Washington ag eyes better trade deals as Trump nixes trade deal

The Trans-Pacific Partnership would have opened new markets and reduced tariffs for a variety of Washington-produced crops.

But as President Donald Trump removes the U.S. from the controversial and complex TPP agreement, Washington’s trade-dependent agricultural industry reacted with a mix of disappointment and relief.

U.S. Rep. Dan Newhouse, R-Sunnyside, was a strong TPP supporter. On Monday, Newhouse aligned himself with the new president, saying he hopes to work with the administration on trade deals.

“Formally withdrawing from TPP is not surprising given the president’s stated commitment,” he said in a statement. “However, I am glad that President Trump also emphasized today the importance of trade and negotiating effective trade deals. I look forward to working with the president on fair deals that will increase trade opportunities that benefit American workers and exporters.”

The Washington Policy Center, a statewide policy think tank with a Tri-City office, embraced the TPP in part for its impact on agriculture.

Citing American Farm Bureau Federation estimates it notes TPP would have increased U.S. farm income by by $4.4 billion, with $246.3 million of that flowing to Washington farmers alone.

“That’s what the TPP agreement could have done,” said Madi Clark, the Kennewick-based agricultural research director for the policy center. “It’s definitely a disappointment. There’s no hiding that.”

Clark acknowledged that many in the agricultural community welcomed the new Republican administration and its promise to rewrite the rules of trade.

“The challenge is reminding them that we need to have access to these markets,” she said. With trade supporting roughly 40 percent of all jobs in the state, Washington has more to lose than most. “We’re going to be affected a lot more than other agricultural states.”

Washington’s potato industry is taking the long-term view of the TPP demise.

Matt Harris, director of government affairs for the Washington State Potato Commission, said it is heartened by the president’s interest in developing bilateral trade agreements with individual nations in place of the multi-nation TPP deal.

Harris pressed for the administration to take up negotiations as quickly as possible. Washington exports more than $700 million in frozen potato products annually, with about $200 million alone going to Japan.

He said the industry has a strong interest in negotiating trade deals that cut tariffs with countries such as Japan and Vietnam. It is eager to sell fresh potatoes in Vietnam, where consumers will pay a premium to get them. With TPP of the table, the potato growers see an opportunity to negotiate better terms.

“There is opportunity. We do support moving forward in a bilateral manner,” Harris said.

Washington hay growers were wary of TPP from the start.

Scott Courtright, secretary/treasurer of the Washington Hay Growers Association and an exporter, said too many elements of TPP were hidden. His association felt it couldn’t fully understand it well enough to support or oppose it.

By one estimate, TPP would have resulted in Washington hay growers seeing their Japanese sales cut by as much as half because Japan’s domestic dairy industry would have been dramatically reduced.

It was possible the U.S. dairy industry would have seen a commensurate increase in business as Japan turned to foreign sources to replace its domestic supply. But there wasn’t enough information to be sure the U.S would be a net winner in the deal.

Courtright hopes that new trade agreements that arise in the wake will be more transparent.

“Hay growers are in support of future trade agreements,” Courtright said. “We would just like to see more transparency.”

Wheat is one of Washington’s largest export crops and the Washington Association of Wheat Growers favored TPP because it would have opened markets.

But it recognized the new administration would shift in a new direction and adapted its goals, said Michelle Hennings, executive director. It now favors expanding trade agreements that provide new market access for U. S. agricultural exports.

Washington exports 90 percent of the wheat it produces and viewed TPP as an opportunity to expand the industry.

“We’re trying to be positive,” said Hennings, who notes Washington is well represented in Congress by Rep. Dave Reichert, the King County Republican who chairs the House Ways and Means Subcommittee on Trade.

“We know he will represent us on that committee,” she said.

This story was originally published January 23, 2017 at 5:07 PM with the headline "Washington ag eyes better trade deals as Trump nixes trade deal."