Washington's economy thrives on trade and exports
By Kris Johnson
With the recent attention on renegotiating trade agreements and potential new tariffs, it’s worth remembering that Washington state’s economy thrives on trade and exports.
Washington state leads the nation in exports per capita and ranks third in overall exports, according to the latest figures from the U.S. Census Bureau. Forty percent of Washington jobs are related to trade in some way, according to the Washington Council on International Trade.
That includes everything from apple growers in Wenatchee, french fry manufacturers in the Tri-Cities and boat builders in Kitsap County to music stand makers in Yakima and farmers and manufacturers in every corner of the state.
So, while there are justified concerns about some of our partners’ trading practices — and renegotiating trade agreements can help ensure fairness and mutually beneficial deals that support American companies — we need a thoughtful, strategic approach that ensures the U.S. remains a trade leader.
Pulling back from global trade will weaken Washington’s economy, not strengthen it.
If we needed proof, we saw a glimpse of what a pullback would look like during the 2014-15 West Cost ports slowdown. The slowdown stalled Washington state imports and exports during a six-month labor contract dispute.
Apples, hay and Christmas trees sat in containers. Critical parts and materials from overseas to build everything from carbon fiber to car parts to snowshoes floated on vessels with nowhere to dock. Food manufacturers resorted to loading goods onto airplanes to get them to customers on time.
By the time it was over, the economic loss to Washington state was estimated at $770 million. Factories slowed production and lost customers, some of whom never returned. Agricultural products lost value and people lost paychecks.
That experience, short-lived as it was, served as a wake-up call to the value that exports add to Washington’s economy.
The value of trade was at the forefront again during the push to reauthorize the Export-Import Bank in 2015. The Association of Washington Business helped lead the effort to reauthorize the bank’s charter, noting that it has served for decades as a resource for businesses of all size and all industries looking to export their goods. And, AWB continues to call on leaders to restore the bank to full capacity by appointing additional board members.
Now, trade is in the news on multiple fronts, including potential tariffs with China, Washington’s largest trading partner, and a renegotiating of NAFTA, which includes Mexico and Canada — Washington’s second-largest trading partner.
These are critically important issues for Washington’s economy.
John Wolf, CEO of The Northwest Seaport Alliance, recently testified before the U.S. House Ways and Means Committee about the effects of tariffs on Washington jobs and the economy. He noted that the Seattle and Tacoma ports are the fourth-largest container complex in the country and Sea-Tac Airport is the ninth-busiest airport.
Much of the traffic in and out of those transportation hubs is linked to $27 billion in imports from and exports to China. Approximately $8 billion in two-way trade pass through the Seattle and Tacoma ports and Sea-Tac International Airport.
NAFTA is important to Washington, as well. Washington’s exports to Canada increased 200 percent between 1996 and 2015 and exports to Mexico rose 700 percent during this period, according to the Washington Council on International Trade.
Clearly, there’s room for improvement on trade policy. But it’s just as clear that robust trade is good for Washington’s economic health.
Kris Johnson is president and CEO of the Association of Washington Business, the state’s chamber of commerce and designated manufacturing association.