International trade and international automobile dealers

Inside the beltway and back home, a spirited debate is underway about the United States’ role in an expanding and increasingly connected global economy. All too often this debate minimizes a complex issue into a simple “us vs them” dichotomy that overlooks the real and tangible benefit to American businesses and consumers that comes with embracing open markets and global trade.

From my perspective, representing America’s international nameplate automobile dealers of brands like Honda, Toyota, BMW and others, I know that many who are characterized as “them” are often among the most recognizable members of their communities. They are businessmen and women, sponsoring little leagues, participating in local chambers and economic development boards, and contributing substantially to the tax base needed to support and meet the needs of their communities.

{mosads}The debate and associated rhetoric surrounding global trade is characterized by a prevailing sense of doom and gloom that breeds a palpable fear of job loss in historically competitive marketplaces. As leaders in the automotive industry, we seek to correct the misconception that when a consumer chooses to purchase an international nameplate vehicle from their local dealership they are in any way harming the U.S. economy or job market. It’s quite the opposite. When you buy a Hyundai, or a VW, or a Nissan, that purchase creates good-paying American dealership jobs, from salespeople to technicians. And, more likely than not, that vehicle was built in an American plant by American workers. Fifty-six percent of all international makes sold in the United States are also built here in 17 plants located in nine states. Those manufacturing plants exist because of trade, and so do the more than 126,000 American jobs they directly create.

Trade works for communities, consumers, and our economy. This is a message that legislators and policymakers need to hear now, more than ever, and it’s backed up by indisputable facts. Vehicles that consumers typically think of as “imported” actually comprise more than half of all U.S. car sales – and more than half of those were built in the U.S. There are 9,500 international dealer franchises selling 8.3 million vehicles a year, creating 570,000 jobs here at home and supporting a payroll of $32 billion. International brands may have their roots in Germany, Italy or Japan, but thanks to trade and a global marketplace, their dealerships are deeply rooted in our communities.

Members of Congress would be well-served if when they return to their communities they remind their constituents that local economies rely on the type of investment that is supported by policies encouraging the free movement of goods and services. Whether consumers are in the market for a Toyota or a Chrysler, dealerships are contributing to this balance and redefining what it means to be an “American car” while opening up markets for American products all over the world. These dealerships are also part of the story contributing to a more cost effective environment for consumers. According to the Petersen Institute for International Economics, “adopting freer trade policies resulted in an increase of almost $1 trillion in income throughout the country, or a $10,000 increase for each household a year, since World War II.”

It is critical that we get past the uninformed rhetoric and snappy soundbites on global trade and focus on policies that will create opportunities for Americans and deliver on our ability to create solid middle-class jobs for our citizens. Decades of success will die on the vine if we allow the continued demonization of globalization and the policies that have helped bring it about. We urge Congress and the next administration to do everything in their power to promote the type of global commerce that assures vehicles with American technology, consisting of American parts, built with American labor and sold at dealerships at the heart of our communities continue to thrive—no matter what the nameplate says.

Cody Lusk is president of the American International Automobile Dealers Association (AIADA).  Founded in 1970, AIADA represents the 10,000 American automobile dealerships that sell and service international nameplate brands.