Business and Trade Groups Disappointed in Withdrawal from Trans-Pacific Partnership, Looking Ahead to New Agreements

Yesterday we wrote that the administration’s withdrawal from the Trans-Pacific Partnership would cost the state $8.7 billion in new  exports and up to 26,400 additional jobs, based on an economic impact analysis performed last year. So it’s no surprise that Washington business and trade leaders are disappointed in the president’s decision.

The Spokesman-Review has responses from major trade, agriculture, and business groups.

Aerospace, technology and agriculture industries in Washington depend on trade, and the 12-country Trans-Pacific Partnership championed by former President Barack Obama would have ensured U.S. exporters could sell goods and services on a level playing field with foreign competitors, the Washington Council on International Trade said.

The TPP, which sought to lower trade barriers and deepen economic ties among the member nations, “promised far-reaching benefits to trade-dependent Washington state, where 40 percent of our jobs are tied to trade,” said Lori Otto Punke, president of the trade council…

The Association of Washington Business also released a statement Monday criticizing Trump’s decision, calling it “a set-back” for Washington state exporting industries.

“Washington is one of the most trade-dependent states in the nation, and employers here stood to gain from passage of the TPP,” the AWB said…

U.S. agricultural interests that supported the TPP expressed uneasiness about what comes next. With no alternative trade policy to replace the pact, export opportunities that could help America’s wheat farmers are at risk, two national groups representing wheat growers said Monday.

The Tri-City Herald reports,

U.S. Rep. Dan Newhouse, R-Sunnyside, was a strong TPP supporter. On Monday, Newhouse aligned himself with the new president, saying he hopes to work with the administration on trade deals.

“Formally withdrawing from TPP is not surprising given the president’s stated commitment,” he said in a statement. “However, I am glad that President Trump also emphasized today the importance of trade and negotiating effective trade deals. I look forward to working with the president on fair deals that will increase trade opportunities that benefit American workers and exporters.”

And the paper writes of mixed reactions from some agricultural interests.

Washington’s potato industry is taking the long-term view of the TPP demise.

Matt Harris, director of government affairs for the Washington State Potato Commission, said it is heartened by the president’s interest in developing bilateral trade agreements with individual nations in place of the multi-nation TPP deal…

Scott Courtright, secretary/treasurer of the Washington Hay Growers Association and an exporter, said too many elements of TPP were hidden. His association felt it couldn’t fully understand it well enough to support or oppose it.

By one estimate, TPP would have resulted in Washington hay growers seeing their Japanese sales cut by as much as half because Japan’s domestic dairy industry would have been dramatically reduced…

Wheat is one of Washington’s largest export crops and the Washington Association of Wheat Growers favored TPP because it would have opened markets.

The Puget Sound Business Journal reports the administration plans to renegotiate NAFTA next and adds,

Washington is the most trade-dependent state in the U.S., and Trump’s trade policies could have an oversized impact on the Puget Sound region.

Washington exported $27 billion in goods to Trans-Pacific Partnership countries in 2014, which include Australia, Brunei, Canada, Chile, Japan Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. More than 6,000 Washington companies exported goods to TPP countries in 2013, according to the International Trade Administration.

Crosscut has an extended discussion of our state’s politics with pollster  Stuart Elway, which is worth reading in its entirety. With respect to trade policy, this is particularly interesting:

In a state that is one of the most trade-dependent in the nation, 49 percent say we should be strong and active in international affairs, but a plurality, 29 percent, are what Elway calls “isolationists,” meaning they favor protectionism and to let the foreigners fend for themselves.

Elway notes there’s been a definite shift away from support for free trade. In 2006, 50 percent of Washingtonians favored a protectionist trade policy; in 2015 that grew to 63 percent. 

Two years ago we wrote,

Washington’s economy is highly dependent on global trade. The state ranks second in the nation in exports per capita. According to the Washington Council on International Trade, 40 percent of the jobs in the state are related to trade in some way. Given its many trade advantages, the state is well-positioned to continue to be a leader in international trade for years to come.

Although the game is changing, Washington is still well-positioned to be a trade leader. But the loss of TPP is an unfortunate set-back for now.