Selling trade is easy here; it may be less so elsewhere
Ambassador Michael Froman, the U.S. trade representative, contends that “a lot is the frustration with globalization rather than trade agreements.”
Special to The Seattle Times
For the decade ending last year, Washington’s merchandise exports rose about 82 percent in inflation-adjusted dollars. We handily run a trade surplus with the world.
Not coincidentally, Washington enjoys higher wages, better jobs and a more diversified economy than most states.
This came despite a dreadful national and world situation: Two failed wars costing trillions, the continued hollowing out of the national industrial base, the worst inequality since the Gilded Age and the most severe economic collapse since the Great Depression. The nation continues to run a trade deficit. It’s more than a number, $472 billion in 2013. It represents millions of lost jobs.
One tempting lesson: America would enjoy greater prosperity and opportunity if only it could be more like Washington state.
No wonder then that Ambassador Michael Froman, the U.S. trade representative, wanted to visit here last week. He spoke to the Washington Council on International Trade, toured companies, met with farmers and ranchers, and spent time listening to people worried about trade agreements.
“My message is focused on how the president’s trade agenda will unlock trade opportunities,” he told me. “No state is more focused on trade than Washington.”
In 2010, President Obama set a goal of doubling U.S. exports of goods and services in five years. They reached a record $2.3 trillion last year, but the five-year target is probably unrealistic. Still, expanding trade is the cornerstone of Obama’s economic policy.
It is particularly built around completion of the Trans-Pacific Partnership, involving the United States and 11 other nations, the most ambitious trade agreement in history. A less-contentious companion is the Transatlantic Trade and Investment Partnership (TTIP) with the EU.
Although the administration denies it, TPP is also very much part of the “pivot” to the Pacific and shoring up alliances and partners facing a rising China. TPP is quiet recognition that the World Trade Organization is a failure.
Although it is behind schedule, Froman said he still believes TPP will happen.
“There’s a lot of momentum in the negotiations,” he said. “The issues left at the end are, as usual, some of the most challenging.”
And complicated. TPP takes on far more than lowering tariffs, which are already low with the nations involved. It seeks to increase market access for American goods, such as automobiles to Japan, raise environmental and labor standards, ensure an open Internet and protect patents.
“We want an agreement that is very much in our interests and reflects our values,” Froman said.
But TPP has plenty of critics. Groups such as Public Citizen and the Sierra Club have raised concerns about the agreement’s secrecy, corporate lobbying, whether environmental concerns will really be addressed, and whether TPP could potentially trump American laws. A chapter of the agreement published by WikiLeaks added to concerns.
Froman said the TPP process is the most transparent of any trade deal in history, citing 1,350 briefings to members of Congress and their staff members, as well as 700 “cleared advisers” that include environmental, public health and labor organizations as well as business.
These advisers have been cleared by the government to examine and comment on drafts of the TPP. Critics say the group is heavy on corporate lobbyists.
Gillian Locascio, of the Washington Fair Trade Coalition, which Froman met with last week, said “I would draw attention to the fact that access is not the same as influence.”
Another sticking point is currency manipulation. There’s also the question of human rights in such nations Vietnam and Brunei, both part of TPP. The agreement doesn’t appear to address either.
Locascio said, “As far as trade and efforts on human rights, I would reframe the question slightly. These trade agreements are no longer just about trade; they are regulating areas of life that were once regulated through democratic, accountable, flexible processes.”
Froman sees it differently.
“A lot is the frustration with globalization rather than trade agreements,” he said. “The genie of globalization is not going to be put back in the bottle. Trade agreements allow us to shape globalization, or we can be shaped by it.”
Gallup and Pew Research Center polls show that a majority of Americans are again in favor of such deals, a big shift from the depths of the recession. But Congress is another matter.
True, congressional Republicans don’t want to give Obama a win. But opposition to giving the president fast-track authority on TPP ranges from Sen. Rand Paul to Sen. Elizabeth Warren.
That would require the agreement, if it is ever finalized, to be vetted in detail by Congress. Here, it will meet much more opposition than the other neo-liberal trade deals that began with NAFTA and have been pursued by presidents of both parties.
One big problem is that other states aren’t Washington. Every state doesn’t have a Boeing, heavily supported by the federal and state government. Many have been big losers to “free trade,” with millions of jobs lost in industries ranging from machine tools and furniture to textiles.
Froman met largely supportive audiences here. His sales job elsewhere will be much more daunting.
You may reach Jon Talton at firstname.lastname@example.org
About Jon Talton
Jon Talton comments on economic trends and turning points, putting them into context with people, place and the environment in the Pacific Northwest