Robust trade is woven into the fabric of Washington’s economic success.
Our state ranks first in the nation in exports per capita. And, according to the Washington Council on International Trade, 40 percent of jobs in the state are related to trade in some way.
As a trade-driven state, any move that increases the difficulty of selling or importing goods from our long-time trading partners – North, South, East or West – would be a firm blow to our economy.
John Wolfe, CEO of The Northwest Seaport Alliance, testified before the U.S. House Ways and Means Committee, pointing out Seattle and Tacoma ports are the fourth-largest container complex in the nation, and Sea-Tac Airport is the ninth-busiest airport.
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Much of the traffic those transportation hubs host represents billions of dollars in imports and exports to key trading partners.
As talk escalates at the national level about tinkering with America’s trade agreement with China – our largest trading partner – and adding tariffs on goods coming into and leaving Washington, we believe a balanced solution to protect our economy while modernizing trade agreements is the prudent course of action.
Anything less puts our economic well-being at risk.
Employers remember the West Coast ports slowdown of 2014-15, which stalled Washington imports and exports during a six-month labor contract dispute. Factories slowed production, agricultural products lost value and working people lost paychecks.
By the time a resolution was reached, the state’s economic loss was estimated at $770 million.
That short-lived situation illustrates how even the smallest trade gap creates enormous costs and impacts jobs and the families that rely on them.
A Brookings Institution analysis of the trade breakdown notes Washington could be the worst off: Nearly 154,000 of employees work in industries that would be affected by trade countermeasures, a higher number of workers than any state outside California and Texas.
There is justified concern with outdated trade agreements; the global marketplace has changed, yet the U.S. has not updated trade agreements to reflect issues like the expectation of environmental and sustainability equity for products imported to America.
Nor has there been adequate enforcement of current trade agreement provisions.
Take Washington’s tart cherry industry: Despite an increase in demand, steady domestic production and a consistent stream of exports, a dramatic increase in imported tart cherries places an excessive burden on American farmers and threatens the livelihood of the industry.
In response, U.S. tart cherry farmers limited the supply on the open market to adhere to requirements in trade agreements, while cheap imports remain unregulated.
Import data shows that as recently as 10 years ago, tart cherry juice concentrate imports totaled 24 million pounds, while domestic sales reached 25 million pounds. Data from 2017 shows imports of the concentrate, mostly from Turkey, skyrocketed to 230 million pounds, while domestic sales remained stagnant and even decreased slightly.
Turkey has taken advantage of the lack of trade provision enforcement and injected millions of pounds of juice concentrate into the U.S. market duty-free. In fact, since 2013, Turkey has accounted for over 50 percent of the competitive need limit. Because the CNL was exceeded, Turkey should have been denied duty-free access to the U.S. market under Section 503 of the Tariff Code.
This example highlights the need for Congress to refresh and modernize – and then enforce – trade agreements to ensure fairness and mutually beneficial deals to support American companies and workers.
We hope for thoughtful dialogue to take place in order to reach two vital goals: fair and robust trade along with protection of Washington’s jobs and economy.
Kris Johnson is president and CEO of the Association of Washington Business. Eric D. Johnson is executive director of the Washington Public Ports Association.