How proposed trade alliance would impact Nevada

By Megan Messerly

Friday, Nov. 13, 2015 | 9:15 a.m.

The Trans-Pacific Partnership — a major trade accord struck by President Barack Obama with 11 Pacific Rim nations in October — is far from a done deal, but it could have a major economic impact on Nevada.

To highlight the economic advantages of the trade alliance, U.S. Secretary of Commerce Penny Pritzker released a series of reports Thursday detailing how the accord would impact each state’s economy.

“With reports like those that we’re releasing today, our businesses and our workers are going to understand the significant opportunities for job growth here in the United States that will result from TPP,” Pritzker said.

It would be months before the deal could be approved.

The president notified Congress last week that he intends to sign the agreement within 90 days. But the deal still needs congressional approval, and Congress could take additional time to vote on the agreement.

Many Democrats, including three running for president, have pushed back against the deal, saying it jeopardizes American jobs, threatens health and safety standards and benefits international corporations. It may be up to the Republicans to shepherd the deal through Congress, though many Republican leaders have remained mum on the deal.

Here are some of highlights about how the trade accord could impact Nevada’s economy.

Nevada exported $2.3 billion to countries covered under the partnership in 2014.

That includes $245 million to Japan, $75 million to Malaysia and $9 million to Vietnam — three countries in which the U.S. did not previously have preferential market access. That $2.3 billion made up 30 percent of all the state’s exports in 2014 — still less than the national average of 38 percent. Thirty-one percent of Nevada’s exports — the largest share — went to Switzerland that year, $2.3 billion dollars in goods, largely gold.

Of the 1,691 Nevada companies that exported goods to those countries in 2013, 86 percent were small- and medium-sized businesses.

That percentage falls roughly in the middle compared to other U.S. states.

One of the main criticisms of the accord is that it benefits the interests of large corporations. The administration says the agreement opens up foreign markets for smaller businesses.

“The reason the president pursued this agenda is to make sure that our workers, farmers, ranchers, and small business are able to take advantage of the fact that 95 percent of the world’s consumers live outside of the United States,” Pritzker said.

Businesses in Nevada’s export industries would no longer have to pay foreign import taxes to new partner countries.

Those countries are Brunei, Japan, Malaysia, New Zealand and Vietnam, countries with which the United States did not previously have preferential market access.

Nevada’s two top exports are gold and copper. The state exports about $98 million per year to those new partner countries. Right now, companies have to pay up to a 35 percent tariff on those goods, but under the accord, 94.8 percent of those exports would immediately be duty-free in those countries.

Other major export sectors in Nevada that will be impacted by the agreement are information and communication technologies, consumer goods, machinery and high-tech instruments.