U.S.-Korea agreement benefits all of Oregon
My View • It's time for our region to grab a larger share of Asian market
In 1840, Massachusetts sea captain John Couch was studying the depths of the rivers around what would become Portland and noted their promise of accommodating large oceangoing vessels.
In the 170 years that followed, Portland has depended on the river and later railroads and freeways to become one of the most successful trading regions in the country, fighting well above its weight class when it comes to exports and imports.
A recent Portland Business Alliance report shows that Portland-area wages are below the national average, meaning less income tax revenue for schools and social services. Contrary to what Arthur Stamoulis of the Oregon Fair Trade Campaign wrote in a recent piece, international trade is good for workers as it helps boost wages.
The study found that workers in export-related firms earn nine to 18 percent more than employees in non-export-related firms. Additionally, according to a study released by the Brookings Institution last fall, there are 286,000 Portland-Vancouver area workers who rely on some degree of international trade for their jobs.
Small businesses and good-paying manufacturing jobs particularly benefit from international trade. Fully 88 percent of Oregon exporting firms are small- and medium-sized enterprises; one quarter of the state's manufacturing jobs depend on exporting the products they make.
Trade creates good-paying jobs here in the Northwest, translating into more tax revenue for schools. That's why it has enjoyed broad bipartisan support among Democrats and Republicans from the White House all the way down to City Hall.
President Obama has committed his administration to a goal of doubling U.S. exports during the next five years. This is an incredibly important economic objective and one that our entire region should embrace, as we stand to benefit more than other metropolitan areas.
Growing U.S. exports means opening new markets for our goods and services. That's why it is so critical for the president and Congress to work together to implement trade agreements with South Korea, Colombia and Panama, which have all been negotiated and await ratification.
The South Korea agreement, in particular, would open a host of new opportunities for the Portland region and Oregon. Take Oregon wine, for example, which faces a 15 percent Korean import tariff. Under the agreement, the Korean tariff on Oregon wine would be immediately eliminated making the market much more attractive.
Do tariffs matter? In 2003, Chile signed a trade agreement with Korea and their market share for wine in Korea grew from 2 percent to 23 percent.
Korea is already a critical market for Oregon. According to the U.S. Department of Commerce, Oregon exports of machinery goods to Korea increased 224 percent between September 2009 and September 2010. Oregon exports of computer equipment increased 52 percent during that same time.
Oregon is uniquely qualified to compete and win in Korea. We've done it, even with Korean tariffs that disadvantage our goods and services. If the Korea trade agreement is approved, Korean tariffs on Oregon products will be eliminated and we will be in an even better position to fulfill the president's promise of doubling exports.
Other countries see the value of trade with Korea. Early in February, the European Union Parliament approved its free-trade agreement with South Korea. The Wall Street Journal reported that this agreement between the European Union and South Korea is expected to double during the next 20 years.
We can't forget that these trade agreements are also about the new economy. The U.S. has a global trade surplus in services, something you rarely hear about. Oregon engineers, architects, advertisers, and graphic designers are doing business all around the world. Korea has a $560 billion services market that is a tremendous opportunity for firms here in Portland and Oregon that provide global leadership in green building, creative marketing and engineering.
Local companies such as ZGF Architects, CH2M Hill, Glumac, David Evans and Associates, Weiden + Kennedy and Ziba are winning contracts in Asia, Europe, Latin America and Africa. This has kept Oregonians employed in the middle of a bad U.S. economy, but it is also a tremendous long-term market opportunity that will only make our firms stronger.
President Obama has identified passage of the South Korea agreement as integral to his goal of doubling U.S. exports. He's also committed to working with Colombia, Panama and the Congress to win passage of the two other agreements. For the benefit of Portland and Oregon, we should support him in this effort.
Doug Badger is executive director of the Pacific Northwest International Trade Association, which is part of the Portland Business Alliance. He is a former official with the Office of the U.S. Trade Representative.