U.S., 11 Pacific Rim countries reach trade deal

  • Herald staff and news services
  • Monday, October 5, 2015 3:20pm
  • Business

WASHINGTON — After more than six years of stalled progress and political wrangling, negotiators from the U.S. and 11 trading partners across the Pacific Rim announced a deal Monday on a landmark trade accord linking 40 percent of the global economy.

The agreement on the Trans-Pacific Partnership clears the way for what would be the world’s largest regional trade pact. The accord, which was announced Monday morning, would phase out tariffs on thousands of goods and establish uniform rules of commerce.

The controversial deal almost certainly faces a huge political battle in Congress, which must approve it in a yes-or-no vote. Lawmakers likely won’t vote on it until sometime next year.

President Barack Obama led the charge for the controversial pact as part of his foreign policy focus on Asia. The pact is meant to encourage trade between the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

“This partnership levels the playing field for our farmers, ranchers and manufacturers by eliminating more than 18,000 taxes that various countries put on our products,” he said in a statement. “It includes the strongest commitments on labor and the environment of any trade agreement in history, and those commitments are enforceable, unlike in past agreements.”

He’s cast the agreement as good for Americans workers and crucial to expanding U.S. influence in the Asia-Pacific, a fast-growing region he says should be a bigger focus of the nation’s foreign policy.

The deal is supported by many Republicans in Congress and supporters of free trade and opposed by organized labor, civic groups and many lawmakers from Obama’s own party, who fear the deal will hurt workers and the environment.

Private studies suggest that the Pacific accord would add only modestly to U.S. economic growth and have little overall effect on jobs, in part because the U.S. already has free-trade pacts with several of the Trans-Pacific Partnership nations.

Expanding Pacific trade, however, could benefit Washington state and California, where trade plays a bigger role. The agreement favors some of the states’ strengths, including agriculture and technology.

The agreement can knock down hurdles faced by Washington businesses, said Eric Schinfeld, president of the Washington Council on International Trade. “The TPP can topple those barriers and address the issues our businesses and workers face in the 21st century – such as restrictions on cross-border data flows, state-owned enterprises that distort the market, the use of high tariffs and quotas, poor IP protections and lax labor and environmental standards. The TPP is our chance to resolve many of these challenges and shape global trade rules that work in our favor.”

Washington exported about $16.8 billion goods and services to TPP countries in 2014, according to data cited by the Washington Council on International Trade.

That is nearly one-third of the state’s exports. TPP countries account for 50.4 percent of Washington’s imports, according to the trade council.

Democratic Rep. Rick Larsen said he is undecided on the deal.

“As I evaluate the final agreement, the issues I hear most about will be top of mind,” he said in a statement. So far, these “include protections for workers and the environment; safeguards for human rights; access to medicines in developing countries; the importance of enforcement mechanisms; and strong dispute settlement provisions that require foreign companies to live up to the standards we have in the U.S.”

He said he will also be mindful that roughly “40 percent of our jobs are tied to trade in some way.”

Those include many aerospace sector jobs, most with the Boeing Co.

The airplane maker’s CEO, Dennis Muilenburg, said in a statement that “free-trade agreements create new opportunities for American companies and their workers.”

“U.S. companies need to be able to compete and win in global markets to support well-paying jobs at home. It’s critical we provide our manufacturers and exporters with the best tools to compete on a level-playing field in markets worldwide,” he said.

The Washington Fair Trade Coalition slammed the agreement Monday, saying it ignores the interests of workers, consumers, communities and the environment.

The TPP helps CEOs and global companies, said Stan Sorscher, the coalition’s president and a former Boeing engineer.

The agreement looks like something from “the 19th century, where the rules of globalization were written by corporations,” he said.

Trade negotiators in Atlanta overcame repeated delays and last-minute hitches, and worked feverishly over the past five days to overcome sharp differences on drug patents, dairy markets and auto manufacturing rules.

Since the U.S. committed to undertaking negotiations in 2008, progress has been stymied by the breadth of issues involved and competing interests from nations facing intense domestic pressures. Critics have complained about the lack of transparency in the process, as only small, select groups of people have been allowed to view working texts of the agreement, and then only under very strict confidentiality rules.

While the agriculture, technology and entertainment industries in the U.S. are expected to benefit, auto, textiles and dairy could see losses from greater foreign competition.

Peter Petri, a professor of international finance at Brandeis University, says he doesn’t expect the deal to lead to any U.S. job gains. But he forecasts it will boost U.S. incomes by $77 billion a year, or 0.4 percent, by 2025, mostly by creating export-oriented jobs that will pay more, even as other jobs are lost.

Under fast-track legislation approved by Congress earlier this year, the text of a trade agreement would be published 30 days after the president gives notice to Congress of his intent to sign the trade accord. The public has 60 days to review it, and then the International Trade Commission, an independent agency, has up to 105 days to produce an economic impact assessment. In this scenario, it would be next spring before Congress could vote on the package.

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.