doesn't build a dam against trade, and put us all out of work.

Russ Darrow, AIADA Chairman