Port officials talk of world trade challenges

EVERETT — The Port of Everett says it is doing all it can to defend a position as one of the most important handlers of freight on the West Coast.

Economic Alliance Snohomish County and the Port of Everett teamed up for an annual meeting and harbor tour Thursday to stress the port’s importance to international trade and Snohomish County employment.

In fact, Snohomish County is the second-most trade-dependent county in the U.S., said Troy McClelland, an Everett Port commissioner and CEO of Economic Alliance Snohomish County. Sixty percent of all jobs in Snohomish County have some tie to international trade, 20 percentage points more than Washington state as a whole.

“International trade is one of the most under-discussed topics in the county,” McClelland said.

Washington’s exports to Asia of $4,252 per capita in 2012 ranked the state second in the U.S., according to data from the East-West Center.

While the Port of Everett’s shipping volume is up substantially — thanks to imported aerospace components and exported farm machinery, oil drilling equipment and mining tools — two clouds are on the horizon.

Canada intends to poach some of Everett’s business with a national freight strategy it’s been developing since 2000, McClelland said. Canada has invested heavily in the Port of Prince Rupert, B.C., with new rail lines that lead to the U.S. Midwest. And when the wider, deeper Panama Canal opens in 2015, larger ships and their oversized cargo would have one less reason to pay Everett a call.

Port of Everett Executive Director John Mohr also stressed the importance of trade to the county’s economy.

“Three of five jobs in Snohomish County are tied to trade,” he said. “People need to recognize that.”

Canada’s “freight gateway” poses a threat to Everett because the Canadian government offers shippers a lower cost structure, Mohr said. The Port of Everett must levy a federal harbor maintenance tax of one-eighth of one percent on the value of imported goods, even though Everett’s shipping terminal receives no benefit.

“It makes us noncompetitive in certain cargo situations” because the harbor maintenance tax goes to other ports around the U.S. that need dredging, he said.

Reform of the harbor maintenance tax would help Everett gain some equality with Canada’s port costs, he said.

The U.S. also needs to step up investment in roads and ports if the country intends to remain the world’s foremost economy, Mohr said. Its roads earn a D-plus grade while ports rate 22nd in the world.

McClelland said the U.S. hasn’t had a freight strategy since the 1950s, when President Dwight Eisenhower initiated the Interstate highway system.

“We need to develop a national freight strategy … and invest in it with public-private partnerships,” Mohr said.

The port is working with the City of Everett to improve traffic chokepoints that make it difficult to move the oversized freight the port handles, Mohr said. Recent work at the intersection of Pacific and Rucker avenues is an example. The port and the city pushed for the project, even though no regional or state transportation agencies had identified money to improve that piece of a recognized freight corridor.

Guest keynote speaker Sean Connell, former director of Japan and Korea business relations for the U.S. Chamber of Commerce, said Snohomish County will need world-class infrastructure if it intends to compete for increasingly open Asian trade.

The recently approved U.S.-South Korea trade pact will eliminate Korean tariffs on 80 percent of U.S.-manufactured goods this year and 95 percent of goods in 2014, Connell said. Already, there’s been a huge increase in the value of exported aerospace components and produce. U.S. companies will finally have access to long-closed sectors of South Korea’s trillion-dollar economy.

“Koreans want to buy U.S. goods and services,” Connell said.

Japan has joined talks with the Trans Pacific Partnership, a multinational agreement that would further open trade between Asia and the U.S., he said. The U.S. and the European Union have also opened their own trade dialog for the Transatlantic Agreement.

“Both talks present tremendous opportunities for U.S. firms,” Connell said.

Kurt Batdorf: 425-339-3102; kbatdorf@heraldnet.com. More from The Herald Business Journal: www.theheraldbusinessjournal.com

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