Trump's pledge to withdraw from Pacific trade pact worries Hawaii exporters

Trump's pledge to withdraw from Pacific trade pact worries Hawaii exporters
Updated: Nov. 22, 2016 at 6:24 PM HST
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HONOLULU (HawaiiNewsNow) - A big chunk of the bottled water bottles that roll off Menehune Water Company's assembly line every day end up on foreign store shelves.

"We have about 30 percent of our revenue from exporting. And we do expect in the future to have it significantly increase," founder and president Ken Simon said.

That's why President-elect Donald Trump's recent pledge to scrap America's participation in the Trans-Pacific Partnership is creating uncertainty for Menehune -- and other Hawaii exporters who banked on benefits from the free trade pact.

Tradewinds Global exports pet and healthcare products President Kevin Kraft said the idea behind TPP was simple: "Reduced tariffs mean increased business. Increased business is greater profitability."

During the campaign, however, Trump said free trade pacts were killing U.S. jobs and vowed to quit TPP if elected. On Monday, he reiterated that pledge in an address on YouTube, saying he would withdraw from TPP negotiations during his first 100 days in office.

Former U.S. trade negotiator Steve Craven said he thinks the trade pact among 12 Pacific nations would have created new opportunities for the United States. "We may see a few trade wars," he said.

"If you look at the TPP and particularly at the tariff reductions, the big openings would be with Japan, Vietnam and Malaysia. And Japan just dwarfs all the others," he said.

Instead of joining TPP, Trump said the U.S. will negotiate one-on-one with nations.

Simon hopes that includes China, which slaps a heavy tax on imported goods. "If that goes away or significantly is reduced, that would help our business quite a bit," he said.

But Craven believes it may now be harder for America to convince countries to partner up. "By dropping out of TPP at this point we've essentially told the world that we are an unreliable negotiating partner," he said.

Despite the new uncertainty, Menehune plans shipments to Australia next year. It would have been a Trans-Pacific Partnership partner.

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