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Matt Leu: Fresno needs trade agreements like TPP

Matt Leu
Matt Leu

President Barack Obama is gathering support for the Trans-Pacific Partnership, an ambitious trade deal among 12 nations that would open markets in Asia up to goods produced in the U.S. As general manager of Cargill’s food production plant, which employs more than a thousand people in Fresno, I’m reminded every day how important trade deals like the TPP are for California jobs.

California is the country’s second-largest exporting state. One out of five jobs in our state depends on international trade. California is renowned for the products it sells abroad, including high-tech hardware and software, film and entertainment, and food and agricultural products.

Here in Fresno County, we typically produce more agricultural goods annually than anywhere else in the country, and the food we produce feeds people around the world.

Opponents of trade often play on fears that trade agreements will make us unable to compete with countries in the developing world that have lower labor and environmental standards. The reality is that the United States already has among the lowest tariff rates in the world – it’s our trading partners who still have high competitive barriers to American goods.

The TPP and other modern trade agreements President Obama is seeking would help to reduce the high tariffs our trading partners in Asia place on U.S. products. These tariff rates can be as high as 40 percent for many agricultural products produced in Fresno, including at the Cargill plant. The TPP would set higher labor and environmental standards for some less advanced economies in Asia. These changes would help level a playing field that today is skewed against high-quality products produced in America.

When we’ve signed trade agreements in the past, we’ve usually seen rapid increases in demand for our exports. For example, California’s exports to Canada and Mexico have more than tripled since the North American Free Trade Agreement was enacted 20 years ago. Similarly, California had almost no exports to Chile before the U.S. signed a trade agreement with the small South American economy a decade ago. Since then, our state’s exports to Chile have soared more than tenfold, to $2.2 billion.

The TPP offers even more economic potential for California because it involves countries that make up 40 percent of the world economy. The agreement also would strengthen our country’s relationships with important Asian countries including Japan, Malaysia and Vietnam.

We recently were proud to welcome Rep. Jim Costa, who represents Fresno and the San Joaquin Valley, to Cargill’s plant to talk about the importance of trade. Earlier this year, Costa was among a group of California congressmen who voted in favor of trade legislation to advance TPP negotiations. His decision to stand up for American workers who depend on trade to support their families deserves our praise and support.

Matt Leu is general manager of Cargill’s Meat Solutions business in Fresno.

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