Sorry for the post title, but I couldn’t pass up the opportunity. You should hear my schtick about the Port of Portland (or the Taco of Tacoma…it gets worse from there). But, in addition to being incredibly funny, the post title makes a vital point about the ways we need to think about international trade policy.
One of the points I made during my interview for last week’s Crosscut article was that people have a disconnect when they think about trade. They love exporting but they hate trade…even though one is a part of the other! I think that what they’re really saying is that they fear importing, which they translate as “stuff that used to be made by American workers whose jobs were shipped overseas so that the same stuff could be made by cheap labor.”
In reality, however, importing actually creates a lot of jobs, especially for our state.
Today’s News Tribune story on the Port of Tacoma makes this point incredibly well. The article ties the Port’s economic challenges with the lack of cargo moving through the Port to points East:
Port of Tacoma Chief Executive John Wolfe said those ports are stealing away the elective cargo that formerly moved through Tacoma on its way to the big cities of the Midwest by rail. At the Port of Tacoma’s pre-recession peak four or five years ago, some 70 percent of the containers unloaded from ships in Tacoma was destined for inland destinations. Now that figure has dropped to 45 percent. (emphasis added)
The fact that we have such great West Coast ports (including airports for air cargo) allows us to be a major throughput platform for foreign goods going to the rest of the country (and a major we need to keep our ports competitive against challenges from BC and the widening Panama Canal). All of the cargo that comes to our ports creates jobs for people to offload those things, to warehouse them, to truck or rail those things and to provide finance, insurance and customs brokerage for them.
And by the way, many of the inbound containers that go inland need to come back through Puget Sound on their way back to Asia. Those empty containers can be filled by exporters in our region, especially by agricultural exporters. Even when import volumes are high, ag exporters often run into the problem of a lack of containers and space on ships, which is compounded by the fact that exports tend to be heavier than imports, so you need more capacity for smaller volumes of exports. An import container can be packed to the ceiling, but an export container packed to the ceiling is often too heavy. (The rough ratio is nearly 2 import containers for every 1 export container before ships reach their weight limit.) So, the more imports we have, the more we can export! The Agricultural Transportation Coalition has estimated that US ag exports could be 20% higher if Ag shippers were able to find enough containers and space on ships.
But we’re not just talking about logistics jobs. Washington is also home to many retailers whose headquarters employ thousands of people responsible for the sales and marketing of those things they import: large ones like REI, Nordstrom, Costco and Amazon as well as small ones like Skyway Luggage. And yes, sometimes these goods are cheaper because of where they are made, but that lower cost of goods (if I know my supply and demand) allows those companies to sell more, which means they bring in more revenue, which means they hire more people for those good-paying headquarters jobs.
Now, let’s put aside the fact that, technically, international tourists and international students are also imports (they’re importing their money, and leaving it behind in the form of hotel nights, restaurant meals, tuition, etc.). To me, the most interesting jobs created through importing are the ones that lead to more exporting. That’s right. A lot of the manufactured products in our region are made, in part, with imported materials. We all know about the Boeing planes that incorporate aspects from a global supply chain, but it’s not just the big guys. Think of the apparel companies that are importing textiles and then exporting them as the latest fashion trends. Or Starbucks importing coffee beans and then getting people around the world to buy lattes. There’s value to those companies to globally source for a variety of reasons, but we end up being on the winning end of that arrangement.
The point is that trade – both importing and exporting – raises all boats (literally and figuratively). And it’s important for us to understand the actual facts on the ground before we make judgements about these issues. That’s what WCIT’s job is: to provide objective analysis on trade policy issues in terms of how they impact Washington companies and job creation. And that’s import-ant work.