President Trump recently indicated that the United States might consider rejoining the Trans-Pacific Partnership. Rejoining the TPP is a no-brainer for Washington state. Here’s why.
- The TPP would remove more than 18,000 tariffs across member countries, including all tariffs on manufactured goods and most agriculture products.[1] TPP would eliminate tariffs on WA key exports of aerospace goods, cherries, potatoes, berries, seafood and more. Fewer tariffs and more markets equal more quality jobs in WA.
- The 11 U.S. trading partners joining the TPP represents approximately 13% of global GDP in 2015, measured in U.S. dollars.[2] The largest of these, Japan, constitutes approximately 5% of global GDP, followed by Canada at 2%. While representing only 13% of global GDP, these countries were the destinations for nearly half (42.5%) of all U.S. commodities and merchandise exports in 2015.
- TPP sets the standard for e-commerce and IP security in the 21st century. Some of the most beneficial TPP rules for Washington state relate to nontariff barrier reductions and removals. Specific aspects to the TPP that will benefit Washington software and e-commerce firms include: prohibiting the blocking of cross-border flows of data over the Internet and requirements that data and servers be located in-country and prohibiting forced disclosure of software source code to governments and commercial competitors.[3]
- Many TPP signatories are important trade partners for Washington state and eliminating tariffs on products in these countries will give us an edge and strengthen our partnerships.[4]
- $7.9B exported to Canada (2nd largest trading partner)
- $5.4B exported to Japan (3rd largest trading partner)
- $2B exported to Mexico (8th largest trade partner)
- $1.4B exported to Australia
- $1.3B exported to Singapore
- $.07B exported to Malaysia
- South Korea, Taiwan and the U.K. (among others) have expressed interest in joining and are our 5th, 6th and 12th largest trade partners respectively.
- TPP is landmark agreement because it includes labor and environmental provisions as key requirements of the agreement instead of less-binding addendums. For example, TPP requires minimum wages and safe working conditions and will be the first to bring these benefits to countries like Vietnam. [5]
- TPP incentivizes foreign investment. Washington state, with our strategic Pacific Rim positioning was projected to receive as much as $3B in additional foreign investment.[6]
- Though TPP is not yet in enforce, other countries have expressed interest in joining. Taiwan, Thailand, and the Philippines are the most likely to join, and they all have very high (up to 40%)[7] tariffs on the tree fruit WA excels at growing. In other words, TPP benefits will only continue as more countries join.
- Don’t leave Washington State behind!
[1] https://ustr.gov/sites/default/files/TPP-Economic-Benefits-Fact-Sheet.pdf [2] https://www.cnbc.com/2018/03/08/eleven-nations–but-not-us–to-sign-trans-pacific-trade-deal.html [3] https://www.washingtonpost.com/news/volokh-conspiracy/wp/2015/11/06/cybersecurity-and-the-tpp/?noredirect=on&utm_term=.8e330a129e30 [4] https://www.census.gov/foreign-trade/statistics/state/data/wa.html [5] https://thediplomat.com/2016/04/the-tpp-a-win-for-vietnams-workers/ [6] https://wcit.org/lets-celebrate-tpp-signing-day/ [7] https://www.goodfruit.com/benefits-of-the-tpp/
