In Our View: Distant Customers
New trade pacts, state programs providehope for Washington businesses
Tuesday, November 22, 2011
Suppose you own a business in this economy. Business has been bad, remains bad, and the outlook for next year is — you guessed it. Would you turn away willing customers?
Of course not. That’s why this season’s news of new free trade agreements between the United States and South Korea, Panama and Colombia is extraordinarily well-timed. After a long stalemate, Congress in October approved the agreements, the biggest trade pacts since the North American Free Trade Agreement in 1994.
The latest agreements had been sought by the Obama administration and enjoyed bipartisan support. In our region, Rep. Jaime Herrera Beutler, R-Camas, supported the measures, as did Democratic Sens. Patty Murray and Maria Cantwell.
“There is no question that these agreements will increase jobs,” said Congressman Doc Hastings, R-Pasco, in a speech on the House floor.
International trade is a cornerstone of Clark County’s economy, from the grain export terminal at the Port of Vancouver to the technology companies of Camas. In addition to companies that directly export, hundreds of other local jobs in transportation and support industries can be tied directly to foreign trade.
Extremists object to free trade agreements. Some press the decades-old argument that free trade puts U.S. firms at a competitive disadvantage for selling goods to Americans. They say free trade agreements tend to export U.S. jobs. Others, including Rep. Jim McDermott, D-Seattle, think that free trade agreements are best used as incentives to force would-be trade partners to adopt certain human rights practices. But those arguments are short-sighted. Free trade benefits consumers by providing more choices at lower prices, and it raises the standard of living both where the goods are produced and where they are consumed.
In Washington state, trade means money. Manufacturers such as Boeing and Microsoft rely on overseas customers for a large part of their revenue. But successful trade isn’t limited to big technology firms. Small businesses are exporters, too. The state commerce department reports that clients in its small business export program will have overseas sales totaling $147 million this year.
Together, the three trade deals should mean an additional $52.8 million in annual exports for Washington agribusiness, which is already exporting $1.8 billion worth of goods annually. Washington’s agricultural exports are at an all-time high. And, according to a story distributed by McClatchy Newspapers, Washington cherry, apple and potato growers expect substantial increases in sales as a result of the new trade bills. South Korea, for example, will eliminate an 18 percent tariff on U.S. potatoes and potato products.
Abundant room for growth remains. According to the state Department of Commerce, 4 percent of Washington companies are exporters. That’s good when compared with 1 percent nationally, but compares less favorably with Canada, where 6 percent of firms are exporters, or Australia’s 15 percent.
To help connect Washington businesses with export opportunities, the state departments of commerce and agriculture offer an export assistance program. In fiscal year 2011, the program tallied $241.3 million in exports among the firms it assisted. It provides small and medium-sized businesses with export training and counseling, helps them to participate in international trade shows, and assists with trading partner and market introductions.
There is no doubt that these are tough times for our economy. But recovery will come, and when it does, international trade will be an important part of the solution.