Washington state would see biggest gain from Pacific pact, U.S. trade chief says

Of all the states in the union, Washington would benefit the most from a long-sought Pacific region trade pact.

That’s the view of U.S. Trade Representative Michael Froman, who stopped off in Seattle Tuesday to promote the controversial proposed 12-nation Trans-Pacific Partnership. Also known as the TPP, the pact would be the single largest trade agreement in the world, with a goal of virtually removing tariffs and other trade barriers.

“Hundreds of thousands of Washingtonians owe their jobs to exports," Froman said. "And being a gateway to the Asia Pacific, with all the ports here, it stands to benefit significantly from TPP."

Washington manufacturers and farmers would benefit from lowered trade barriers around the Pacific Rim, Froman said.

“Washington tends to export fruit, vegetables and wheat — all areas where they face tariffs in TPP countries,” he said. “On fruit, tariffs are 30 to 40 percent. On wheat, various restrictions, usually quotas. On vegetables, 20 to 30 percent. Those are all going away with TPP, and that will create more opportunity in the agricultural sector."

He added that while Boeing is Washington’s best-known exporter, 90 percent of the 12,000 Washington export companies are small and medium-sized businesses that struggle with high tariffs.

In addition, the pact should help the technology industry, he said, by increasing intellectual property protections around the globe.

“By working with TPP partners to strengthen intellectual property rights protection throughout the region," he said, "it will have an impact on the whole region."

And this includes China. While China is not one of the countries in the TPP, Froman said he expects that country, known for its lax enforcement of even its own intellectual property laws, will be pressured by a trans-Pacific agreement.

“China is not part of TPP,” he said. “But they’re going to have to live in a TPP world — a world in which their neighbors are operating under a higher set of standards and are therefore are attractive destinations for doing business.”

Froman acknowledged historic concerns about trade agreements potentially undermining labor and environmental standards, but he said TPP is different.

“Certainly the Seattle meeting underscored that we need to upgrade the international trading system,” he said, referring to the 1999 riots that brought down what was to have been a series of World Trade Organization meetings starting in Seattle.

"Through TPP ...we are pursuing what I am convinced will be the most progressive set of trade agreements in history,” he said. “I think this is going to be the most pro-environment trade pact ever. Countries will have obligations to enforce the environmental law and not waive them to get trade advantages.”

Source: bizjournals.com