If you need an example of Washington state’s standing in the world of international trade, recall the September visit of Chinese President Xi Jinping to Everett and Seattle, which — with visits to Boeing and Microsoft and with state and local officials — was more than a refueling stop on his way to Washington, D.C.
Actually, you probably recall the traffic mess during Xi’s visit more than anything, but the fact remains that Washington state is a vital link for the United States and its trading partners, and the state and its workers are just as reliant on international trade.
More than 40 percent of all jobs in the state are tied to trade, reports the Washington Council on International Trade. The state Department of Commerce reports that state exports topped $90.5 billion in 2014, a 10 percent increase over 2013. On a per capita basis, the state agency says, Washington state is the nation’s largest exporter.
Boeing comes first to mind, especially in Everett, but Eric Schinfeld, president of the WCIT, says the full picture includes other aerospace companies and manufacturers, information technology businesses, agriculture, professional services and tourism.
Washington state and many of its businesses and workers now also stand to benefit following the completion this fall of negotiations for the Trans-Pacific Partnership, a trade agreement among the U.S. and 11 Pacific Rim countries, the largest trading partners being Japan, Australia, Canada and Mexico. President Barack Obama is expected to put the pact before Congress later this year for either its approval or its rejection.
Judging from the earlier votes in Congress that gave the president the authority for final negotiations, the support should be there. But TPP supporters have some work ahead in convincing even some of the state’s own congressional delegation and the public as well. A Pew survey in July, before the agreement was available for public review, found 29 percent of Americans surveyed believed the trade agreement would be a bad thing for the country; 49 percent said it would be good; 22 percent had no opinion.
The case can be made for its ratification, and not just to those in Washington state but across the country.
The TPP eliminates foreign tariffs on products made in the U.S., correcting an imbalance that has worked against U.S. companies and workers. Tariffs placed on foreign goods in the U.S. average 1.4 percent, where U.S. goods in other countries face average tariffs of 4.9 percent in Japan and 7.9 percent in Mexico.
Critics have compared the TPP to the North American Free Trade Agreement, but Schinfeld points out that the new agreement actually will correct some areas where NAFTA fell short.
During negotiations, critics also questioned how the pact would protect and promote environmental and labor laws. There are specific standards that countries such as Vietnam and Mexico must meet regarding the environment, minimum wage, unions, child labor and food safety laws. Those standards now have some enforcement “teeth,” Schinfeld said, through the threat of sanctions and the reimposition of tariffs.
Another criticism was that the international court that would oversee disputes could block regulations in the U.S. The settlement mechanism is similar to other such systems in other trade agreements. In 18 previous cases where suits were filed against the U.S., Schinfeld said, the U.S. has not lost a case. And the TPP’s system is considerably more protective of state and national laws.
The other argument for ratification is what could happen it the absence of the Trans-Pacific Partnership. China, which was not a participant in the negotiations, is crafting its own trade pacts with Pacific Rim countries. Without the TPP, China and other countries can dictate the terms of trade, as well as how concerns for labor and environment are addressed, or not addressed.
Trade won’t stop without the Trans-Pacific Partnership, but with it more jobs can be protected on a playing field that is leveled by protections for consumers, the environment and all workers.