Increasing Washington's International Competitiveness - Seattle Propeller Club

Increasing Washington’s International Competiveness Through Policy Seattle Propeller Club March 21, 2012 Increasing Washington’s International Competiveness March 8, 2012

About WCIT The Washington Council on International Trade is dedicated to growing our states economy throughpublic policies favorable to expanded opportunities in the global marketplace. WCIT members are farmers, manufacturers, retailers, service providers, non-profit organizations and individuals who support a strong trade policy that benefits Washington’s small, medium and largecompanies and creates jobs for Washington residents. Increasing Washington’s International Competiveness March 8, 2012 2

The Role of WCIT•Educate Washington’s elected officials about trade policyissues that impact Washington’s international economiccompetitiveness.•Engage the business community and others in activelysupporting policy changes that increase Washington’sinternational economic competitiveness.•Serve as a repository of data and information oninternational trade in Washington. Increasing Washington’s International Competiveness March 8, 2012 3

What is Trade? All International Business is International Trade• Aerospace & • Professional Services Manufacturing • Global Health• Agriculture • Int’l Tourism• IT • Int’l Education• Retail Increasing Washington’s International Competiveness March 8, 2012 4

Why Exports Matter• $64 billion in 2011 from commodities (Supports at least 1 in 4 jobs in WA)• 202,300 jobs directly supported by exports• Estimated $16+ billion in services exports• 95% of consumers are outside the U.S• 90% of exporting companies are SMEs• WA ports handle 7% of U.S exports & WA is the 5th largest commodity exporting state (behind Texas, California, Florida and New York) Increasing Washington’s International Competiveness March 8, 2012 5

Why Imports Matter• $86 billion in 2011 from commodities• 250,000 state jobs supported by WA ports• Foreign direct investment employs 93,200 Washington workers• Increased supply chain competitiveness for Washington’s retailers and manufacturers• Increased capacity for exports Increasing Washington’s International Competiveness March 8, 2012 6

WA Trade Advantages • Natural deep water ports • Good river navigation • Diverse industries • Geographic proximity to Canada & Asia • High percentage of foreign born workers and students Increasing Washington’s International Competiveness March 8, 2012 7

Top Export Commodities Increasing Washington’s International Competiveness March 8, 2012 8

Top Trade Partners Increasing Washington’s International Competiveness March 8, 2012

Ex-Im Bank Reauthorization• The Export-Import Bank of the U.S (Ex-Im Bank) is a credit agency assisting companies, large and small, to export goods and services to international markets.• Ex-Im Bank’s authorization expired on September 30, 2011. Congress has extended its operations through May 31, 2012.• In 2011, Ex-Im Bank lent Washington approximately $7 billion to 74 WA companies, including 56 small businesses. In return, more than $16 billion of export sales were made. Increasing Washington’s International Competiveness March 8, 2012

Russia PNTR• Russia is the world’s 11th largest market with a large middle class consumer base, but it is only the United States’ 37th largest trading partner.• Washington is one of the top 5 states in the country in terms of exports to Russia, Washington’s exports to Russia grew 80% in 2011, while the state’s exports to the world increased by only 16%.• United States must approve “permanent normal trade relations” (PNTR) status with Russia to take advantage of this market opportunity (because of Jackson-Vanik). Increasing Washington’s International Competiveness March 8, 2012

Harbor Maintenance Tax “Land Border Loophole”• The Harbor Maintenance Tax (HMT) is a federal tax imposed on shippers based on the value of the goods being shipped through ports.• HMT’s “land border loophole”: tax is not assessed on importers who route cargo through non-U.S. ports and then move their cargo into U.S. markets by land.• The “land border loophole” makes it cheaper for international importers to divert cargo to non-U.S. ports, such as those in British Columbia, to avoid the HMT in Washington. Increasing Washington’s International Competiveness March 8, 2012

Trans-Pacific Partnership Regional Trade Agreement• Asia-Pacific regional trade agreement being negotiated by the United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam.• Asia-Pacific region is the largest market for U.S. exports (including 2/3 of U.S. agricultural exports). In 2010, 69% of Washington exports went to Asia-Pacific countries.• TPP could serve as a framework into which other Asia-Pacific countries might eventually enter. (Japan, Canada, Mexico and South Korea have already expressed interest.) Increasing Washington’s International Competiveness March 8, 2012

Affordable Footwear Act and the US OUTDOOR Act• AFA would eliminate most shoe import tariffs ; US OUTDOOR Act would eliminate disproportionately high tariffs on “recreational performance outerwear.”• These tariffs were originally implemented to protect domestic industries that no longer exist, which means the only impact of these tariffs today is to make these products more expensive for U.S. consumers.• Washington is home to a significant number of retailers that import footwear and performance outerwear: REI, Amazon, Nordstrom, Brooks Sports and Eddie Bauer. Senators Murray and Cantwell are co-sponsors of the AFA, and Representative Reichert introduced the House version of the US OUTDOOR Act. Increasing Washington’s International Competiveness March 8, 2012

Increased International Visitors Through Travel Visa Reform• The current U.S. visa application process is a huge barrier to trade with some of the world’s fastest growing markets, such as China, India and Brazil.• A visa application can take as long as 145 days in Brazil and 120 days in China. As a result, the United States welcomed the same number of travelers in 2010 as it did in 2000.• The United States would have welcomed 78 million more visitors – generating $606 billion in spending and 467,000 jobs – if our country had simply kept its historical share of world travel growth. Increasing Washington’s International Competiveness March 8, 2012

Increased U.S. Competitiveness in Trade with China• China is Washington state’s top trading partner, and the destination of over 17% of Washington’s exports in 2011. These figures don’t capture the economic impact of the global supply chain relationships, nor the new Chinese joint ventures being developed by a diverse mix of Washington goods and services firms.• US & China have an increasingly successful and productive relationship, yet significant room for progress remains – from disagreements over currency valuation to improved intellectual property rights protections.• Rather than efforts to "punish" China through retaliatory tariffs, the best way to achieve a sustainable, competitive U.S.-China trade relationship is through enforcement of existing rules along with engagement toward mutually beneficial changes. Increasing Washington’s International Competiveness March 8, 2012

Other Potential Policy Issues Federal Issues State Issues•Trade Promotion •Investment in freightAuthority mobility•Export controls reform •State Commerce &•Investment in freight Agriculture foreign salesmobility promotion•Increased bilateral trade •International Marketingwith the EU budget (tourism, FDI) Increasing Washington’s International Competiveness March 8, 2012

How Many WA Jobs Are Tied to Trade? Increasing Washington’s International Competiveness March 8, 2012 18 18

Questions? www.wcit.org @WashingtonTrade erics@wcit.org 206.389.7273Increasing Washington’s International Competiveness March 8, 2012

Increasing Washington's International Competitiveness - Seattle Propeller Club

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