The Atlanta Journal-Constitution
Across state, hope, concern over trade deal
Complex pact creates uncertainty for businesses weighing costs, benefits.
Pondering the impact of the recent international trade deal on his dairy farm in Madison, Everett Williams is sifting through a lot of hopes and fears.
What does a trade agreement with Japan, Vietnam and 10 other countries mean to a second-generation farmer 60 miles east of Atlanta? A lot, if the Trans-Pacific Partnership means that cheaper dairy products from New Zealand flood the market and cut his profits.
At the same time, the agreement negotiated last week in Atlanta might put more money in this milk-producer’s pocket, should it open new overseas markets for him and his 1,600 cows.
“Until we know what the details are, it hard to decide,” said Williams, 61.
A similar anxiety has flummoxed businesses across Georgia as they struggle to understand the complex, farreaching agreement. International trade is a multibilliondollar industry in Georgia, so the deal has generated a lot of interest.
Optimism generally trumps doubt in the business community, especially among chamber of commerce officials and company executives who believe more trade means more profits.
But many effects remain unclear, and the deal has been savaged by groups as diverse as labor unions, environmentalists and the tea party. It faces an uncertain fate in Congress and with lawmakers in other nations.
Though the deal was only completed this past week, The Atlanta Journal-Constitution found that debate is already flaring across Georgia.
The deal carries huge potential for Georgia exporters, said Mary Waters, deputy commissioner for international trade for the Georgia Department of Economic Development. Five of Georgia’s top 10 trade partners are in the TPP trade zone. Another, Vietnam, is a top 10 trade partner for Georgia agricultural products.
“Georgia will find more customers in these growing markets,” said Leslie Griffin, senior vice president for international public policy for Sandy Springs-based shipping giant UPS. And more trade creates jobs, she said.
“We have an expectation that our customers will be more successful and thus ship more volume, and we will need employees to support that,” she said.
Teamsters union leaders, however, are telling their 13,000 members in Georgia — who include UPS drivers and sorters, along with bus drivers, dairy workers and others — that the deal is a job killer. Once American companies can trade more easily with these countries, many will simply open plants overseas to take advantage of the cheaper labor, they say.
“I think it’s a bad deal for American workers, and Georgia as well,” said Eric Robertson, political director of Teamsters Local 728 in Georgia. He compared it to the North American Free Trade Agreement, which he said “sent textile companies and auto plants moving to Mexico and Latin America” after it took effect two decades ago.
The lack of specifics has left Georgia business people sorting through a welter of voices and opinion pieces on the TransPacific Partnership, which officials say will lower barriers between a dozen countries on both sides of the Pacific.
The TPP covers segments of the global economy as diverse as automotive manufacturing, dairy production and even the length of patents on certain classes of prescription drugs.
Full details of the plan aren’t expected for a month, and the pact still must go through Congress and be approved by the president and the leaders of the other countries.
Until then, a cloud of speculation, spin and vitriol surrounds the largest trade pact ever negotiated.
Down in the weeds
Way down in the weeds of the TPP agreement is Tim Stone, who’s driven an ice cream delivery truck for years out of Mayfield’s distribution center in Marietta.
Dairy and poultry have been two big points on the agricultural side of the debate. Georgia is one of the world’s top producers of chicken and eggs, and the U.S. was seeking the end of various tariffs.
Stone, a member of the Teamsters union, said he fears dairy products from other countries might flood the U.S. market under looser trade rules, hurting his company and endangering his job and those of other drivers.
Stone, 46, said the TPP has been the talk of the union hall. He said he started to read about it about a year and a half ago, and his co-workers ask him about it.
“If we lose these good jobs today in 2015, they’re not going to come back,” he said. “That’s going to hurt Georgia’s economy for years to come.”
In contrast, Melissa Coleman-Grina, senior director of sales at Aventure Aviation in Peachtree City, hopes the deal will streamline customs procedures and eliminate red tape that can stymie business. Currently many of the company’s shipments of aircraft parts get hung up in customs in foreign countries due to various importing rules and regulations.
The TPP promises to streamline the process, which she said could speed both deliveries to customers and payments. The company, which does 80 percent of its business internationally, could see business grow, creating more job opportunities, she said.
Small-business challenges
The pact covers trade between the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Georgia exports in excess of $18 billion in goods and services to countries involved in the trade agreement, according to a coalition of protrade groups.
Overseas ventures present tough, and costly, challenges for small and medium-sized companies. Companies often have to obtain federal licenses, travel to these countries and hire extra employees who specialize in exports.
Alan Wolkin, president of an Atlanta family-run business, doesn’t have an army of lawyers and consultants to help navigate customs laws. If he wants to sell his company’s crib mattresses and baby changing pads overseas, he and his employees — including his sons and brother — are the ones who would have to figure out tax laws, regulations and how to ship bulky mattresses across oceans.
That’s why Wolkin is hopeful a trade deal might help his company, Colgate Mattress Atlanta Corp., gain easier access to Canada, South America and maybe Asia.
“I like it if it will help grow our business,” said Wolkin, whose Cabbagetown company played host to mayors and the U.S. trade representative earlier this month. They highlighted Colgate as a mid-sized company that could benefit from the Trans-Pacific Partnership.
Wolkin said he hopes the trade deal will lower the logistics costs and cut through the bureaucratic barriers of doing business overseas. Shipping containers on a freighter can cost thousands of dollars each, and countries all have different customs rules that the TPP is said to help standardize. But it’s the details that aren’t yet known that concern him.
“We’ll take it as an opportunity to try, but will it pan out? I can’t give an answer to that,” Wolkin said.
Wolkin also worries that the deal could open the U.S. market to competitors that might undercut Colgate on price and quality.
The pact addresses intellectual property rights, but he wonders if protections will be strong enough to prevent Colgate’s new products and designs from being ripped off by imitators.
Impact on consumers
So what does this mean for consumers? Will it bring down prices?
The National Retail Federation claims the agreement will benefit Georgia families by bringing down the costs of goods.
It notes that the TPP agreement could eliminate the 32 percent tax on man-made fiber sweaters from Vietnam.
It also asserts that pumping up cross-border investment grows jobs. But some experts say Georgians need to take these claims with a grain of salt.
Jeffrey Berejikian, a University of Georgia associate professor of international affairs, said the trade group’s statement is “framed in the best possible light.”
It cherry-picked extreme examples of tariffs that could be cut, he said. But tariffs for goods coming into the U.S. are generally low, and Berejikian believes such cuts would result in a “marginal benefit” on prices here.
He agrees that the pact could help produce many jobs, but slowly over years.
“New trading partners would have to emerge and judge whether Georgia is attractive,” he said.