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Tarifa is a picturesque port town hugging the southern coast in Andalusia, Spain. Centuries ago, the merchants in Tarifa were credited for being the first to charge or tax imports that came through their docks. And that is where many believe we get the highly divisive tax known as the tariff.

In the most general sense, the tariff taxes imports. The theory is to help domestic products compete against cheaper products that would normally flood the local market. Looking at it from the domestic point of view, this would seem to help foster local products within the local market.

On the other hand, if you wanted to export your goods to compete elsewhere, you’d probably face a tariff in the export market. In other words, unless you’re willing to pay, you have to keep your product stateside.

Let’s take a product that’s near and dear to Hawaii: sugar. When the United States lost its sugar supply from the Deep South during the Civil War, it started searching for newer markets to import the stuff. Hawaii was ready to fill that gap.

The sugar boom made a small group of elite businessmen in the islands very wealthy and influential in the kingdom’s government. Eventually, this led to the now-famous Reciprocity Treaty between the Hawaiian Kingdom and the United States of 1875.

The treaty made certain items made in Hawaii duty-free when shipped to the Mainland such as bananas, hides and skins, and, most importantly, “Sandwich Island Sugar;” that is, unrefined sugar. On the other hand, imports from the United States were tax-free, such as meats, metals, cotton, books, furs and lumber. The treaty was hardly fair. (The United States also managed to secure Pearl Harbor as a naval base in the islands through the treaty.) American imports to Hawaii more than doubled the exports from Hawaii. That left Hawaii with very little tariffs with the United States.

In 1890, Congress passed a tariff that effectively wiped clean the free-trade zone. Sugar companies were in consternation. The tariff – or rather – the fear of trade restriction became the inspiration for many of the architects behind the overthrow of the Hawaiian Kingdom. Once Hawaii became part of the United States, so the logic went, it would be a permanent free-trade zone for sugar. In fact, it would be protected by the tariffs from other places like Cuba and South America. Sure enough, the Hawaii sugar companies joined the rest of the strong sugar lobby in Congress after annexation.

Free trade and tariffs are still hot topics these days. Twelve Pacific Rim countries have been getting together for the last few years to come up with a massive trade agreement called the Trans Pacific Partnership, the TPP.

Some of these countries, like the United States and Japan, are wealthy. Others are considered developing countries like Vietnam and Peru. This week, it was announced that a deal had been reached. Now all the United States has to do is join in the partnership. President Barack Obama is a fan. He’s already trying to work on a coalition in Congress to pass the TPP.

But the critical elements are in the details. First of all, the entire negotiation process has been shrouded in secrecy, which has alarmed public interest groups. Secondly, it boasts to eliminate more than 18,000 taxes and trade barriers among the participating countries.

That means that the trade restrictions would be gone on certain products among the countries. One striking example is cars. Right now, there’s a tariff on Japanese-made vehicles in the United States. The Japanese negotiated aggressively to lower the tariff and allow more Japanese vehicles sold in the United States. They won out. The TPP allows freer trade of automobiles. Now the competition in the United States against foreign cars could become even more ferocious.

President Obama doesn’t see it that way. He’s hopeful that this will be part of his legacy: liberalizing the economies of major countries in the Pacific Rim. But many aren’t buying it -especially his fellow lawmakers from Hawaii.

Progressives are concerned that the TPP will only create unfair competition and will force the working classes in the United States to lower their pay and standards to developing countries that can now flood the consumer market. Local industries will have a hard time in a market flooded with cheap imports.

The entire Congressional delegation from Hawaii has been critical of the secrecy surrounding the TPP and many have voiced concerns about its impact on local industry and working people. And now, even Hillary Clinton has come out against the agreement.

The details of the TPP will emerge slowly, but surely. The president will still want Congress to approve of the agreement quickly. We will have to wait and see if he gets what he wants. Oh, and by the way, the sugar tariff managed to avoid the TPP’s chopping block.

* Ben Lowenthal is a trial and appellate lawyer, who grew up on Maui. His email is 808stateofaloha@gmail.com. “The State of Aloha” alternates Fridays with Sarah Ruppenthal’s “Neighbors.”

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