The newly concluded Trans-Pacific Partnership will remove sales barriers from nations that buy $63 billion worth of U.S. farm exports, said Agriculture Secretary Tom Vilsack. Almost as soon as accord was announced in Atlanta, completing five years of negotiations, U.S. farm groups focused on its benefits – or lack of them – for Americans. The National Pork Producers Council said it was confident the 12-nation trade agreement “will provide enormous new market opportunities for high-quality American pork exports.” A quarter of U.S. pork was exported last year. The National Farmers Union urged lawmakers “to vote against this flawed trade deal” that does not prevent currency manipulation nor eliminate U.S. trade deficits.
Many ag groups, such as the 6 million-member American Farm Bureau Federation and the National Milk Producers Federation, said they would look at the details of the agreement before taking a stand. “The agreement covers markets that are expected to grow rapidly for decades to come,” said AFBF. “We expect to see increased access for our agricultural products, particularly some meats.”
The final text of the agreement has yet to be published. House Ways and Means chairman Paul Ryan noted that under new rules, the administration must make the final version available to the public for 60 days before sending it to Capitol Hill for a yes-or-no vote. Congress would have weeks to review the text before calling a vote. “But only a good agreement … will be able to pass the House,” said Ryan.
Dairy was one of the final issues to be resolved by trade ministers. “A demand by New Zealand for greater access for its dairy exports was only settled at 5 a.m. EDT (0900 GMT) on Monday,” said Reuters. Canada’s supply management system for dairy, which keeps domestic prices high and limits imports, was a salient target for negotiators but U.S. dairy protections also became an issue in the final days. U.S. farm groups wanted Japan to open its market to more pork, beef and rice.
Vilsack said 42 percent of U.S. farm exports are sold to the 11 other nations in TPP, which stretches from Australia and New Zealand through Singapore, Malaysia, Vietnam and Brunei in Southeast Asia to Japan and on to Canada, Mexico, the United States, Peru and Chile in the Americas.
“Thanks to this agreement and its removal of unfair trade barriers, American agricultural exports to the region will expand even further, particularly exports of meat, poultry, dairy, fruits, vegetables, grains, oilseeds, cotton and processed products,” said Vilsack. “Increased demand for American agricultural products and expanded agricultural exports as a result of this agreement will support stronger commodity prices and increase farm income.” If Congress does not ratify TPP, he said, the United States would see trading partners turn to other nations willing to offer preferential deals.
TPP would be the largest trade-liberalizing pact in a generation, said the Guardian, and a major victory for President Obama. “It is expected to set common standards for 40 percent of the world’s economy, become a new flashpoint for the 2016 presidential campaign, and could become a legacy-defining agreement for the Obama administration. The deal is seen as a challenge to China’s growing dominance in the Pacific region.”
A White House fact sheet said, “Key tax cuts in the agreement will help American farmers and ranchers by expanding their exports, which provide roughly 20 percent of all farm income in the United States. For example, TPP will eliminate import taxes as high as 40 percent on U.S. poultry products, 35 percent on soybeans, and 40 percent on fruit exports. Additionally, TPP will help American farmers and ranchers compete by tackling a range of barriers they face abroad, including ensuring that foreign regulations and agricultural inspections are based on science, eliminating agricultural export subsidies, and minimizing unpredictable export bans.”
The NFU said it gleaned details about four key agricultural products. On dairy, “Canada has protected its supply management system for dairy and poultry products, but will allow for limited access to the market (3.25 percent of the Canadian dairy market and 2 percent of the poultry market). As a result, Canada will also make available $3.28 billion to dairy and poultry farmers for losses they may suffer as a result of TPP. New Zealand dairy exporters will have preferential access to new quotas in the U.S., Japan, Canada, and Mexico. Japan will gradually lower tariffs on aged cheeses over a 16 year period and will establish import quotas for processed cheese from the U.S., Australia, and New Zealand.”
NFU said tariffs on beef exports to TPP countries would be eliminated, except for Japan, whose tariffs will be reduced to 9 percent from the current 38.5 percent to 9 over 16 years. In exchange, the United States will eliminate tariffs on high-priced Japanese waygu beef.
On rice, said NFU, Japan agreed to allow more imports and would set import quotas at 50,000 tonnes for the U.S. rice and 6,000 tonnes for Australia. It cited a Politico report that Japan would also allow more medium-grain rice to enter duty-free, which could boost U.S. exports. The quotas will expand after 12 years. Mexico eliminated its rice tariffs.
The United States agreed to allow Australia to ship an additional 65,000 tonnes of sugar and to remove $3 million in sugar tariffs, said NFU.