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From Billings to Brunei

A Ninth District view of the Trans-Pacific Partnership

September 6, 2016


Phil Davies Editor, fedgazette (former)
Ashwini Sankar Research Analyst
From Billings to Brunei

Last fall, the United States signed an ambitious trade agreement that would lower trade barriers and raise labor and environmental standards in 11 Pacific Rim countries with a combined population of 490 million.

Under the terms of the Trans-Pacific Partnership, current U.S. Free Trade Agreement partners such as Canada, Mexico and Singapore would remove taxes on many U.S. exports and ease restrictions on service firms doing business in foreign markets. And TPP would open up new export markets in five countries—Japan, Malaysia, Vietnam, Brunei and New Zealand—that don’t have a free trade relationship with the United States


Ninth District manufactured exports slip in 2015

Ninth District manufactured exports tumbled 4.7 percent to $44.4 billion last year, likely due to a strong U.S. dollar and lower demand for goods from major trading partners. Among district states, the value of exports ranged from a 14.5 percent decrease in North Dakota to an almost 2 percent increase in Montana, the only district state that posted gains. Meanwhile, U.S. manufactured exports dropped about 6 percent.Read more

The Office of the U.S. Trade Representative says the pact would eliminate 18,000 taxes on American products and services in the 11 TPP nations. Examples include pork (taxed up to 20 percent in Japan), trailer parts (up to 30 percent tax in Malaysia) and self-adhesive tape (a 17 percent tariff in Vietnam). But not all taxes will be removed, and some will persist for years. The deal also requires TPP signatories to toughen environmental standards, mandate a minimum wage and recognize trade unions in their countries.

Lawmakers in all 12 countries must ratify the agreement. In the United States TPP has stirred controversy. The Trade Representative’s office, many business groups and other supporters say that by increasing trade, the deal will promote U.S. innovation and foster GDP and employment growth. Critics say it will hasten the export of U.S. manufacturing and service jobs to countries with cheap labor.

Here’s a Ninth District view of the current state of trade between the region and countries involved in this landmark agreement.

Ninth District exports to TPP countries, 2015

Zoom in to see all TPP countries
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Exports to new FTA countries* from Ninth District states

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* Japan, Malaysia, Vietnam, Brunei and New Zealand
Source: WISER Trade