02/04/16- Miami- Stefan Selig, undersecretary of commerce for international trade (AM Holt)
U.S. Commerce Undersecretary Stefan Selig met with South Florida business leaders Thursday to garner support for ratification of the Trans-Pacific Partnership, the largest trade agreement in history, signed hours earlier in New Zealand by ministers from 12 member nations.
“This will be the biggest, most important trade agreement ever in the history of the world in terms of expanding market access,” Selig said. “It will immediately eliminate 18,000 tariffs on day one on American exports. It will eliminate 59 percent of tariffs on U.S. machinery, up to 70 percent on autos, 40 percent on poultry. This agreement will set a new gold standard for global trade rules.”
In addition to immediately lifting tariffs on 98 percent of exports to member countries, ratification of the agreement would change a host of government policies by adding anti-corruption measures and intellectual property protection, cracking down on employment discrimination and child and forced labor, bolstering occupational safety and health standards, and increasing government transparency and minimum wages. The agreement also addresses subsidies for state-owned enterprises in the member countries and either eliminates or limits them over time.
Despite criticism, Selig, a senior trade diplomat in the Obama administration, said the agreement also benefits the environment.
“There is going to be in TPP the most robust enforceable environment commitments of any trade agreement ever in history,” he said. It requires government commitments to fighting wildlife trafficking, illegal logging and fishing, protecting the ozone layer and prohibiting fishery subsidies that harm nearby fish populations.
“Fourty-four percent of our goods exports currently go to TPP markets, so it’s extraordinarily important,” Selig said. “Those goods exports support 3.1 million and in terms of services over 1 million American jobs. It’s not just the quantum there, but also the jobs tend to be better jobs that pay 18 percent higher wages. When you get a sense of the quantum of those numbers that it’s clear we’ve got to get TPP done.”
The TPP is of special importance in South Florida, which handles two-thirds of the state’s exports and is the seventh-largest export hub in the U.S. with $38 billion in exports in 2013, he said. The region is home to about 30,000 export businesses, many of them small businesses. In 2013, 14,000 Florida companies exported to those markets.
“This is one of the elite export hubs in the United States,” Selig said.
In 2014, TTP markets accounted for Florida exports totaling $12.5 billion, or over 20 percent, Selig said. The second-biggest economy in the TPP is Japan, which accounted for $1 billion, about $200 million to Malaysia and $120 million to Vietnam.
The agreement would make member markets more accessible to small- and medium-sized U.S. businesses that don’t have the money, risk tolerance or global manpower to facilitate international trade, he said. The agreement is important to maintaining market access to the fastest-growing regions of the world. China already has free trade agreements with some of the TPP countries, and the TPP makes it a more level playing field, Selig said.
The trade official met with business leaders at an invitation-only roundtable and later with the Association of American Chambers of Commerce in Latin America and the Caribbean to garner support for the agreement. After years of negotiations, the agreement must be ratified in each country. Selig said although some of the issues are sensitive, particularly in an election year, he hopes Congress will approve the measure soon because of the enormous cost of delays.
The agreement would expand U.S. trade with Mexico because the North American Free Trade Agreement does not include products with components made in non-NAFTA countries.
“It helps to make the U.S. more competitive. We need the momentum of new agreements to spur new trade and new opportunities,” said Lee Sandler, founder of Sandler, Travis & Rosenberg, the trade law firm hosting the roundtable. “The good side is that opens up markets and eases access to the markets for U.S. exporters.”
Most tariffs would be phased out over time on exports like apparel and footwear, industries that have traditionally have been protected in the U.S., he noted.
“It creates greater opportunities for U.S. importers from those countries,” Sandler said. “But it also creates a complication that’s rarely talked about, which is that we already have trade agreements with a lot of the TPP countries. Anyone dealing with those countries in the U.S. has to figure out whether are you better off under the old agreement or the new agreement because the two will co-exist.”