How to jumpstart job growth in Los Angeles?

There has rightly been much attention on this crucial question from civic organizations, political leaders and writers in these pages. Among them, they’ve put forth some excellent ideas, all with noble intentions. But one prescription for job creation has so far gone missing from this discussion – even though it wouldn’t cost the city a thing.

The opportunity is the United States-European Union free-trade agreement. We expect it to create 75,000 jobs in California, many thousands of them in Los Angeles.

Officially known as the Transatlantic Trade and Investment Partnership, or TTIP, a U.S.-EU deal could add $250 billion to our respective economies. That’s a serious stimulus without any borrowing, which is why President Barack Obama made special mention of it in his State of the Union speech and why it is the No. 1 overseas action item of the EU.

The benefits that Los Angeles stands to win from TTIP should make it a top priority for its federal representatives and all those who speak up for the city’s businesses, large and small.

For starters, a deal would play directly to some of L.A.’s strengths. Beginning May 1, the EU will charge a tariff of 12.4 percent on U.S.-made women’s jeans, nearly all of which are manufactured in Los Angeles. That is a good reduction on the current 38 percent tariff, but reducing it to zero – which both sides have set as a goal under TTIP – will save local denim makers hundreds of thousands of dollars a year and enable their businesses to grow faster.

Most tariffs between the United States and EU are low. But eliminating them entirely will have a noticeable effect on companies’ bottom line. Even more important is TTIP’s potential to remove the regulatory barriers that keep goods and services from moving freely between the world’s two largest economies.

Here’s an example. As a Brit living in Los Angeles, I readily apply American-made sunscreen. I have every confidence that good U.S. safety standards make sure it will do me no harm. But many American sunscreen brands can’t be sold in Europe as they don’t pass the EU’s tests. Likewise, most European sunscreen isn’t available here since the Food and Drug Administration and its EU counterparts take different approaches to regulating the ingredients. I do not believe Americans or Europeans think each other’s sunscreens are dangerous. We are simply letting our different processes get in the way of customer choice and producers’ access to markets.

Accepting standards

We can’t expect to agree on a single standard for the thousands of products that meet the same fate as your everyday sunblock. But we can agree to recognize each other’s standards. I’d like to say if it’s good enough for you, it should be good enough for us. That would come as welcome news not just for sunscreen makers but also for Southern California’s pharmaceutical companies, whose exports to the EU could be expected to grow by 34 percent.

So how does all this translate to jobs?

The 75,000 new jobs forecast for California came from a study by the Atlantic Council, the Bertelsmann Foundation and the British Embassy using the formula above – mainly, zeroing out tariffs and cutting red tape by 25 percent.

A closer look at just three of L.A.’s congressional districts – on the Westside, downtown and in South Los Angeles – anticipates a net increase of 6,195 jobs as a direct result of TTIP. Simply put, when we eliminate the barriers to trade, L.A.’s nation-leading industries will be able to flourish.

Let’s be clear: TTIP is not a trade deal that risks American jobs being lost due to lower pay and labor standards elsewhere. The EU and U.S. economies are on equal footing – in fact, the EU’s labor rules are largely admired by American unions. Companies aren’t going to replace American workers with European ones. Boosting trade really will be win-win.

All this growth is good news for exporters as well as for the nation’s busiest port complex. Seeing the gains that could be made from TTIP, the ports of Los Angeles and Long Beach have been enthusiastic cheerleaders for the deal.

They are among the members of the California Coalition for Free Trade, led by the California Chamber of Commerce, and including the Los Angeles Area and Los Angeles Metro Hispanic chambers, as well as major local employers like Boeing, Paramount Farms and Toyota Motor Sales. The coalition has been vocal in urging for a deal to be concluded quickly.

It is now up to Congress members to grant the president negotiating authority and then to support TTIP in an up-or-down vote. Even with everything working in TTIP’s favor, the politics around that could be fraught. Progress might not be straightforward. But the benefits for the United States, and for Los Angeles, are not to be missed. It is the best job creation strategy in town.

Chris O’Connor is the British consul-general in Los Angeles.