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August 14, 2018

Washington's congressional delegates call for trade policy reform, not tariffs

By: Andrew Lenderman   Comments: 0
Rep. Suzan DelBene, D-WA-1, talks about trade, bipartisan solutions, and more during the AWB Federal Affairs Summit on Aug. 14, 2018 at the Greater Tacoma Convention Center. (Photo: Brian Mittge/AWB)

There are legitimate concerns with U.S. trade policy, and room for improvement. But starting a trade war with escalating rounds of tariffs is not the way to go – especially for Washington state.

That was a common refrain from the members of Washington’s congressional delegation who spoke Tuesday at AWB’s Federal Affairs Summit in Tacoma. The second-annual summit drew more than 100 employers, federal lawmakers and economic development leaders from all over Washington.

Six of Washington’s federal representatives participated, including U.S. Rep. Derek Kilmer, whose district includes Tacoma. Kilmer, (D-6), said the president has identified a legitimate problem with trade, particularly in relation to China’s theft of American intellectual property and state-owned enterprises.

But tariffs, he said, are the wrong approach.

“I would argue that the way to address that is through high-standard partnerships with our allies, where we try to set smarter rules of the road,” Kilmer said. “...Trade is going to happen. And the question is do we want it to happen with no rules, where it’s the Wild West, do we want to have it happen with rules that are set by China, or do we want to be at the table setting the rules of the road.”

The daylong conversation at the Greater Tacoma Convention Center drew leaders from agriculture, manufacturing, aerospace and other sectors who are concerned about access to markets and their ability to plan long-term investments.

U.S. Rep. Cathy McMorris Rodgers (R-5) said she wants the U.S. to move as quickly as possible from tariffs to trade deals, including the North American Free Trade Agreement.

“I believe that we need to get this settled soon,” McMorris Rodgers told attendees via telephone. “The sooner the better. I feel a sense of urgency around getting some certainty back between the United States and Canada and Mexico... We need to get an agreement in place.”

U.S. Rep. Rick Larsen, (D-2), said the administration’s current approach isn’t really a trade policy – it’s a tariff policy similar to protectionist policies of the 1880s. But there’s an easier way to improve trade relationships by simply working with tools already available.

“I think that the correct approach in 2018 and beyond, as it was several years back, is to press to change the rules of trade and then enforce those rules with our trading partners,” Larsen said.

For instance, Larsen said, the Office of the U.S. Trade Representative should continue and reinvigorate the bilateral investment treaty with China, and work on multilateral agreements with other countries.

This is an alternative to tariffs, he noted, and it requires long-term patience to be successful.

Larsen also voiced support for the bipartisan BUILD Act, which would reform the U.S. approach to financing development in lower and middle-income countries that promote the economic interests of the U.S.

And, the U.S. could also support a functioning Export-Import Bank, which finances loans and loan guarantees for America’s exporting companies.

“The U.S. can and should reinvest in existing programs to promote trade, promote investment, and promote economic diplomacy,” Larsen said. “Trade is an important tool of the U.S., and we’re not using it well enough anymore.”

U.S. Rep. Adam Smith, (D-9), said he does not disagree that trade agreements need to be renegotiated, but he does disagree with the administration’s “scattershot” approach to doing so.

The president, he said, is “using obscure portions of the law to start a trade war when quite frankly he could do it better by using the rules.”

U.S. Rep. Denny Heck (D-10) reported he was cautiously optimistic on several federal issues, including the nomination of a new board member to the U.S. Export-Import Bank. The new nominee would give the bank’s board a quorum, which means it could then approve loans and loan guarantees over $10 million. One of the bank’s services is providing U.S. companies with solutions to extend credit to foreign buyers. The bank currently has a backlog of projects worth $40 billion, he said.

“It does create jobs, the evidence is very clear,” Heck said. “It has done that since the 1930s when it was enacted.” He also noted that many small companies benefit from this service, in addition to larger corporations.

U.S. Sen. Patty Murray was unable to make the event in person, but provided a video message where she vowed to defend the state’s interests against counterproductive policies that would have devastating impacts.

“Kitchen tables and 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,” Murray said.

In addition to remarks from federal lawmakers, the event featured a panel discussion on the North American Free Trade Agreement (NAFTA), which has dramatically increased the overall trade between Canada, Mexico and the United States since its enactment in 1994.

Kilmer moderated the discussion with consul officials from Canada and Mexico, who expressed support for a fair agreement that would make the three countries stronger as a whole.

“We truly believe that having a North American economy, economic integration, is the best thing for the three countries,” said Dr. Roberto Dondisch, head consul of Mexico, Seattle. “And it’s the only way that we can compete worldwide.”

Lewis Coughlin, a Canadian consul and trade commissioner, expressed opposition to the idea of bilateral trade agreements among the three countries. That would make us less competitive, he said.

“We don’t believe in the idea of divide and conquer,” Coughlin said. “We believe…that we need a win-win-win.”

Another theme often discussed Tuesday was how the lack of certainty for employers has disrupted long-term planning and investment.

“We’re seeing that in big companies and we're hearing it from small companies as well,” Larsen said.

Kilmer said he has talked to many Washington companies, some of whom could be collateral damage in a trade war.

“There’s certainly a sense of uncertainty,” Kilmer said. “I spent a decade working in economic development. My observation is what employers want from government perhaps more than anything else is an environment of trust and predictability.”

U.S. Rep. Suzan DelBene, (D-1) painted a picture of uncertainty about where the U.S. is headed in terms of trade policy.

“We still struggle with really a vision for where we’re headed with trade,” she said. She’s been pressing administration officials on what their goals and objectives are. For example, she said, what does success look like?

In addition to a clear direction, she said, “We need real trade solutions and we need them right now.”

To learn more about AWB’s increased presence in the federal affairs arena, contact Amy Anderson at amya@awb.org or 360.943.1600.

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