On April 29, history was made when Japanese Prime Minister Shinzo Abe addressed a joint session of Congress, making him the first-ever Japanese prime minister to do so. When he was in Washington, D.C., I hope that our representatives communicated to Abe our country’s long-term commitment to Japan and the Asia-Pacific region.
The best way to do this is to express support for the Trans-Pacific Partnership (TPP), a significant international free-trade deal that will strengthen and expand our ties abroad and solidify the economic partnership between the United States and Japan.
Japan is the fourth-largest export market for the U.S. and the third-largest economy in the world, but it is not in a current free-trade agreement. The TPP would fix that and help eliminate barriers and open the door for expanded trade — bringing greater cooperation and increased economic activity and benefits to our state. Reducing barriers to foreign trade is a critical economic priority and necessary to ensure that our country stays competitive.
California’s economy is deeply tied to the Japanese economy and the Asia-Pacific region. Overall, 8 percent of our state’s exports are sent to Japan, and this includes leading industries like agricultural products, processed foods, computer and electronic goods, and transportation equipment. Furthermore, Japan is our country’s second-largest source of foreign investment, which plays a key role in the state and national economy.
According to the U.S.-Japan Business Council, employment by subsidiaries of Japanese companies supported 110,000 jobs in California alone in 2010. And California ranks first nationwide in exports to Japan, valued at $13.1 billion in 2012, and also ranks first in services exports to Japan at $6.9 billion in 2012.
Passage of the TPP will strengthen the business and trading relationships between our businesses at home and the fast-growing economies of Japan and the Asia-Pacific region. And the TPP will set the stage with rules that reflect the high standards and critical business protections that our companies and our workers want and deserve.
Increased opportunities to grow exports plays a valuable role in bringing economic prosperity to local economies by increasing jobs and wealth, and helping to grow local industries. One out of every five American jobs is tied to exports, and trade currently supports 4.7 million jobs in California. Companies that export have a proven track record of providing higher wages, adding jobs, spurring innovation, and bringing increased stability to their operations in times of economic downturns. Expanding trade — both exports and imports — will benefit our state’s workers in a wide range of industries.
The economic stakes are high, and we can’t afford to let the Trans-Pacific Partnership fail. The TPP partners encompass two-thirds of the world economy — a market of nearly 500 million consumers with a combined GDP of nearly $12 trillion. This market must be taken seriously and approached strategically in order to shape the future economic playing field for the U.S.
Total U.S. trade with TPP countries is $1.5 trillion in merchandise trade and $242 billion in services. In 2010, California exported almost $12 billion to these select countries, roughly 14 percent of the U.S.’ exports.
According to the U.S. Small Business Administration, more than 95 percent of the world’s consumers live outside of the U.S., but only 1 percent of our small businesses are selling to them. If the U.S. wants to maintain its position as a global economic leader, we must reduce barriers to trade and increase ties with the Asia Pacific region. Passing the TPP is critical for small business exporters as they often do not have offshore affiliates to help them overcome trade barriers and gain market access.
Now is a great time for California Asian American and Pacific Islander small businesses to increase their exports, but in order to do that, lawmakers need to eliminate long-standing tariff and non-tariff barriers to trade. By supporting the TPP, lawmakers will demonstrate to the American people and Prime Minister Abe that our country is serious about being a global leader and we are ready to increase trade with the fastest-growing economic region in the world.
Pat Fong Kushida is president and CEO of CalAsian Chamber of Commerce, the largest statewide ethnic chamber in California, with the mission to grow and empower the API business community throughout California. Opinions expressed are not necessarily those of The Rafu Shimpo.