A former member of the California State Assembly believes that the Trans Pacific Partnership (TPP) will be a boon for the Golden State.
In an editorial piece for the Sacramento Bee, Roger Niello explained that TPP "provides particular opportunity to California and the Sacramento region." While the free trade deal would certainly impact the U.S. as a whole, the Pacific Coast of the continental U.S. is predominantly part of California. Many of the goods leaving or heading to Asia pass through the country's most populated state. Because of this, the free trade agreement could be particularly important to California and ports such as Long Beach and Los Angeles.
Massive trade deal good for California?
The controversial trade agreement has 12 signatory members, though the countries have yet to ratify the agreement. While there's a chance it may never come to fruition in its current form due to substantial opposition, if it did it would be significant for international trade. It would be one of the largest free trade deals ever signed, covering 40 percent of existing trade. The agreement would affect around 18,000 various tariffs currently enforced by the 12 member nations.
So, TPP is a pretty big deal, and California lies within the center of its orbit. The Golden State is tops in the U.S. in terms of trade with Asia. In 2015, it exported $67 billion worth of goods across the Pacific Ocean. In particular, California has a strong trade relationship with Japan, one of the 12 TPP member nations. The state exported $11.7 billion worth of cargo to Japan in 2015. All that trade sustains jobs for more than 1 million Californians, according to Niello. By introducing a free trade deal into the mix, California stands to benefit even further from trade with Asia.
Could TPP help West Coast port recovery?
Specifically, California's ports could use the trade boost. Ports such as Los Angeles, Long Beach and Oakland are investing in infrastructure and making efforts to attract new business following a disastrous stretch in 2014 and 2015. During the labor dispute between the International Longshore and Warehouse Union and the Pacific Maritime Association, West Coast ports were plagued by historic congestion. Setbacks at the terminals led many shippers to shift trade routes east in an effort to avoid the congestion.
Since then, West Coast ports have been deep in an initiative to recover. Land-side operations are being streamlined and new technologies are boosting port efficiencies. While the recovery is not yet complete, it is certainly in progress. TPP would introduce something new to the recovery effort – increased access to Asian markets for Californian exporters. The resulting bump in trade activity could serve as an opportunity for West Coast ports to attract shippers that previously rerouted cargo, as well as new business.