Decreasing support for free trade in the U.S. and elsewhere could compound economic problems by costing tens of thousands of jobs, the Consumer Electronics Association said Monday.
As the U.S. and other countries face a global economic downturn, a "protectionist wind looms," said a report released by the CEA. "The consequences of a reversal of an open-market global system would be disastrous for the United States and developing nations," the report said. "Trade is not a zero-sum game."
The 2,300-member trade group warned that much of the growth in electronics and IT spending will come outside the U.S. in coming years.
Without free trade, the U.S. could lose tens of thousands of jobs created through free trade in recent years, the group said. "We firmly believe that's the bottom line," said Sage Chandler, CEA's senior director of international trade.
Imports from China alone support more than 60,000 U.S. jobs, the CEA report said.
The CEA report estimated that 70 percent of the world's IT and communications technology spending -- some $3 trillion -- will happen outside the U.S. between 2008 and 2011. The trade group expects consumer electronics spending to increase by $42 billion, reaching $700 billion, between 2008 and 2009, and much of that growth will come from countries such as Russia, China and India, the report said.
CEA sees growth in the U.S. market as well, but there's great demand for mobile phones and other electronic devices in developing countries, where farmers and exporters are using text-messaging to conduct business, Chandler said. "Where there are people, there's opportunity" for the consumer electronics industry, she said.
The CEA's report comes out just before the group's International Consumer Electronics Show opens in Las Vegas and 15 days before U.S. President-elect Barack Obama takes office. Free trade has been a major push for CEA during the past year, even as U.S. voters elected several politicians who are wary of free trade deals.
Obama, as well as some of his fellow Democrats in the U.S. Congress, have questioned recent free trade agreements, saying some pacts have not protected jobs in the U.S. and other nations and have not included enough environmental protections. During the past two years, the Democratic-controlled Congress failed to act on three proposed free-trade agreements, with agreements with Columbia, Panama and South Korea failing to be approved.
Obama has called for new programs to help workers whose jobs have moved overseas, and he's questioned the labor and environmental protections in the North American Free Trade Agreement (NAFTA), signed in 1993.
"For far too long ... the attitude has been that any trade agreement is a good trade agreement," Obama said during a presidential debate in October. "And NAFTA did not have enforceable labor agreements and environmental agreements."
Obama also questioned the proposed trade agreement with South Korea during that debate. "When it comes to South Korea, we've got a trade agreement up right now, they are sending hundreds of thousands of South Korean cars into the U.S." he said. "That's all good. We can only get 4,000 to 5,000 into South Korea. That is not free trade. We've got to have a president who is going to advocate on behalf of American businesses and American workers and I make no apology for that."
CEA will continue to push for free trade with the new Congress and the Obama administration, Chandler said. Technology products make up about one-fifth of U.S. exports and demand from places like China will grow in the coming years, the CEA report said.
In addition, many CEA members depend on electronic parts from foreign suppliers and a move away from free trade would hurt their ability to build devices, Chandler added. "In this sector, we're so globally interconnected and interdependent," she said.