One of President Trump’s first actions in office was fulfilling a campaign promise to pull the United States out of the 12-nation Trans-Pacific Partnership and launch an era of one-on-one deals with trading partners. With a trade war compounding the woes of overproduction and low farm income, three Republican senators said on Thursday that re-entering the TPP could speed up the process of finding alternative markets for farm exports now that China has closed its door to them.
The senators raised the idea separately during a Senate Agriculture Committee hearing amid bipartisan criticism of the damage caused by tit-for-tat tariffs. While none of the senators mentioned Trump during the hearing, Minnesota Democrat Tina Smith came closest, when she noted that senators of both parties were seeing anxiety and financial distress in farm country. “I just wish the person who sits in the Oval Office understood it as well,” she said.
Two administration trade officials described their worldwide scramble to find new outlets for farm exports through trade missions to Asia and Latin America and during closed-door discussions with Japan, South Korea, the European Union, India, and our NAFTA partners. “I think we are rounding a corner, and I am very optimistic about the future,” said Ted McKinney, agriculture undersecretary for trade. The chief U.S. agricultural negotiator, Gregg Doud, said an intense effort was underway to wrap up the new NAFTA and that once that is done, “Japan is at the top of my mind” for a bilateral pact. “We understand Japan would like us to be a member of the TPP.”
Sen. John Thune of South Dakota, No. 3 in GOP Senate leadership, pointed to administration promises to negotiate bilateral pacts and concluded, “I don’t see the evidence they are.” Thune and fellow Republican Steve Daines of Montana suggested reengagement with the 11-nation version of the TPP that formed after the U.S. withdrawal. “We’re running out of time in farm and ranch country,” said Daines, who said the trade war was “an existential threat to some operators.” He suggested a mix of bilateral and multilateral trade agreements as the path forward.
Senate Agriculture chairman Pat Roberts said “to get back into TPP would send a message to China” of U.S. resolve on trade and global security policy.
“We have friends who are going to lose their farms because of what’s going on,” said Democratic Sen. Joe Donnelly of Indiana in questioning McKinney, the former Indiana agriculture director.
“There will be some losses. It’s very difficult,” responded McKinney, who said Trump is determined to rewrite trade pacts and trade rules that are biased against the United States. “All I can say is, we’re trying to right-size things that should have been” resolved years ago.
“These are our neighbors. This is completely self-inflicted,” said Donnelly. Sen. Michael Bennet, Colorado Democrat, said it “seems insane” for the administration to provoke retaliatory tariffs from Canada, Mexico, and the EU when it holds China to blame for dumping steel and aluminum. Iowa Sen. Joni Ernst, a Republican, complimented McKinney and Doud on their negotiations with Japan and the EU. “But we need to get them done, folks,” said Ernst.
On NAFTA, Doud said the top agricultural issues were Canada’s Class 7 price system for ultra-filtered milk, greater access to the consumer market, a change in grain grading systems, and better treatment of U.S. wine in Canadian retail stores.
“China is a problem,” said McKinney. “It’s a longer-term play.” Meanwhile, the United States was looking at sales to other Asian countries, he said.
Senior U.S. officials reportedly have offered to hold another round of talks with China. On Thursday, Trump said on social media, “We are under no pressure to make a deal with China.” Farmers voted for Trump in landslide numbers in 2016, attracted by his platform of tax cuts, regulatory relief, and support for corn ethanol, and hoping they could modify his views on trade. Exports account for 20 cents or more of each $1 of farm income.
To watch a video of the hearing or to read the opening statements by McKinney and Doud, click here.