Seattle’s Tight Focus on Trade

By John Talton, June 10, 2013, Seattle Times

The Trade Development Alliance of Greater Seattle held its annual dinner last Thursday. Gov. Jay Inslee was the keynote speaker. I was on a panel with Len Jordan of Madrona Venture Group and Jeff Frazier of Microsoft, moderated by Bill McSherry of Boeing. Major sponsors were Boeing, Microsoft and Highline Community College. Among those buying tables were the Port of Tacoma, the Port of Seattle, the Port of Everett, Seattle Metropolitan Chamber of Commerce and Washington State Department of Commerce. In addition to public officials and business people, attendees included consular officials of other countries.

It was an evening that attested to the power of trade here, and to this community’s interest in the wider world. Both are big advantages. Gov. Inslee promised the state would do what it could to win the 777X, said Washington would “feast at the table of technology” and touted the increase in cherry exports under the new Korean-U.S. trade agreement as well as the 100,000th Chrysler exported from the Port of Gray’s Harbor. Our panel was put through the paces in predicting such things as China’s growth and Middle East air traffic in 2013. I’ve worked in cities and states that only gazed at their navels, measured economic success in the number of new tract houses built. This is far better.

On the other hand, we live in our own bubble. Washington is a net winner from the trade status quo. The same is not true everywhere. For example, a year after the free-trade agreement with South Korea was signed, the U.S. trade deficit was larger and the promised increase in American jobs hasn’t happened. South Korea is a currency manipulator, too.

The larger trade deficit can’t be divorced from high unemployment at home, no matter how much we’re getting cheap stuff from Asia. The old adage, used to sell NAFTA and other trade agreements, that the United States is the world’s largest trading nation and always benefits from these deals has been shown to be wrong. China is now the world’s largest trading nation. And speaking of cheap stuff, we should be wrestling with the horrible conditions facing workers who make it — and the consequences for employment and wages at home. The lethal garment industry in Bangladesh is exhibit A. In the 1960s, we bought close to 100 percent of our clothing from factories in America; in the 1990s, it was 50 percent. Now. after the last tariffs were allowed to expire in the mid-2000s, around 2 percent of apparel is made in America.

The unspoken questions in the room included these: Will the American people indefinitely support a trading system that, for many, kills their jobs and drives down their wages? And will they continue to support a World Trade Organization that allows China to play by its own rules to the detriment of American national interests? The answers aren’t easy, because the winners from this trade arrangement hold political power — intellectual power, too (who wants to be labeled a “protectionist”?). But the status quo is shaky and resists reform.

We didn’t talk about climate change. That will affect trade in myriad ways, from the availability and demand for food, to destabilizing whole populations. We did talk about China, on the eve of the Obama-Xi get-to-know-you-in-the-desert-heat summit. A century ago, the established world power, the British Empire, had labored to manage the peaceful rise of the new power, Imperial Germany. It was the golden age of trade and globalization before our era. The way things turned out is a cautionary tale that screams at us today.

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