The Obama administration should say "yes" to the European Union's (EU's) invitation to do some nation-building here in America while at the same time helping our indispensible ally--Europe--and boosting family incomes.
Where would this nation-building come from? The answer today is the same as it was in the postwar period: through expanded trade between the United States and Europe. The United States should be quick to affirmatively respond to the EU trade minister's invitation to negotiate a bilateral trade agreement.
After World War II, Europe was in dire straits. We often reminisce about how the United States rebuilt Europe through the Marshall Plan. Today, America does not have the money for a similar plan, and Europe is not in need of a comparable surge in infrastructure investment. The spark that provided an even bigger boost in economic growth for postwar Europe is much less heralded: expanded trade. By pushing to reduce trade barriers in the 1940s and the 1950s, America unleashed economic forces that rebuilt Europe while it rebuilt itself and boosted incomes. Global trade in 2000 was 22 times the level in 1950. The U.S. Real Per Capita Income benefited from this expanding trade, doubling from $14,507 in 1967 to $ 29,396 in 2006. These are outcomes worth repeating.
EU Trade Commissioner Karel De Gucht has called for the United States and the EU to enter immediately into negotiations for a comprehensive, bilateral trade agreement. As both sides of the Atlantic Alliance struggle with austerity measures, it is vital that this propellant of growth and jobs be vigorously pursued. The European Commission estimates an agreement could boost transatlantic trade by 50 percent.
While unions and the left have often opposed trade agreements because they exploit cheap labor and do not hold the other side to the same high labor and environmental standards as America, these should not be causes for opposition to a European trade agreement. This is a wonderful opportunity for these groups to show the sincerity of their statements in support of trade--so long as it is the right kind of trade.
A United States-EU trade agreement also could encompass closer ties with Turkey and the Arab Spring countries that already have close trade relationships with the EU. This would greatly benefit the United States while at the same time helping to cement new-born democracies in a war-torn region, just as we did after World War II.
Hopefully, the EU trade commissioner's outreach to negotiate a bilateral trade agreement will prompt the second Obama administration to finally reach for the one unutilized tool in the economic toolbox with a proven track record for igniting desperately needed global economic growth and jobs. This tool, of course, is trade expansion.
Bold action now would spur the return of economic vitality today and provide inspiration for courageous, collaborative action to future generations.
Hon. Mark R. Kennedy leads George Washington University's Graduate School of Political Management and is Chairman of the Economic Club of Minnesota. He previously served three terms in the U.S. House of Representatives and was Senior Vice President and Treasurer of Federated Department Stores (now Macy's).