The conclusion of negotiations on the Trans-Pacific Partnership early Monday brought out both supporters and detractors of the largest trade pact since the North American Free Trade Agreement.
The trade agreement among the United States, Canada, Mexico, Chile and eight Pacific Rim countries is expected to boost Colorado exports and increase foreign direct investment in the state, supporters argue.
A chief way Colorado firms will benefit is from the elimination of thousands of tariffs with five countries that currently lack a free-trade agreement with the U.S.
“It will open up the market for more of our exporters,” said Todd Pruett, a spokesman for the World Trade Center Denver.
In 2013, Colorado exported $4.3 billion worth of goods and provided $3.7 billion in services to other counties participating in the TPP, according to the Business Roundtable.
Of those totals, about $940 million in goods and $1.1 billion in services were with Japan, Brunei, Malaysia, New Zealand and Vietnam, where restrictive tariffs hamper the free flow of goods.
Beef exports account for about 23 percent of Colorado exports to new free trade agreement countries under the TPP, while oilseed and grains add another 7 percent, according to the national Business Roundtable, an association of chief executive officers.
“The outstanding issues seemed to be troublesome. It is very encouraging that they were able to conclude the negotiations,” Colorado Farm Bureau president Don Shawcroft said.
Colorado beef exporters in particular have been waiting for a final deal. Japanese tariffs on U.S. beef, now at 38 percent, will drop to 9 percent by the 16th year of the agreement, he said.
Colorado is also expected to benefit from increased foreign investments in the state, which currently support about 83,600 jobs, according to the Organization for International Investment.
More than 385 companies based in TPP countries have investments in Colorado, and the expectation is that billions more will flow into the state, creating thousands of jobs, the Business Roundtable said.
About 36 percent of those jobs are expected to come in manufacturing, the international investment group reported. But manufacturers, along with labor and environmental groups, have been among the most vocal critics of the proposed partnership.
“The TPP is not free trade and it is not fair trade,” said Kevin Kearns, president of the U.S. Business and Industry Council, which represents small and medium-sized manufacturers. “It is government-managed trade.”
Opponents zero in on the agreement’s lack of provisions to limit currency manipulation, which they say could put more downward pressure on long-stagnant wages for U.S. workers.
“The United States could have negotiated an effective TPP that addressed currency manipulation, reduced greenhouse gas emissions and harmonized financial regulations upwards,” argued Robert Scott, director of trade and manufacturing policy research at the left-leaning Economic Policy Institute.
Instead, he said, the TPP supports a regulatory race to the bottom that will benefit multinational corporations at the expense of consumers and workers.
Colorado’s two U.S. senators, responding to the agreement, seemed to engage in role reversal.
Republican Sen. Cory Gardner voiced support for the agreement, which would rank as a signature trade pact of the Obama administration if Congress approves.
“The Trans-Pacific Partnership has the potential to reshape America’s relationship with the nations of the Pacific Rim, enhance U.S. leadership in this critically important region, and provide a major boost to our economy,” Gardner said in a statement.
Democratic Sen. Michael Bennet, known for supporting the President in tough legislative battles, seemed non-committal.
“He will carefully review the details of the Trans-Pacific Partnership agreement to determine if we can enforce higher standards for workers, businesses and the environment,” Bennet’s spokeswoman Laurie Cipriano said.
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or @aldosvaldi
