Editorials

Editorial: Pacific trade deal could be a bonanza for California

As secretary of state, Hillary Clinton pushed hard for the Pacific Rim trade deal she now opposes as a presidential candidate.
As secretary of state, Hillary Clinton pushed hard for the Pacific Rim trade deal she now opposes as a presidential candidate. Associated Press file

The mammoth Pacific trade deal should be thoroughly scrubbed for potential pitfalls – and it will be before Congress votes on it.

But at first glance and on balance, the Trans-Pacific Partnership appears to offer substantial benefits, especially to export industries in California and elsewhere on the West Coast, while including important safeguards for workers and for the environment that are stronger than those in past trade pacts.

Trade ministers of 12 nations announced what would be the largest regional free-trade agreement ever Oct. 5 after more than five years of intense negotiations. The partnership countries – including Japan and fast-developing Malaysia and Vietnam – account for about 40 percent of the world’s economy. South Korea, the Philippines, Taiwan and Thailand have already expressed interest in joining.

Notably and purposely, the TPP leaves out China, which has been aggressively expanding its military and economic presence across Asia and the Pacific. The deal could help push some nations to become more democratic and closer allies, furthering U.S. security interests in the Pacific. President Barack Obama pointedly said the United States cannot allow China to “write the rules of the global economy.”

Exports are a major driver of California’s economy. The state’s $174 billion in exports last year was tops in the nation, and California also leads in exports to Asia. Three of California’s top four export markets – Mexico, Canada and Japan – are part of the TPP.

While Obama won ‘fast-track’ authority – which means Congress can only reject the entire agreement and can’t amend it – that’s no guarantee of final approval. With labor, many environmental groups and the anti-Wall Street crowd lining up against the TPP, he will have to hold the moderate center of both parties, again relying on Republican votes.

In general, lower tariffs (the White House says this deal would eliminate 18,000) and fewer trade barriers are good for the overall economy and can lower prices for consumers. It is without question that the elimination of many of these tariffs will benefit a San Joaquin Valley economy powered by agriculture.

But there are always winners and losers. The rub is how to ease the pain for those on the short end, particularly manufacturing workers who could lose out to lower-cost foreign workers. In June, Obama signed a bill extending “trade adjustment assistance,” expanding it to service workers and adding six more months of income support for displaced workers. If this deal goes through, those promises must be kept.

The TPP also offers protections for workers abroad and requires developing nations to raise labor standards. Vietnam would have to allow independent trade unions, for instance.

Still, Obama faces a tough sales job. It doesn’t help that on Oct. 7 Hillary Rodham Clinton joined Sen. Bernie Sanders in opposing it – pitting the top two Democratic presidential candidates against him.

While Obama won “fast-track” authority – which means Congress can only reject the entire agreement and can’t amend it – that’s no guarantee of final approval. With labor, many environmental groups and the anti-Wall Street crowd lining up against the TPP, he will have to hold the moderate center of both parties, again relying on Republican votes.

Because the negotiations were excessively secretive, he also must overcome suspicion about the agreement. With 30 chapters that cover intellectual property, financial services, telecommunications, textiles and more, there is plenty of fine print for advocacy and industry groups to sift through.

Before Obama can formally submit the agreement to Congress, the entire text must be available to the public for 60 days. After 30 more days, Congress can start debating the agreement for another 90 days. If it doesn’t vote no, Obama can sign it into law.

Unless fundamental flaws are uncovered, Congress should let the deal proceed.

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