President Obama and congressional Republicans have few issues on which they agree. Fortunately, they share common ground on one that is of key importance to Washington state: expanded trade with Pacific Rim countries.
The president catches more flak from his own party than from Republicans on international agreements that would benefit trade-dependent states like Washington. As long as Democrats controlled the Senate, progress languished on trade-promotion legislation – so-called “fast-track” authority to take up-or-down votes on trade agreements negotiated by the administration, including the proposed Trans-Pacific Partnership (TPP).
That authority, which expired in 2007, is considered crucial to ratification of trade pacts. With pro-trade Republicans in the majority, the president’s push for fast-track authority stands a better chance – bringing resolution on the TPP a bit closer.
Controversy swirls around the TPP, with Democrats particularly concerned about secrecy surrounding the trade pact involving the United States and 11 other countries. But trade negotiations are usually held in private, and TPP parties have signed a confidentiality agreement.
If the TPP goes into effect, the Peterson Institute for International Economics projects $78 billion more per year for the United States. The greatest benefits, the institute says, would go to investors, U.S. businesses seeking foreign investment and small businesses selling overseas.
For Washington state exporters, the TPP is expected to be huge. In fact, U.S. Trade Representative Michael Froman says this state would benefit more than any other from the pact.
It would expand trade with six existing free-trade partners (including Canada and Australia) and open up new markets in five other Asia-Pacific countries (including Japan, Vietnam and Malaysia). The TPP would remove trade barriers, improve protection for intellectual property and support supply chains for raw material imports necessary for U.S. manufacturers.
Although the pact doesn’t include China, it would be so wide-reaching in the region that it would feel pressure to abide by the TPP’s higher standards.
Real opportunities exist for Washington’s farmers with passage of the TPP. For example, Japan currently assesses up to a 13.6 percent tariff on frozen potatoes; Vietnam levies a 15 percent tariff on apples. Neither country is a current free-trade partner of the U.S. If the TPP is enacted, those trade barriers would fall and open up markets for apple and potato sellers.
This state’s agricultural sector knows how important trade is; it’s keenly felt the fallout of having its access to Asian markets interrupted by the West Coast port slowdown.
Ratification of the TPP should be a top priority for the state’s congressional delegation. But that can’t happen until the president gets fast-track authority.