More News:

January 03, 2016

As Trans-Pacific Partnership looms, interests of Philadelphia and Pittsburgh diverge

Pending trade pact pits Philadelphia's shipping prowess against Pittsburgh's industrial manufacturing base

Economy Trade
010315_PHLport Joseph Kaczmarek/AP

Tug boats guide a cargo ship up the Delaware River, Friday, Feb. 24, 2006, near the Tioga Marine Terminal in Philadelphia. Workers at the Tioga Marine Terminal say the stresses of day-to-day operations are of far greater importance to them than the swirling national controversy over a United Arab Emirates-based group's plans to buy a stake in their company. Their operation, they say, is virtually self-contained and business shouldn't be affected either way.

As the 2016 U.S. Presidential race begins to come into sharper focus, the impending fate of the Trans-Pacific Partnership, an international trade agreement between the U.S. and 11 other Pacific Rim countries, has underscored the industrial divide between Pennsylvania's two biggest cities, Philadelphia and Pittsburgh.

Backed by the Obama Administration, the final TPP deal was negotiated through fast-track legislation and approved in October by the 12 participating nations who together comprise between 35-40 percent of global GDP – making it the largest regional trade pact in history, according to The New York Times. Its implementation, widely considered a legacy objective of President Obama's economic agenda, depends on approval by Congress.

While the overall goal of the accord is to promote economic growth and competition by reducing import tariffs, raising labor and environmental standards and creating a mechanism for settling disputes, critics of the deal say it lacks adequate safeguards for digital privacy, fails to protect the environment and threatens the security of American laborers.

In Pennsylvania, Philadelphia and Pittsburgh offer a snapshot of some of the reasons the TPP has become so divisive entering an election year, the Pittsburgh Post-Gazette reports. Outgoing Philadelphia Mayor Michael Nutter recently praised the agreement in a recent White House press call, arguing it would expand market access and boost wages in multiple industries.

“The status quo puts our workers and businesses at a competitive disadvantage," Nutter said. "[It causes] higher costs for American goods, more barriers to trade and poorer standards for workers and the environment abroad than we have here.” 

As a center for international trade, Philadelphia stands to benefit from a deal that provides easier access to global markets. Pennsylvania Governor Tom Wolf, eager to maximize the opportunity, has even created a strategic plan to expand the port of Philadelphia at the Southport Marine Terminal Complex, adding as many as 3,720 jobs by 2017.

In Pittsburgh, however, where Mayor Bill Peduto faces reelection in 2017, the TPP could cripple the city's already unstable steel industry. After thousands of industry-wide layoffs in 2015, the United Steelworkers last month reached a tentative three-year contract agreement with Pittsburgh-based U.S. Steel, an deal encompassing 18,000 workers in the United States.

One of the issues compounding that negotiation was a rise in low-priced imports from China, which is not a member of the proposed Trans-Pacific Partnership, though some believe the TPP would enhance its economic power in U.S. markets without requiring improved standards. Peduto told the Post-Gazette that the TPP directly threatens the 80,000 laborers employed by Pennsylvania's steel industry.

“It doesn’t seem to be a fair trade-off. There hasn’t been an international trade agreement that has benefitted from Pittsburgh, and this one in particular — with the steel industry on its last breath — isn’t going to help...Pittsburgh is still a manufacturing center so I can’t support [the trade deal]. I’ve seen several other international treaties hurt the city and this absolutely would, too."

With the TPP further entering the fray of the 2016 election, Pennsylvania legislators at the state and national levels could increasingly find themselves torn between allegiances in Philadelphia and Pittsburgh. U.S. Senator Bob Casey and Senator Pat Toomey are each reviewing the 5,000-plus page document with an eye on considerations such as how other TPP countries could potentially undercut U.S. wages or avoid taking action against human rights violations.

Nationally, the 2016 frontrunners in both parties have opposed the Trans-Pacific Partnership. Donald Trump has called the TPP a "horrible deal," while Hillary Clinton, reversing course on her prior support for the agreement, said it will "do more harm than good" for American families and could fall prey to currency manipulation. Democrat Bernie Sanders and Republican Ted Cruz have also come out in strong opposition of the TPP.

Polls indicate that, across party lines, Americans are broadly against the deal as an expansion of status quo trade policies. In the remaining 11 nations that must approve the TPP according to their respective countries, recent Pew polls found that a majority, with the exception of Vietnam, are not in favor of the deal.

President Obama has already notified Congress of his intent to sign the agreement, which set off a waiting period for legislators and public interest groups to provide feedback before the U.S. International Trade Commission conducts an economic review. The timeline for introducing a bill to both houses of Congress remains uncertain – it could come in the throes of the election cycle or after Obama leaves office – but at that point Congress will have 90 days to come to a decision on whether to ratify it.

Despite each city's blue-collar reputation, the debate over the TPP figures to highlight stark differences between how the economies of Philadelphia and Pittsburgh will react to expanded global trade in the coming years.