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Guest opinion: Pacific trade agreement vital to Washington

Eric Schinfeld

The most recent deadline for completion of the Trans-Pacific Partnership (TPP) regional free trade agreement negotiations has come and gone without the announcement of a successful conclusion. This delay in completing the TPP – the largest and most progressive trade agreement in history – risks significant trade setbacks for the most trade-dependent state in the country.

President Obama this week attended the Asia-Pacific Economic Cooperation Summit in Beijing, where he encouraged the 11 other Asia-Pacific countries engaged in the TPP negotiations to come to agreement on this unprecedented opportunity to raise the global standards of trade and open some of the world’s fastest growing markets to sale of United States – and Washington state – goods and services.

But no deal has been reached, and it’s uncertain whether it will be by end of the year. Washington state, where 40 percent of jobs are tied to trade, has more to gain from the TPP than any other state thanks to our close economic relationship with the Asia-Pacific region and our position as an international gateway. We must remind our lawmakers how important this trade agreement is for our economic future and encourage them to take a leadership role in ensuring the conclusion of the highest standard agreement possible.

International trade is especially important to the eastern half of the state, which exported almost $8 billion of goods in 2012, about one-half of which went to Asia-Pacific nations. For many Eastern Washington agricultural producers and manufacturers, foreign sales now account for a large portion of their business. For example, SCAFCO Grain System, which is headquartered in Spokane, relies on partnerships in most of the TPP nations and is currently working to secure business in Japan, Malaysia, Australia, New Zealand, Mexico, Chile and Peru.  A new free trade agreement could simplify the process of selling SCAFCO products made in Eastern Washington in these countries.  Countless other local companies rely on trade as well – over 30,000 Eastern Washington jobs are directly supported by exports.

The TPP could open even more trade opportunities for Washington farmers, ranchers, manufacturers, loggers and service providers by breaking down trade barriers that are preventing them from being competitive in foreign markets, such as discriminatory regulations, unfair competition from state-owned enterprises (SOEs) or intellectual property rights infringement.

Since the U.S. already has an open economy with few barriers for foreign companies selling their products or doing business here, trade agreements like the TPP play a critical role in ensuring other countries reciprocate and offer an equally open and inviting business environment to U.S. companies. With 95 percent of the world’s consumers living outside the U.S., Washington employers have immense opportunity to grow their global business if trade agreements like TPP can level the playing field.

President Obama and U.S. Trade Representative Michael Froman have emphasized that the TPP will be a 21st-century trade agreement that covers a wide range of current trade issues never touched by past trade agreements. In addition to lowering tariffs and non-tariff barriers, the TPP aims to raise labor and environmental standards in all participating countries. A successful TPP will set a precedent for high-standard global trade and create a framework that will encourage other countries in the region to improve their standards in order to become part of the trade pact. As Froman has said, “Trade initiatives such as the TPP give Americans a chance to shape the global economy, rather than just be shaped by it.”

While there is a limit to what we can do to convince other nations to agree to a finalized TPP, all of us can play a role by encouraging our congressional leaders to recognize the value trade agreements like the TPP hold for our nation’s economic future and national security. In particular, passage of Trade Promotion Authority (TPA) during this upcoming “lame duck” session of Congress will give U.S. negotiators the direction and confidence they need to drive the negotiations to a successful and acceptable conclusion.

The Washington congressional delegation is uniquely positioned to take a leadership role on trade, and we must urge them to be staunch advocates for the TPP and TPA as a way to increase the global competitiveness of Washington employers.

Eric Schinfeld is president of the Washington Council on International Trade.
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