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Pacific trade pact will boost exports, bring good jobs

Rex Zhang of the U.S. Agricultural Trade Office in Shenyang, China, researches wine from Lodi-area wineries at a 2012 tasting for Chinese delegates. The U.S. trade representative says California exports would grow under the Trans-Pacific Partnership trade deal.
Rex Zhang of the U.S. Agricultural Trade Office in Shenyang, China, researches wine from Lodi-area wineries at a 2012 tasting for Chinese delegates. The U.S. trade representative says California exports would grow under the Trans-Pacific Partnership trade deal. lsterling@sacbee.com

When Dave Long took a leave of absence from his construction job in 1980, it was because he and his wife, Christine, decided to spend a year managing their almond orchard in Ballico.

Thirty-five years later, Dave is still on “leave,” and the Longs have transformed their once-modest operation in Merced County into one of the largest privately-owned almond processors in California.

Alongside old-fashioned hard work, the Longs’ story has two ingredients of a classic American recipe for success: exports and innovation. Done right, trade agreements will help more Americans write their own success stories, support more good jobs and strengthen the middle class.

Hilltop Ranch has thrived in large part because it’s reached beyond our borders, exporting to more than 70 countries. As the world’s middle class continues to grow, so too does demand for almonds and other goods that were previously unaffordable or relatively unknown in many markets. Business has been booming, and Hilltop projects an additional $50 million in international sales this year.

With the growth in exports – from 2 million pounds of almonds a year to about 55 million pounds, the number of workers has jumped from about 30 to 300. To keep pace with demand, Hilltop has hired 50 workers during the last five years.

Nationwide, rising exports have dramatically helped America’s resurgence from the Great Recession. Since mid-2009, exports have been responsible for nearly one-third of our total economic growth. Last year, exports supported 11.7 million jobs.

The Sacramento metropolitan area has contributed greatly to this “made-in-America” comeback, increasing its exports by 65 percent between 2009 and 2013. Exporting matters not only because 95 percent of the world’s customers live beyond our borders, but also because businesses that export tend to have a number of strengths. On average, businesses that export pay wages as much as 18 percent higher than non-exporting firms. Better yet, exporters tend to hire more workers and are better able to weather economic downturns. In short, more exports mean more good jobs.

A related strength, one that Hilltop shares, is that exporters tend to invest more in innovation. Since its founding, Hilltop has developed its own software for inventory and production, using advanced sorting technology that boosted both productivity and quality control. By using new tools – such as a solar array that powers 70 percent of its production facility – Hilltop has stayed ahead of the competition.

That’s essentially what our trade agreements accomplish for the United States as a whole. They help to ensure that as the global economy changes, it does so in ways that benefit American workers and businesses. Done right, they are part of a strategy for harnessing change, increasing not only America’s overall gains, but also ensuring those gains are broadly shared.

Take the Trans-Pacific Partnership, which the United States is negotiating with 11 other nations in the Asia-Pacific. When completed, this agreement will give U.S. workers and businesses unfettered access to nearly 40 percent of the global economy, including Sacramento’s top three foreign markets.

Hilltop and other California agriculture producers face a number of barriers that the trade agreement will remove. For example, U.S. shelled and in-shell almonds face tariffs of 20 percent in Vietnam, and U.S. grapes face tariffs of up to 17 percent in Japan. The Trans-Pacific Partnership will bring these tariffs and most others to zero.

Equally important, it will level the playing field for Americans by raising the bar for labor and environmental protections in the world’s fastest-growing region. Rather than putting responsible businesses at a disadvantage, we’ll set rules that promote enhanced conservation efforts, and more sustainable and inclusive growth. We’ll also tackle new issues, such as the rise of state-owned enterprises and the digital economy, which greatly impact America’s competitiveness.

To ensure tomorrow’s economy reflects our interests and our values, the United States must lead on trade. The first step in that leadership is passing fast-track trade authority, which is how Congress has worked with every president, Republican and Democrat, during the last four decades. Hanging in the balance are more good jobs, sustainable growth, and ultimately, stakes that go well beyond anyone’s bottom line.

Michael Froman is the U.S. trade representative.

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