Published in the Oregonian October 10, 2011
Oregon is one of the most trade-dependent states in the nation. At a time when our state’s economy is teetering on the brink of another recession, our ability to export and trade with the world is the one economic bright spot that is helping to keep our region afloat. Fortunately, there is an opportunity to enhance our international trade, as Congress considers ratifying three trade agreements with Colombia, Panama and South Korea.
While Colombia and Panama are small markets for Oregon, they are important markets for U.S. goods and services. Oregon companies are pushing more aggressively into Latin America, and sales to these countries will certainly rise over time with greater access. For Oregon, however, the South Korean agreement presents an enormous opportunity.
Trade agreements are good for Oregon exporters because they eliminate tariffs that U.S. exporters pay as they enter foreign markets. For example, in 2003, Chile signed a trade agreement with South Korea, and their market share for wine grew from 2 percent to 23 percent. U.S. winegrowers still pay an average tariff of 15 percent on wine exports to South Korea and are priced out of most of the market. This trade agreement with South Korea would eliminate this tariff, opening new markets for Oregon winegrowers.
South Korea is a perfect growth market for Oregon products and services. Our economy is Asia-facing, and the overwhelming volume of our exports is bound for the Pacific Rim. South Korea is our fifth-largest export market and growing rapidly. In 2010, Oregon exported $936 million worth of industrial and agricultural goods. This year, our exports are up 18 percent, and we expect to reach $1.1 billion in sales to South Korea. But this data only captures the export of goods; South Korea has a $560 billion services market that will present an enormous opportunity for Oregon firms.
Oregon needs these trade agreements to be ratified quickly. In this crowded global marketplace, our foreign competitors are gaining market share as a result of their own trade initiatives. This past summer, the European Union ratified its trade agreement with South Korea, and Canada is wrapping up negotiations on its own agreement. The question is not whether South Korea will expand trade with the world, it is whether the U.S. and Oregon will compete or continue to lag behind.
Through these trade agreements, Oregon workers can compete and win against foreign competitors. Earlier this year, the U.S. Department of Commerce’s Bureau of Economic Analysis revealed that Oregon’s durable manufacturing sector was growing faster than any other state’s. The growth in this manufacturing sector alone expanded the state’s gross domestic product by 3.4 percent, the largest contribution to growth in the country.
Late last year, our organizations, along with the Port of Portland, issued a study on international trade that found there are 470,000 jobs in Oregon that are directly tied to trade. Another recent study, conducted by the Brookings Institution, found that 268,000 jobs in the Portland area alone are supported by international trade. There is no mistaking this fact: Oregon is connected to the world, and our ability to expand market opportunities will lead directly to what we need most: job growth.
With another economic dip sitting on the horizon, the time is now for Congress to enact these trade agreements. Oregon workers and families need Congress (and the person who wins the 1st Congressional District seat) to open these doors to new markets and enable our state’s companies and workers to add jobs and prosperity.
This commentary was written by Jay Clemens of Associated Oregon Industries, Ryan Deckert of the Oregon Business Association, Duncan Wyse of the Oregon Business Council and Sandra McDonough of the Portland Business Alliance.
