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What effect would the imperiled TPP have in California?
President Barack Obama is trying to salvage the Trans-Pacific Partnership (TPP)– a sweeping 12-nation trade pact that is a key centerpiece of his second-term agenda. On Friday, Democrats in the House of Representatives effectively shot down “fast track” authority, seen as crucial to the deal’s passage. (For a good explanation of what exactly was voted down and why it matters, read this.)
“I’m very concerned," said Roy Paulson, President of Temecula-based Paulson Manufacturing, which produces safety gear like goggles and masks for utility workers – 25 percent of which is sold overseas, according to Paulson. If the TPP is signed, Paulson is hoping exports would rise to 30 percent.
“For me, the strongest countries to break into will be Peru and Chile," said Paulson. "There’s large mining and copper deposits there, and they are in need of our types of products.”
Though how much the agreement would effect people like Paulson is up for debate; Six of the 11 countries included in the agreement – including Peru and Chile – already have free trade agreements with the U.S.
“The major beneficiaries of this agreement would not have been manufacturers and exporters," said Jock O’Connell, international trade advisor at Beacon Economics. "It would be companies that would see their intellectual property better protected abroad.”
Drug manufacturers, software makers—with some notable exceptions—and movie studios wanting stricter copyright protections overseas have been among the biggest supporters of the TPP.
"The U.S. motion picture industry is one of the most highly competitive U.S. industries around the entire world, exporting six times what it imports," Christopher Dodd, chairman of the Motion Picture Association of America, co-wrote in a letter supporting fast-track authority as part of the TPP. "When the content produced in the U.S. reaches more international markets and is distributed through legitimate channels, that economic growth means high-paying jobs here at home."
Paulson says the TPP would update and streamline existing free trade and make it easier to do business abroad.
"I know it would make easier to do business abroad, because for one thing it would mean a reduction in our tariffs," said Paulson.
In 2012, California exported about $54.2 billion worth of goods to the six countries the U.S. already has bilateral free trade agreements with—Australia, Canada, Chile, Mexico, Peru, and Singapore. And the TPP would only boost those exports, according to the Business Roundtable.
A spokesman at the Ports of Los Angeles and Long Beach said the ports are not taking a stand on the TPP, but the American Association of Port Authorities, which represents U.S. ports, had this to say:
“U.S. ports continue to be hopeful that the trade package will be able to be passed soon in Washington, D.C," Susan Monteverde, Vice-President of Government Relations at the American Association of Port Authorities, wrote in an e-mail. "If TPA [fast-track authority] is not passed, final negotiations will be delayed on trade agreements. That would delay America seeing the benefits of increased trade through seaports and the maritime-related jobs related to those trade agreements.”