President Obama’s Pacific Rim free-trade deal gained traction this week as he signed legislation to fast-track the Trans-Pacific Partnership, setting the stage to complete the deal by the end of the year.
The National Marine Manufacturers Association has been “very supportive” of the fast track and of the TPP, NMMA export director Julie Balzano said.
“While there are no specific provisions related to marine in TPP, the overall benefits of lower non-tariff trade barriers for the countries involved is important to us, as we are a net-exporter of recreational boats,” Balzano told Trade Only Today.
Eleven countries have participated in negotiations on the deal, according to the Office of the U.S. Trade Representative: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Australia, Canada and New Zealand are already mature markets for U.S. boatbuilders, and the trade deal could help solidify that.
Some members have said that one of the biggest impacts for marine manufacturers could be the elimination of tariffs applied to U.S. exports of recreational boats and marine propulsion engines.
For example, tariffs on boats range from zero in Japan and Malaysia to as high as 10 percent in Vietnam.
Although New Zealand has a 5 percent tariff, U.S. exports of these products to New Zealand reached almost $18 million in 2014, Balzano said. Eliminating that tariff would make U.S. products less expensive and more competitive in the New Zealand market.
A similar case can be made for U.S. exports of inboards and outboards, NMMA members say.
Tariffs on those engines in the TPP range from zero in Malaysia and Japan to as high as 25 percent in Vietnam.
“Eliminating those tariffs would make the U.S. exports more competitive in those markets as well,” Balzano says.
Looking beyond the tariffs, the TPP could help raise the levels of income throughout the region and help provide the U.S. marine industry with more favorable access to a growing middle class in Malaysia, Vietnam and Brunei.
“In the past, our government has typically prioritized our industry favorably for foreign tariff removal due to its worldwide competitiveness,” Balzano said. “We are optimistic that this agreement will give our industry more opportunities to sell boats to the TPP member countries.”