Editorial: TPP a boon to Washington

On Wednesday afternoon (Spokane time), the United States joined 11 other nations in a formal signing of the Trans-Pacific Partnership trade pact in New Zealand.

As the nation’s most trade-dependent state, this is good news for Washington.

But the next step is gaining congressional approval, and that could be tricky in an election year. The four top finishers in the Iowa caucuses — Ted Cruz, Donald Trump, Hillary Clinton and Bernie Sanders — are all opposed. And skittish congressional leaders have talked of delaying a vote until after the November elections.

The TPP would liberalize trade with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. TPP nations represent 36 percent of global trade, and about one-fourth of all U.S. exports already go to these countries.

Reject this pact, and many of these nations may instead strenghten trading ties with China, and American companies will suffer.

In Washington state, 31 percent of exports go to TPP countries, and these transactions support 348,00 jobs, according to the Business Roundtable. TPP would open new markets for Washington goods in Brunei, Japan, Malaysia, New Zealand and Vietnam.

Locally, Spokane Seed Co., which grows and processes dried peas, lentils and chickpeas, and Commercial Creamery Co. are two examples of businesses that stand to benefit. Commercial Creamery President Michael Gilmartin told the editorial board that its export business is “vibrant,” with 25 percent of cheese powder sales registered abroad.

Under the trade pact, 18,000 tariffs an American-made goods would be reduced or eliminated, which would boost the flow of goods. The Washington Council on International Trade notes that the United States has a trade surplus with all of the 20 countries with which it has a trade agreement.

Populist and protectionist attacks on free trade deals are nothing new, and at a time when U.S. wages are stagnant and employers are moving jobs overseas, they can be persuasive. However, a recent analysis by the Peterson Institute for International Economics dismisses much of the criticism.

The study praised TPP for the extensive tariff reductions and the unprecedented agreements covering environmental and labor standards. Violators would be subject to tariffs on their products. Vietnam, for instance, would have to allow labor unions and a minimum wage. As wages rise in TPP nations, U.S. companies will have less reason to move abroad.

The Peterson analysis concluded that TPP would boost U.S. incomes by $131 billion annually. Export-intensive jobs pay 18 percent more, on average.

Just as important, there is no upside to scuttling the pact. In fact, delaying passage by just a year would cost the U.S. economy $77 billion. Negotiating a new deal would take many years.

No trade deal delivers 100 percent of what each country wants, but this one would be a boon to U.S. companies with overseas customers.

And Washington businesses would be among the biggest beneficiaries.

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