Business

Overseas trade a tug of war for Washington state

WASHINGTON - International trade has always been somewhat of a double-edged sword for Washington state.

By some measurements, Washington is the most trade dependant state in the nation, and The Boeing Co. one of the largest, if not the largest,

U.S. exporter. Washington state companies exported $61 billion worth of goods and services in 2006. More than 670,000 of the state's workers have jobs linked to trade.

On the flip side are people like David Dow of Wilkeson, who was laid off from his job at a custom wood working mill two years ago because of foreign competition. Dow was retrained through a federal program and works now as a calibration technician. Washington will receive more than $14 million in federal funding this year to retrain workers like Dow - the third highest amount among all states.

Even as some profit and others see their lives turned upside down, a renewed fight over the nation's trade policies is brewing in Congress.

A law giving the White House free rein to negotiate trade agreements has expired, and the federal program that helped retrain Dow and other workers displaced by foreign competition lapses at the end of September. Some want to link the two in what has been dubbed a "grand bargain," with the White House getting its fast-track negotiating authority renewed and congressional Democrats getting an expanded training program.

"The reality is we could pull out of every trade agreement and it wouldn't change the economic problems lower- and middle-class people face," said Rep. Adam Smith, D-Wash.

Sen. Maria Cantwell, D-Wash., agreed with Smith that rather than focusing on the downside of globalization, policy makers instead need to ensure U.S. workers are competitive. Both she and Smith say the cornerstone needs to be a major expansion of the Trade Adjustment Assistance program, which helps retrain workers while providing them with expanded unemployment and heath-care benefits.

"We need TAA on steroids," Cantwell said.

In the coming weeks, Smith will introduce legislation that would triple to $660 million the amount spent annually on the program and also expand it to include service workers who are currently not eligible. About 40 percent of the applications for assistance are rejected by the U.S. Labor Department because they involve ineligible service workers.

"There is no silver bullet, no one set of skills that guarantees you a job forever," Smith said. "But there is a lot more we can be doing for workers."

Washington lawmakers have generally been staunch supporters of free trade, though their support is now tempered with a growing touch of skepticism. Rep. Doc Hastings, R-Wash., recently opposed an extension of the Andean Trade Preference Act, saying the agreement would have a "devastating impact" on Washington asparagus growers.

Smith is no stranger to the politics of trade, having previously been caught between some of Washington state's largest corporations and the more than 50,000 union members in his district. Five years ago, Microsoft Corp. pulled out of a fundraiser 24 hours after Smith had voted against a controversial trade bill.

Four trade agreements are pending - with South Korea, Panama, Peru and Colombia. The agreements were negotiated and signed when the president still had fast-track trade promotion authority, which bars Congress from making any changes. Once the administration submits enabling legislation, Congress has 60 days to vote.

"The United States must be in the game and not on the sidelines as other nations negotiate deals that disadvantage our businesses, farmers, ranchers and service providers," U.S. Trade Representative Susan Schwab said in urging Congress to renew the president's fast-track authority.

But the now Democrat--controlled Congress has shown little interest in acting, and trade critics say the administration has still not done enough to include labor and environmental safeguards along with tough enforcement provisions in the agreements.

"The big debate over fast track was the 2006 election, and the American public gave a resounding 'no' to the Bush administration's trade agenda," said Lori Wallach of Public Citizen's Global Trade Watch.

Of the four pending trade agreements, the one with South Korea is the most important for Washington state, and the most controversial on Capitol Hill. It's the state's fifth largest market, worth about $2.5 billion annually and growing quickly.

"We are having the wrong debate," said Kate Wilson, who heads the Washington Council on International Trade, a mostly business group that supports renewing fast-track authority. "We are trying to recreate an economy which is gone. We should be talking about the future and what we can do to be competitive."

If Washington state is one of the most trade dependant states in the nation, it is also one of the most trade vulnerable, said Stan Sorscher, a former Boeing engineer who is on the board of the Washington Fair Trade Coalition, which oppose the fast-track bill.

"We are all for trade," he said. "Is Boeing making money? Yes. Are workers and communities benefiting? No."

Sorscher said more and more parts on Boeing's planes are from overseas, and software companies like Microsoft are moving offshore as quickly as they can. Smith counters that Boeing has added 17,000 jobs in the Puget Sound region in the past several years and Microsoft has also been hiring.

Though he supports the need to retrain workers displaced by trade, Sorscher says the fundamental problem continues to be a global trade system that disadvantages U.S. workers.

"I don't want Trade Adjustment Assistance to be the pixie dust they throw at us while they take our lunch," he said.

Over the years, the program has helped workers from companies ranging from Weyerhaeuser and Tacoma Boat to the K-C Fish Co. in Blaine and Agrium U.S. Inc. in Kennewick.

Dow had worked for the same company for 21 years before he was laid off when he was in his early 50s. He said it wasn't easy to retrain and enter the workforce at that age. But he said he didn't have any trouble finding a new job and is making more money than he did before.

"It's rough on people, but it gives you a change to prove yourself," he said. "Out of this, I became better. You never look back."

Don Holter of Federal Way, who worked at the same mill as Dow and was also laid off, is enrolled in the program, studying facilities maintenance at Bates Technical School.

"I'm still angry about jobs leaving the country, but I can't say enough about this program," said Holter, who has a wife and five children. "It kept us going."

Before your eye glaze over, consider this about Washington state and trade:

On a per-capita basis, Washington is the most trade dependant state in the nation, exporting $8,300 per person in 2006. Texas is the second most trade dependant state, exporting $6,400 per person. The U.S. average was $3,300 per person.

When it comes to the total value of exports, Washington ranked fourth behind Texas, California and New York.

Of the state's $61 billion worth of exports last year, aerospace accounted for a little over half. Boeing says about 70 percent of it airplane deliveries are to foreign airlines.

China was the state's largest export market in 2006, followed by Japan, Canada, United Arab Emirates and South Korea.

The proposed South Korea trade agreement would benefit any number of Washington state companies. It would eliminate South Korea's 24 percent tariff on sweet cherries, 18 percent tariff on frozen potato products, 15 percent tariff on U.S. wines and 29.5 percent tariff on roasted coffee.

Washington state has received nearly $80 million over the past six years from the Trade Adjustment Assistance program to help retrain workers displaced by trade and provide them with extended unemployment benefits and health insurance. Almost 13,500 workers have received assistance.

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