Commerce Secretary: New Hampshire Will Benefit From Trans-Pacific Partnership
The Obama Administration is touting the economic benefits of the Trans-Pacific Partnership, a trade deal between the U.S., Japan and 10 other Pacific Rim nations.
The deal known as the TPP would need approval by Congress before it could take effect, and the US Commerce Department has been trying to build support for the deal by highlighting the potential benefits for each state’s economy.
U.S. Commerce Secretary Penny Pritzker joined Weekend Edition to discuss the TPP and New Hampshire's economy.
What's the elevator pitch, so to speak, for the Trans-Pacific Partnership to companies and people in New Hampshire?
You know, not since the World Trade Organization over 20 years ago have we seen an international trade agreement that covers such a diverse group of companies and represents the various levels of development and many different social and political cultures, such a large portion of the global population that is covered by the Trans-Pacific Partnership.
The Trans-Pacific Partnership offers the largest expansion of enforceable labor rights in history. It represents the most far-reaching environmental commitment, and enforceable through commercial dispute settlement, of any international agreement. It also lowers tariffs on 18,000 different products, gives American companies access to the fastest growing middle class on Earth.
I know the Administration sees this agreement as a win for every part of the country, but of course every state economy is different. What factors would make the TPP more beneficial for a particular state versus another?
Let's take New Hampshire for example. New Hampshire exports about $1.4 billion of goods to all the TPP countries, with all these tariffs in place. Tariffs like a 35 percent duty on information communication technology, which New Hampshire sells about $29 million worth of products. Or 35 percent tariff on chemicals that New Hampshire sells about $13 million of products to TPP countries. Or a 59 percent tariff on machinery which New Hampshire exports about $28 million to TPP countries.
Take New Hampshire - 32 percent of its total exports go to TPP countries. About 1,400 of your companies in New Hampshire export goods to TPP countries. 86 percent of which are small or medium-sized businesses. This is not just true for New Hampshire, this is true acorss the country. The vast majority of companies that will benefit from this agreement are small and medium-sized businesses.
A numbers of analysts in this state have looked back over two decades since the North American Free Trade Agreement, or NAFTA, which was for New Hampshire something of a mixed bag. Some companies gained access to Mexican markets, but others saw layoffs and saw business decline. How much of that should we be concerned about if TPP goes through?
I think you have to think about the Trans-Pacific Partnership as access to the fastest-growing middle class on Earth, 500 million middle class consumers in the Asia-Pacific growing to about 3.2 billion in the next 15 years.
I talked to you about how the tariffs are coming down, but also the rules of the road are favoring American businesses, because it will make our labor force more competitive because this agreement requires other countries to raise their labor standards, including Mexico, including Malaysia, including Vietnam. This agreement really has something for everybody, and offers a lot to the folks in New Hampshire. This opens up new markets to so many of your companies that today can't access these markets - maybe not because of tariffs but maybe because of the customs regulations. In TPP, there's a whole chapter focused on small and medium-sized enterprises to address things like the complexity of customs, or making sure that regulations are reliable so that a small business can take advantage of a market around the world.
You mentioned the rules of the road being different in this trade agreement - but there's always the caveat about "if they're enforced." Vietnam, for example, has been loudly opposed to allowing independent unions - how confident are you that these rules of the road will be enforced?
First of all, on the labor standards, the countries are required to have plans to raise their labor standards, all of which have been worked out to date. So they're on record as to what precisely they're going to do.
Second, the Department of Commerce plays an extraordinarily important role in enforcing these trade agreements. We monitor these agreements and then we work to bring WTO and other enforcement cases as necessary. This agreement has very strong enforcing provisions, much stronger than NAFTA. That's something that is very much high on our priority list, to make sure that we get the benefit of this agreement that's been negotiated.
You don't need me to tell you that there's been a partisan split on TPP, with many Democrats opposed and many Republicans in support. New Hampshire has a split congressional delegation - two Republicans, two Democrats - and a fair number of presidential candidates coming through the state. What questions would you like New Hampshire residents to ask about this deal as they interface with their members of Congress and those who would like to be President of the United States?
The question I would ask is, I don't understand why you would oppose this deal if what it's going to do is lower tariffs and raise my access and protect me better as I try to sell my goods to the 96 percent of customers that live outside the United States.