Arizona exporters tout benefits of Trans-Pacific Trade Partnership

Containers are stacked in a port in Valparaíso, Chile. In 2012, the U.S. exported $22 billion worth of goods to the South American country. (Photo by Alicia Clark/Cronkite News)

The 12 countries that negotiated the Trans-Pacific Trade Partnership released long-awaited details of the deal they struck behind closed doors and Arizona companies expect to benefit.

“Last year we sold to 55 different countries, international sales are 50 percent of our business.” said Donald Zipperian, Vice President and Chief Technical Officer of Pace Technologies.

Zipperian runs a business that manufactures products such as precision wafering saws, metallographic polishers and more.

Zipperian is excited about about new opportunities in Asian countries where he already does business including Malaysia, Japan, Singapore and Vietnam.

Pace Technologies now pays hefty tariffs as high as 50 percent on some products it exports to Malaysia.

Zipperian launched Pace Technologies in 1997 in his Minnesota basement. The company has since moved to Tucson and has a lab at the University of Arizona.

Pace Technologies now has 25 distributors around the world and Zipperian expects the TPP to help his company grow even more.

“In the last three years our business has doubled and doubled because we have increased exports and distribution around the world.”

In 2014 the United States set its fifth consecutive record for international exports totaling $2.35 trillion according to U.S. Secretary of Commerce Penny Pritzker.

Arizona saw a record number of exports in 2014 of more than $21 billion.

The bulk of the exports, $8.5 billion, went to Arizona’s number one trading partner, Mexico.

The TPP would facilitate trade with other countries, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The deal will expand existing trade agreements the U.S. has with six of these countries and open up new opportunities in Brunei, Japan, Malaysia, New Zealand and Vietnam.

All together the TPP countries account for 15 percent of global trade.

The Office of the U.S. Trade Representative says the deal would eliminate 18,000 different tariffs imposed by other countries on U.S. exports.

According to Business Roundtable, an organization of CEOs of major American corporations promoting “sound public policy and a thriving U.S. economy,” 58 percent of Arizona’s international exports currently go to TPP countries.

“The TPP will help build on these trade and investment relationships and support the Arizona jobs that depend on them,” Business Roundtable, which supports the deal, wrote in its report.

What the supporters are saying

Barack ObamaJohn McCainDoug Ducey

(Photo courtesy of whitehouse.gov)

“This partnership levels the playing field for our farmers, ranchers and manufacturers by eliminating more than 18,000 taxes that various countries put on our products. It includes the strongest commitments on labor and the environment of any trade agreement in history, and those commitments are enforceable, unlike in past agreements.”

— President Barack Obama in a statement on the TPP.

(Photo courtesy of Wikimedia Commons)

“The TPP … presents a significant opportunity to expand Arizona’s more than $19 billion in international trade, spur economic growth, create new jobs and keep costs low for our state’s consumers. Today, Arizona companies that engage in international trade with many Asia-Pacific countries must pay steep tariffs as high as 70 percent and face other barriers on certain exports to most of the region. The TPP will remove these barriers … Early estimates indicate this vital trade agreement will create 17,000 new jobs for Arizonans and significantly expand foreign direct investment in our state.”

— Sen. John McCain (R-Arizona) in a press release on the TPP.

(Photo by Curtis Spicer/Cronkite News)

“I think it (the trade agreement) means very positive things for Arizona. It means positive things for any state that is going to embrace free-market economics and international trade.

— Arizona governor Doug Ducey in a Cronkite News article.

As of 2012, 83,000 Arizonans were employed by foreign owned companies and as of 2014, 93,354 jobs were supported by Arizona export production, according to figures from Business Roundtable.

Richardson said TPP would be a huge benefit to Arizona export industries. Such industries include aerospace, electronics, agriculture, cosmetics and the growing biomedical technologies sector.

“Passage of TPP will go a long way to not only improve trade relations with much of the Asian rim but will allow Arizona products to get on the shelves of consumers (in Asia) more easily,” said Kristian Richardson, Director of U.S. Commercial Service in Arizona and Executive Secretary of the Arizona District Export Council.

“And that’s good for everybody. Why should (Arizonans) care? Because it will increase jobs here in Arizona.”

While TPP has support from companies, politicians and non-profits, there is also strong opposition.

What the opponents are saying

Bernie SandersHillary ClintonDoctors Without Borders

(Photo courtesy Wikimedia Commons)

“Free trade agreements … have forced American workers to compete against desperate and low-wage labor around the world. The result has been massive job losses in the United States and the shutting down of tens of thousands of factories. These corporately backed trade agreements have significantly contributed to the race to the bottom, the collapse of the American middle class and increased wealth and income inequality.”

— Sen. Bernie Sanders (I-Vermont) in a statement on the TPP.

(Photo courtesy of Wikimedia Commons)

“I did say, when I was secretary of state, three years ago, that I hoped it would be the gold standard. It was just finally negotiated last week, and in looking at it, it didn’t meet my standards. My standards for more new, good jobs for Americans, for raising wages for Americans. And I want to make sure that I can look into the eyes of any middle-class American and say, ‘this will help raise your wages.’ And I concluded I could not.”

— Former U.S. Secretary of State Hillary Clinton in the first Democratic debate of the 2016 race.

(Photo courtesy of Mack Male/Flickr CC)

“Damaging intellectual property rules in the U.S.-led Trans-Pacific Partnership Agreement (TPP) would give pharmaceutical companies longer monopolies over brand name drugs. Companies would be able to charge high prices for longer periods of time. And it would be much harder for generic companies to produce cheaper drugs that are vital to people’s health.”

— Humanitarian aid organization Doctors Without Borders in a press release denouncing the TPP.

“Only one out of 10 small and medium-sized business in Arizona export their products,” said Rebekah Friend, executive director, secretary-treasurer of the AFL-CIO’s Arizona chapter in an AZCentral opinion piece.

“Local business would benefit more from policies that raise wages for working families and invest in local infrastructure,” wrote Friend.

Opponents worry that rather than creating and bolstering jobs in the United States, corporations will have more incentives to move overseas seeking cheaper labor.

Richardson says this is not a valid concern and the supposed jobs that would go to other countries are already there.

“With the passage of the TPP you’re not going to hear this great sucking sound of jobs going away overseas,” he said.

Some public health groups are skeptical of the deal, which they said could allow pharmaceutical companies to spike drug prices and make it more difficult for generic drug companies to produce cheaper drugs.

Members of Congress on both sides of the aisle united to both support and oppose the TPP. In May the Senate gave President Obama fast track authority to negotiate the trade pact.

During that time contributions to Senate campaigns from the US Business Coalition for TPP spiked.

The money behind the TPP

At least 19 technology companies have voiced public support or donated to Senate campaigns of federal lawmakers.

Steve Zylstra, president and CEO of the Arizona Technology Council, says this deal could strengthen intellectual property protection rights, a concern for technology companies of all sizes.

“Some of the countries that are part of TPP have not always been known to be forthright in protecting our (American) intellectual property,” said Zylstra.

“So the commitment to this that is shared with them (other TPP members) is really important.”

The Office of the U.S. Trade Representative’s website dedicated to the TPP says the agreement stands up for human rights, promotes good governance, protects workers and the environment, guarantees food safety and ensures a free and open Internet.

Some organizations for retired Americans are also concerned about a spike in drug prices.

“It’s going to affect the price of drugs. most likely not allow large government agencies to negotiate cheaper prices because that would be ‘unfair competition,'” said Doug Hart, president of the Arizona Alliance for Retired Americans AARA, is concerned senior citizens in the United States.
Hart.

“The senior cost of living went up quite a bit this year. That would be our primary reason we think it’s a race to the bottom,” Hart.

Fact sheets and answers to frequently asked questions from the office of the United States Trade Representative tries to dispel concerns about drug prices, and other issues opponents have raised.

The deal still must win approval from Congress but lawmakers cannot change amend the trade agreement. A vote expected in Spring 2016.

Arizona companies that want to increase their global exports are excited about the new possibilities.

“The big thing is if you take a look at the worldwide economy, only five percent of the world’s citizens live in the United States,” said Zipperian.