Increasing exports is key to economic growth in Wichita and Kansas. The Trans-Pacific Partnership will help spur this growth.
The trade agreement between the United States and 11 Pacific Rim countries was finalized last fall and now awaits congressional approval. Local trade officials believe the agreement will benefit Kansas businesses in five ways:
▪ TPP makes it easier for small businesses to access the global marketplace.
▪ It removes tariffs and taxes in the partner countries, leveling the playing field in global trade.
Premium content for only $0.99
For the most comprehensive local coverage, subscribe today.
▪ It makes customs procedures more efficient and transparent.
▪ It strengthens intellectual property rights.
▪ It streamlines standards and regulations, which often are barriers for small businesses to access new markets.
The TPP countries – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – already are major trading partners with the United States and Kansas. In 2014, Kansas exported $5.9 billion in goods to these countries, 49 percent of the state’s total exports.
Eliminating most foreign tariffs will make U.S. and Kansas products more competitive. For example, tariffs on U.S. transportation equipment, including airplanes, are currently as high as 25 percent. After TPP is approved and implemented, 99.9 percent of such exports will be duty-free, according to the U.S. International Trade Administration.
Though many people may think that only large corporations are involved in international trade, that’s not the case. Nearly 1,700 Kansas companies exported to TPP countries in 2013, and 81 percent of them were small and medium-size businesses.
One such local company is Pioneer Balloon Co. About half of its business is exports. Vice president Ted J. Vlamis strongly supports the TPP agreement and believes it will help Pioneer increase sales, which will lead to a larger local workforce.
Steve Cooper, vice president at Balco, a Wichita company that manufactures architectural products, also sees benefits in exports and the TPP. After the Great Recession caused a dramatic drop in the construction industry, his company was looking at cutting 30 percent of its workforce. Instead, it focused on growing its export business and ended up hiring more workers.
The TPP is the first time a major trade agreement has specifically included a section focused on small and medium-size businesses. Karyn Page, CEO and president of Wichita-based Kansas Global Trade Services, chairs a federal trade committee that reviewed the agreement.
The Wichita-South Central Kansas Regional Export Plan aims to raise Wichita-area exports by $1.1 billion over five years. The TPP can help make that happen.