Walmart Asia CEO: Why Congress should support Trade Promotion Authority (TPA)
{{#rendered}} {{/rendered}}FILE -- Chinese customers shop at Walmart's first Sam's Club in China's southern city, Guangzhou. (AP)
At Walmart, our purpose is saving people money so they can live better; because saving money means that families have more for what really matters: new clothes for school, healthy meals for the family and savings for a rainy day.
Lowering the cost of products we purchase and investing those savings into everyday low prices for our customers so that everyday needs are affordable and simple joys accessible is why we support free trade.
This mission has been true from the day Sam Walton opened his first store in Rogers, Arkansas, in 1962, and it remains true as we have grown into a company with more than 11,000 retail locations in 27 markets. Lowering the cost of products we purchase and investing those savings into everyday low prices for our customers so that everyday needs are affordable and simple joys accessible is also why we support free trade.
Lowering the cost of products we purchase and investing those savings into everyday low prices for our customers so that everyday needs are affordable and simple joys accessible is why we support free trade.
Trade agreements lower the price of goods for our customers by removing tariffs and other barriers that add additional costs to the products on our shelves. Unfortunately, around the world the highest tariffs are often on the products our customers need most—food, clothing and shoes—with the highest tariffs on every-day products. For example, in the United States, high-end Italian loafers are charged a 12 percent duty whereas kids’ sneakers can face up to a 48 percent duty.
{{#rendered}} {{/rendered}}Fortunately, the United States is currently negotiating new trade agreements with economies representing nearly two-thirds of total GDP. The Trans-Pacific Partnership (TPP) agreement, for example, will be a new, high standards agreement with 11 countries in the Asia Pacific. The TPP will reduce the cost of goods and increase choice for our customers in the Asia-Pacific.
In Japan, we operate 374 stores and have over 18,000 associates under our Seiyu brand and export a number of products like pork, beef, cheese, ice cream and french fries directly to those markets. Unfortunately, these U.S. products face very high tariffs -- up to 38% for beef and 27% for ice cream -- which make them more costly for our customers.
In fact, our team in Japan recently analyzed the consumer impact of Japan’s entry in the TPP and concluded that if Japan provides full market access for meat, rice, dairy and produce, the average Japanese consumer could save $320 on their annual grocery bill.
{{#rendered}} {{/rendered}}Opening these markets is not just good for our customers, it’s vitally important for our suppliers, many of whom are looking overseas to find new markets for their products.
The TPP will better position U.S. farmers, ranchers, and food processors to take full advantage of the rapidly expanding consumer markets in Vietnam and Malaysia, where U.S. agricultural exports have collectively increased six-fold over the past 10 years, reaching $3.3 billion in 2014.
For example, U.S. exports of fresh apples to the TPP countries face tariffs as high as 17 percent. Under the TPP agreement these tariffs will be cut, offering new market access opportunities to U.S. apple producers and exporters. Walmart alone exported about $73 million dollars of produce such as apples, pears, grape and cherries to our retail markets abroad last year.
{{#rendered}} {{/rendered}}Unfortunately, it’s unlikely that the United States will be able to finalize these agreements unless Congress acts on legislation known as Trade Promotion Authority (TPA).
TPA is a procedural tool that streamlines the process for Congress and the administration to work together on trade deals. Through TPA, Congress sets the negotiating priorities for trade agreements. This enables the United States to speak with one voice on trade, with clear, defined objectives. TPA also provides confidence to our negotiating partners that the agreements we negotiate won’t be changed when they are considered by Congress.
While it may sound procedural, TPA is critical if we want to complete new deals. In fact, in the past 40 years, only one trade deal has passed without TPA.
{{#rendered}} {{/rendered}}The bottom line is trade is good for our customers here and abroad and for our suppliers who want to crack open new markets. While it is procedural, TPA is crucial to new trade deals and the sooner we pass it, the sooner we can help everyone save money so they can live better.