Two major trade policy items – the reauthorization of the Export-Import Bank of the United States (Ex-Im Bank) and the negotiation of the Trans Pacific Partnership trade deal – had significant developments in recent weeks. Both items directly impact Washington state and the Spokane region. On Friday October 9 House lawmakers obtained enough signatures on a discharge petition to force a vote on whether to renew the Ex-Im Bank’s charter for another four years. The vote is expected to take place by the end of this month.
The Ex-Im Bank is an independent federal agency that fills gaps in private export finance. It provides trade financing solutions – including export credit insurance, working capital guarantees, and guarantees of commercial loans to foreign buyers – to assist U.S. exporters in completing foreign sales. The bank operates at a surplus, last year sending $674.7 million to the U.S. Treasury; over the past two decades Ex-Im has generated a surplus of nearly $7 billion.
Twenty-one companies in eastern Washington, 18 of which are small businesses, have utilized Ex-Im Bank since 2007, resulting in a total export value of $89 million. If you’re interested in sharing your support of the Ex-Im Bank with your Representative, you can send a letter here.
On Monday October 5, trade ministers from the countries negotiating the Trans Pacific Partnership (TPP) concluded their talks. The current members of the TPP include Canada, the United States, Mexico, Peru, Chile, Japan, Vietnam, Malaysia, Brunei, Singapore, Australia and New Zealand. These member countries represent more than 40% of global GDP and 25% of global exports, making the agreement a landmark achievement. However, the trade deal is still a ways from being ratified and implemented.
Each country’s congress or parliament must first approve the agreement. And the recently enacted Trade Promotion Authority (TPA) requires a number of review and assessment opportunities by Congress and the public. This scrutiny ensures the agreement is good for the American economy and its workers. The Peterson Institute for International Economics provides a great timeline and overview of the process to implement the agreement, as well as resources to further understand TPP.
In addition to adding new free trade agreements with Japan, Brunei, Malaysia, New Zealand, and Vietnam, TPP will upgrade current U.S. free-trade agreements, including NAFTA. The trade pact is expected to eliminate 18,000 tariffs which are currently applied to American-made products. In an effort to advance the trade agreement and garner congressional support, the Office of the United States Trade Representative recently launched a website laying out the facts of TPP and the projected economic benefits: https://ustr.gov/tpp/
With Canada, Japan, Mexico, and ASEAN Nations (which includes TPP members Singapore, Malaysia, Vietnam, and Brunei) being four of the top destinations for Spokane regional exports, local companies stand to benefit greatly from more trade freedom with TPP members. And as the trade agreement text is made public and analysis conducted (such as the requirement of an economic analysis by the United States International Trade Commission), we will get a clearer picture of the potential benefits of the trade pact.