One of the Natural State’s best kept secrets is its wide array of existing and evolving global trade efforts.
Right now, national leaders are figuring out how to implement one of the biggest trade deals since President Clinton’s North American Free Trade Agreement (NAFTA) – it’s the Trans-Pacific Partnership (TPP).
The TPP is a 12-nation (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, United States, and Vietnam) trade deal. Together, these countries represent 800 million people and generate nearly 40% of the world’s Gross Domestic Product (GDP). It’s truly an effort to build stronger relationships and connect more with the Asia Pacific.
So why does the TPP matter to Arkansas?
The Natural State’s export shipments of merchandise in 2013 totaled $7.2 billion. From 2011 to 2013, Arkansas exported $3 billion annually in goods to all TPP markets. During that time period, almost half of the state’s total goods exported went to the TPP region.
Dan Hendrix, CEO of the Arkansas World Trade Center, located in Rogers, tells me: “The TPP is a very important trade agreement with the goal of increasing U.S. exports to the eleven participating countries by eliminating trade barriers and tariffs which currently restrict the sales of goods and services to these countries. Currently 40% of Arkansas exports go to the TPP region. The Trade Promotion Authority must be renewed by Congress for this and other Trade Agreements to ever become a reality.”
With the potential expansion of the TPP region, Arkansas is uniquely positioned to capitalize on business development opportunities through further globalization of a market that has proven to be ripe with profits. And for our beloved state to continue to grow in the areas of economic development, she should always look to further expand new business opportunities with our hometown and global neighbors.
According to the Office of the U.S. Trade Representative, the U.S. exported an estimated $700 billion in goods and services to all TPP markets in 2013, which equates to about 44 percent of our nation’s total exports. So, from an economic development and profit-driven perspective, one understands why our nation is interested in deepening our relationships with the Asia Pacific.
Metal manufacturing, transportation equipment, and processed foods are the major Arkansas business sectors contributing to the $3 billion in exports to the TPP region.
Even with all of TPP’s potential, it does present challenges. National leaders will have to answer tough questions around opening up markets, addressing public health regulations, and figuring out fair labor costs. In order to protect both Arkansas workers and businesses, these leaders must tread lightly and make thoughtful decisions.
The larger point is that while TPP is global, it is simultaneously local. It affects Arkansas. We need to keep a close eye on how this national trade effort affects the Natural State.