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How to kill Puget Sound jobs

Want to try to think of a policy that would discourage investment, send money to other U.S. port cities to rob Tacoma and Seattle of jobs, and even send business to Canada? No imagination is required.
A container ship in Prince Rupert, British Columbia. The port there is viewed as a growing competitor to U.S. Pacific Northwest ports.

A container ship in Prince Rupert, British Columbia. The port there is viewed as a growing competitor to U.S. Pacific Northwest ports. Stephen Rees/Flickr

Online editors are always trying to get their writers to engage readers. So, for this month’s trade policy column, let’s play a game. Here’s a fun one: “Try to come up with a trade policy that really disadvantages the Puget Sound region.”

What characteristics would this policy have? Well, first off, let’s make it so that this policy would disincentivize companies from doing business in the Puget Sound region (a pretty basic starting point, I’d say).

Second, how about we create something that invests in other states that are trying to compete against us?

And just for good measure, let’s pretend that this same policy is actually important to other regions around our state, so that the Puget Sound region can’t get rid of it entirely without negatively impacting fellow Washingtonians.

Guess what? That policy already exists. It’s called the Harbor Maintenance Tax. But the good news is that there might finally be an opportunity at the federal level to improve it.

The Harbor Maintenance Tax (HMT) is a federal tax imposed on shippers based on the value of the goods being shipped through ports. The tax revenue is designed to be placed in a trust fund for maintenance dredging of federal navigational channels. Many ports in our state — like those along the Columbia River — rely on HMT funds to make the infrastructure investments necessary for freight to move along our state’s waterways.

Unlike those other Washington ports, however, Puget Sound ports have naturally deep harbors that don’t need much dredging, and so they see little benefit from HMT investment. In fact, a majority of HMT revenue goes to dredge East Coast and Gulf Coast ports that are increasingly our competitors. On the Seattle Metropolitan Chamber of Commerce's recent visit to Georgia, we saw firsthand how, in anticipation of the Panama Canal widening, the Port of Savannah is making major investments to prepare for cargo that is currently being offloaded on the West Coast.

But what really causes concern for Puget Sound ports  is the “land border loophole” created by the HMT. While the tax is assessed on ocean-going international imports that land at U.S. ports, it is not assessed on importers who route cargo through non-U.S. ports (such as Canada and Mexico). Those ports then move their cargo into U.S. markets by land. This disparity makes it cheaper for international importers to divert cargo to non-U.S. ports such as Prince Rupert in British Columbia to avoid the HMT in Washington.

Washington’s congressional delegation has been focused on the impacts of the loophole, and — at the delegation's urging — the Federal Maritime Commission issued a notice of inquiry last fall “to study the impacts and the extent to which the U.S. Harbor Maintenance Tax, other U.S. policies, and other factors may incentivize container cargo to shift from U.S. West Coast ports to those located in Canada and Mexico.”

The findings of that inquiry are due any day now. If the maritime commission confirms that cargo is shifting away from the United States because of the tax and the land border loophole, it may finally create the momentum in Congress necessary to address the problem. While the Puget Sound ports have long raised this issue, a federal confirmation of the problem can be used as a powerful tool to spur action.

The United States could find a way — without violating our trade agreements with Canada — to ensure that pass-through goods entering our country from Canada pay an equivalent fee. Or Congress could make HMT investments more beneficial to the Puget Sound ports; allowing HMT investments in non-dredging freight mobility projects – such as roads and rail – might be one such solution.

The proposed new basketball arena and the relocation of the grand alliance of shippers from Seattle to Tacoma have both brought renewed energy to the ongoing conversations about how Puget Sound ports can compete in the changing global economy. While there are many opinions on how to best do this — from increased coordination to more (and more strategic) investments — addressing the HMT’s diversionary impacts would significantly improve competitiveness for the Puget Sound’s ports.


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Comments:

Posted Fri, Jul 6, 5:10 a.m. Inappropriate

Let's play another game. Imagine you live in a country that produces everything to sustain itself, then you decide you want more for cheaper so you buy lower quality goods without knowing the goods are loaded with toxins. How long does the game go on before your country gives everything away?

Granted, jobs would be created if U.S. ports were utilized, but jobs would be lost from people transporting the goods from Mexico or Canada into the U.S., which leads me to think this so called maritime tax is what's wrong and the author doesn't see it that way. Taxing us more doesn't create jobs,,,, ring ring

Thinking outside the box got us in this economic mess to begin with, and the people with power and monopoly money are the puppeteers and the strings are getting tangled.

salmonjim

Posted Fri, Jul 6, 8:14 a.m. Inappropriate

Chris Hansen and his mysterious group of investors beyond Ballmer and the Nordstroms are also in "the game," hoping to gentrify Sodo and further make the city's major port and industrial area less competitive by snarling traffic with their game palace, the proposed new arena. It's the wrong place, and certainly inappropriate to spend public funds to aid and abet their gambit.

Posted Fri, Jul 6, 9:04 a.m. Inappropriate

This isn't journalism. This is not particularly well written, unless it is for a trade journal or chamber publication which it appears to be. The lead is buried and the rhetorical devices stale. It is written by an industry cheerleader who is likely paid by industry? It doesn't matter if it is accurate, and there is no way to ascertain if it is. By it's very nature, it is suspect, even if "true." I'm guessing it was free. Don Brunell next? Most of all, this is so unfortunate for Crosscut and journalism in general.

Again, this is not journalism but packaged to appear so.

tom_hyde

Posted Tue, Jul 10, 12:38 p.m. Inappropriate

It doesn't matter if it's accurate? Really?

Posted Tue, Jul 10, 4:49 p.m. Inappropriate

Yes, taken out of context that sounds silly. But, even if it is accurate, how can I trust the source when the author works for a board that is composed of the Port of Seattle, and Tacoma, Wells Fargo, Starbucks and Microsoft?

So even if this "article" is brilliant in every way, it is still NOT journalism. It is not independent. It was written by someone paid by the big corporate industry that directly benefits from the policies being espoused. There is nothing wrong with that but you have to consider the source. And by its generic packaging and prominent display on the front shelf of Crosscut alongside the work of credible independent journalists, it degrades Crosscut itself, and the independent journalists and articles that appear here. Nowhere is this called opinion, or industry commentary, or Chamber lobbying. It blurs the line between an outlet for journalism and ... a house organ. My beef isn't with the author, industry or the trade organization. My problem is with Crosscut on this.

If this were a press release from the Chamber of Commerce, which essentially it is, does that make it a true news article? If, by its very nature, it is suspect, does it matter if it is "accurate." Who determines the veracity of the claims or arguments made in press releases? There was a time when skeptical professional journalists were paid a living wage to hold the claims of industry and government accountable. It would seem that time is coming to a close. And if we rely on the government, banks, ports, and the largest corporate entities in the world to spoon feed us their news, to tell us how to think, and we call it journalism and package it as such, we are in big fucking trouble.

tom_hyde

Posted Fri, Jul 6, 9:15 a.m. Inappropriate

"The proposed new basketball arena and the relocation of the grand alliance of shippers from Seattle to Tacoma have both brought renewed energy to the ongoing conversations about how Puget Sound ports can compete in the changing global economy. While there are many opinions on how to best do this — from increased coordination to more (and more strategic) investments..."


I note with interest the "relocation to Tacoma" and "need for increased coordination" in the same paragraph. Every time the Port of Tacoma cleans Seattle's proverbial clock with more efficient and economical port operations, a call goes out to "coordinate" the actions of the ports. What this always means, if you pay attention, is to put the Port of Seattle in charge of all shipping operations on Puget Sound. Merging the ports is fine, but only if it's the much better managed Port of Tacoma that calls the shots. To bring all shipping operations on the Sound down to the level of mediocrity of the Port of Seattle will certainly solve Seattle's problems, but not those of anyone else.

dbreneman

Posted Fri, Jul 6, 10:24 a.m. Inappropriate

Hyde:

So, in your view, business perspectives are not valid, but anyone writing from an "environmental", "social justice" or other politically correct point of view is just fine -- thanks for clearing that up.

Posted Fri, Jul 6, 11:59 a.m. Inappropriate

Great piece, Eric! One point your "industry" perspective missed was the thousands of high wage, often union, jobs that our three public ports directly or indirectly support.

According to PSRC's Draft Regional Economic Strategy Report, over 66,000 jobs in the Puget Sound Region are in the Transportation & Logistics and Maritime sectors which critical to supporting our Aerospace, Information Technology sectors (325,000+ jobs). Even our Tourism & Vistor sector (another 133,000 jobs) relies heavily on the trade of products (I (heart) Seattle t-shirts) and people (cruise ships, students). 525,000 jobs in all...that's not quite every man, woman and child in the City of Seattle.

Now couple that with the fact that about 25% of the State's GDP is tied to trade - that means local and state tax revenue to fund a whole lot of public sector jobs - you see why trade is important to ALL of us, not just the evil industrialists.

Posted Sat, Jul 7, 4:13 a.m. Inappropriate

Unlike Eric Shinfeld, Patrick James actually cites various numbers to bolster his argument. Kudos (tho' I have a hard time thinking the transportation & logistics and maritime trade "supports" the aerospace and IT sector. Yeah, there's some connection, but it's can't be considered part of the latter's supply-chain.)

But where I fault Mr. Shinfeld is his failing to cite ANY figure pertaining to the Harbor Maintenance Tax. How big is it (rate, total $ per box, etc.)?

I can only suspect that he failed to cite a figure because it's not as onerous as he wants us to believe. He'd rather we believe it's the boogie-man.

Plus, it's not so much the tax rate or its intended purpose, but where its receipts are being spent (e.g. Georgia) that has his dander up.

That's a tad bit parachiol -even sour grapes- for my tastes. One would have to believe the Port of Seattle is heroic and -if not for the HMT- could easily swat away the annoyance of a little competition from East Coast ports.

Posted Sat, Jul 7, 6:57 p.m. Inappropriate

In addition the Port of Seattle has a completely unrealistic approach to hiring people that could potentially aid them in retaining current business and expanding their contacts in the shipping world. Their require a minimum of a Masters Degree for jobs that start at $ 79,000. and do not take into consideration years worked as equivalent (as Boeing does). They actually ask for a Ph.D on some jobs! No wonder the customers sail away to Tacoma and other ports.

rational2

Posted Tue, Jul 10, 11:45 a.m. Inappropriate

Arthur King:

You wrote: "So, in your view, business perspectives are not valid, but anyone writing from an "environmental", "social justice" or other politically correct point of view is just fine -- thanks for clearing that up."

Arthur, my brother, of course I neither wrote nor implied anything of the kind. You can do better than create something completely fictitious and then knock it down. That's called a straw man. It's all the rage on interweb commentary, and talk radio, but intellectually dishonest.

My point was directed at Crosscut.

An "article" written by someone associated with the Seattle Chamber of Commerce and an associated organization with a board composed of members from Microsoft, Wells Fargo, Starbucks, the Port of Seattle, and the Port of Tacoma, among others, is not independent journalism. It's opinion or, as presented, propaganda. By it's very nature, this opinion piece is aimed at influencing the attitude of the population to a specific position or, under the mandate of the organization itself, influencing legislation and federal policy. In and of itself, there is nothing wrong with this.

My concern here is specifically with Crosscut.

By presenting this in a way that could easily be misinterpreted as journalism the lines are blurred between the independent press that is separate and necessary as a constitutional check and balance, and those very interests who hold both corporate and governmental power. True, there is disclosure of Mr. Schinfeld's relationship with the organization that sponsored the WTO in Seattle, and with the Chamber. But this is not labeled as opinion. It is presented as an article promoted on the front page, as it were, and in my daily email feed alongside independent stories written by journalists. Is this what Crosscut has become? Or is this what Crosscut has always been. It is, frankly, either lazy, or desperate, or both.

It concerns me greatly when the lines are blurred between independent journalism and corporate/government propaganda. I have the same concern with pieces written by environmental advocacy groups that blur this same line.

I value industry's perspective on these issues, as presented here, but this is only one perspective, unvetted and unapologetic in its bias. That's okay I suppose but it is most certainly not journalism and it is not what I expect to find when I come to Crosscut, an organization funded in part by this country's leading journalism foundation. My criticism is meant to be helpful to Crosscut as it attempts to find a way forward but this is not, I hope, one of those "transformational ideas that promote quality journalism" because, again, this is NOT journalism.

tom_hyde

Posted Tue, Jul 10, 4:22 p.m. Inappropriate

Thank you Tom_hyde, that is what's wrong with the media in general, they are puppets. My approach is always more sarcastic but your interpretation was brilliant in my opinion.

salmonjim

Posted Tue, Jul 10, 7:27 p.m. Inappropriate

Salmonjim,

And yet, it doesn't have to be this way. In some media venues it is certainly not. Still. I know this regurgitation of free industry lobbying PR is not the intent of Crosscut but it is struggling and pieces like this, presented as they are, are indicative of a larger problem that exists throughout this country. I applaud all those at Crosscut who have attempted to find a new model but, but ... this ain't it. I do wish them the best moving forward and hope they sincerely rethink their mission, as well as their business model, and begin to provide real enterprise boots on the ground journalism that is interesting and relevant. You have to give people a reason to care about Crosscut.

tom_hyde

Posted Wed, Jul 11, 5:04 a.m. Inappropriate

I have watched and read the propoganda about salmon, orcas and Puget Sound. Not once in 20 years has there been unbiased article about pollution and Puget Sound and job creation since the Puget Sound Business Journal did an article.

Talk about a job killer.

salmonjim

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