Here's why your choice for president may impact global trade in Utah


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SALT LAKE CITY — Utah's economy is among the strongest in the country, the nation's political and economic future hinge on the outcome of the upcoming presidential election, and it will be up to the leaders of Congress and the new president to set the tone and course of the country in the months following the historic election, a beltway journalist told business leaders Monday.

Edward Luce, Financial Times chief U.S. columnist, talked trade and politics to the 400 people gathered at the Grand America Hotel for the Utah Global Forum. The annual event focuses on strengthening relationships between the local business community and its national and international commerce partners.

Trade and Utah's economic strength also provided the backdrop for an announcement by Gov. Gary Herbert of the formation of an exploratory committee to consider the development of an inland port in Utah. Despite potential changes in U.S. trade policy, Utah is positioned to be a key port in the West to spur global trade.

“For the first time in modern American history, the candidates of both main parties oppose modern trade deals,” Luce said. “America’s role has been to uphold global trade and push it forward and negotiate big deals, but even Hillary Clinton said that (the Trans-Pacific Partnership) will be dead in (her) administration.”

The Trans-Pacific Partnership is a trade deal among 12 of the Pacific Rim countries, not including China. The purpose of the agreement is to "promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in the signatories' countries; and promote transparency, good governance, and enhanced labor and environmental protections.”

Though finalized in February, the agreement is still awaiting ratification. Despite initially supporting the deal, Clinton has indicated that she no longer favors the agreement, which Luce said could have a significant impact on global trade.

“From the point of view of the rest of the world, this is a very troubling moment because the world — even detractors — is used to American leadership,” he said. “If America is going to walk away from a deal that it authored and negotiated, the signal that it will send is a very powerful negative signal about the future of American leadership.”

He said if Clinton wins the White House, she would likely have to figure out a way to get the trade deal ratified by Congress despite her recently stated misgivings about the agreement. On the other hand, if Trump prevails, Luce said the “apocalyptic” concerns raised by many critics might be overblown.

“A Trump victory would be a complete departure from everything we know about America,” he said. “It would be a rejection of globalism, a rejection of American leadership on the world stage and a rejection of America’s alliances and its close allies.”

He said that whoever wins the presidency, the West will be perceived to be “declining.” He noted that perception is a critical component of power, and “if the perception is that you are weakening, then in fact you are weakening.”

“A Trump victory would hasten this notion that the West is no longer the West that we used to know, and America in particular is no longer the America we used to know,” Luce said.

The middle class

On the economic front, Luce said the major concern of the country in the time ahead would be the state of the middle class.

“It’s their pessimism about their children’s future that is causing this political populism that we’re seeing today,” he said. Populism is a belief in the power of regular people, and in their right to have control over their government rather than a small group of political insiders or a wealthy elite.

He said the way the next president and Congress address the concerns of the middle class, their skills, employability and their children’s future will provide an answer to the question of whether American democracy “is going off the rails” or going to get back to a working pattern where politics can function.

“The middle class is ‘ground zero’ of our age,” Luce said. That notion is understood by leaders in Washington and would require strong conviction in the face of stiff opposition from the far right and far left wings of the two major parties to make progress in addressing the concerns of the middle class, he said.

“It’s going to require character of leaders to override these polarizing trends,” he said. “I’m not that optimistic, but (it) can happen.”

Lauren Walker, senior vice president of Global Operations for Young Living Essential Oils, speaks during the Utah Global Forum at the Grand America Hotel in Salt Lake City on Monday, Oct. 24, 2016. (Photo: Nick Wagner, Deseret News)
Lauren Walker, senior vice president of Global Operations for Young Living Essential Oils, speaks during the Utah Global Forum at the Grand America Hotel in Salt Lake City on Monday, Oct. 24, 2016. (Photo: Nick Wagner, Deseret News)

Luce also noted that the next president would have to address the growing threat that North Korea, led by unpredictable dictator Kim Jong Un, is close to developing the capability of sending long-range nuclear missiles to the U.S. mainland and other alliance countries. The potential for military action is definitely a possibility in the not so distant future, he said.

“It’s very hard to see how this (situation) can end peacefully,” Luce said. “The next president is going to have to make a decision that if Kim Jung Un can’t be ‘arm twisted’ to walking away from his nuclear program, will there be preemptive war? I’m not a big fan, but if ever there was a case for preemptive war, it’s a questionably sane 31-year old possessing nuclear capacity with no checks or balances to strike America’s allies and possibly America itself.”

Inland port for Utah?

Herbert's port announcement was based on findings from a study conducted by the Kem C. Gardner Policy Institute and commissioned by World Trade Center Utah. It reveals that the state meets many of the essential criteria for developing an inland port.

“Despite anti-trade, isolationist rhetoric at the national level, Utah remains committed to promoting international trade,” Herbert told the business audience. “(The inland port) would be designed to accommodate commerce and the distribution of goods and services centered out of Utah.”

Inland ports are sites located away from traditional land, air and coastal borders that possess strong transportation assets and inland distribution centers. Goods are offloaded from ships and moved to inland ports for handling and redistribution.

Utilizing air, rail and roads, an inland port can fulfill functions such as a satellite customs clearance terminal, an intermodal distribution facility and customs pre-clearance for international trade.

Approximately 22 percent of Utah jobs are supported in some way by international business, Herbert said. The study provides recommendations for next steps civic leaders may consider.

“The creation of an inland port would elevate Utah’s status as a global business destination and incentivize international companies to locate here,” Derek Miller, World Trade Center president and CEO, said. “Utah’s centralized location, market access and favorable labor costs are just a few reasons constructing an inland port may make sense.”

He said World Trade Center Utah would use the study recommendations to secure additional information about the feasibility of the proposed project and work to move the idea forward. If developed, an inland port could produce hundreds of long-term, well-paying jobs in various employment sectors, Miller said.

He said the proposal is in the preliminary stages of consideration. Full development would take three to five years and cost hundreds of millions of dollars. Other states have successfully developed inland ports, including Greer, South Carolina, and Dallas, he said.

“The ease of use would help our exporters and it creates a center of gravity for exporters to want to come to,” Miller said. “It would also boost the economy of the surrounding states so their exporters have easier access to (global) markets. It really continues to put Utah on the map at the ‘crossroads of the West’ as a state that is interested in international business.”

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