Washington’s stake in ongoing trade talks

Container cargo being unloaded
The Association of Washington Business (AWB) hosted U.S. lawmakers representing Washington and trade stakeholders to discuss how the state’s economy is tied to current trade negotiations and where to focus efforts down the line. Photo: Pxhere

Washington state needs to position itself to best take advantage of Asia’s consumer boom, which is where trade stakeholders believe businesses will reap the most benefits. That is just one takeaway from the Association of Washington Business’ (AWB) 2018 Federal Affairs Summit, hosted Aug. 14 in Tacoma.

During the event attendees heard from Washington trade stakeholders, members of the agricultural community and public officials about the importance of trade discussions and how the state’s economy and industries are being affected.

The event focused on Washington’s business community and its stake in international trade, taxes and other federal affairs. Featured speakers discussed the trade relationships between Canada, Mexico and the U.S., the status of tariffs and their effects on the Washington economy, as well as where Washington should focus its efforts to best benefit business owners both large and small.

Over the past few months, Washington businesses in sectors including agriculture and construction have reported challenges stemming from the escalating trade war between the U.S. and trade partners including China, Mexico, Canada and the European Union. Several companies have reported increased material costs and difficulty selling their product amidst ever-changing trade negotiations.

During the “Trade Today in Washington State” panel, event goers heard from stakeholders working with exports and agricultural products.

David Konz, Risk Management & Government Affairs for Tidewater Transportation & Terminals, spoke to the effect the current trade negotiations are having on commodities traveling through the ports.

Tidewater primarily exports white wheat down the Snake and Columbia Rivers. Konz said that luckily the product has not been impacted by the tariffs. However, other popular ag products leaving via the river are not so fortunate.

“If you talk to those that handle corn and soybeans, they are very concerned. I’ve chatted with some of my peers and some of the traders out there and there is a lot of uncertainty of what is going to happen.”

The Soybean crop is typically harvested in October, which is where there will be a lot of potential concern.

“The uncertainty doesn’t help for business,” Konz said.

U.S. Sen. Patty Murray (D-Washington) sent in a video played at the event and remarked on the importance of creating and maintaining trade pathways for Washington industries.

“As business leaders of one of our nation’s most trade-dependent states, I know I don’t have to tell this group about the importance of maintaining and strengthening our trade relationships… Small businesses in communities across our state depend on a robust economy powered by free and fair trade, not to mention strong relationships with partners around the world,” she said.

Murray said she will continue working with organizations such as AWB and listening to business owners’ concerns about fighting “counterproductive policies that would have devastating consequences on so many of our family, friends and neighbors.”

Kristin Kershaw is the Director of Corporate Affairs for Domex Superfresh Growers and Kershaw Companies, a Yakima-based agrobusiness that is one of the largest suppliers of apples, pears and cherries all over the world.

Kershaw spoke to the state’s $4 billion fresh fruit industry where $1 billion goes to export each year. The largest markets for the sector are Mexico and Canada, followed by India and several Asian countries.

The industry has “absolutely exploded” since the North American Free Trade Agreement (NAFTA), and the sector has used the money to invest in the community and evolves based on consumer needs.

“If you take a little drive out to Wenatchee, you’ll see that apple tree that you once knew doesn’t look anything like what has been planted out there. We took that money and replanted and invested in the kinds of apples consumers want today and it has been great for us. We have transformed the American market for consumers.”

The sector wants to build on the successful growth and follow it into Asia. Kershaw said it is $3,000 cheaper to ship a container of produce anywhere in the Asia Pacific than to ship to Boston.

“That’s where we are going to see the growth…whether it’s Boeing airplanes or Washington apples,” she said, adding that the world is preparing for the largest expansion of the global middle class since 2007. Some 2 billion more consumers will exist by 2030, primarily in Asia.

“Asia is poised for some phenomenal consumption-driven growth, and we want to be there.

“When we start talking about trade …and barriers to trade and tariffs, what we are really saying is if we can’t resolve it…we really don’t want to participate – that we are going to sit out the largest explosion of middle-class growth and potential consumers the world has ever known.”

 

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