Ag secretaries tout TPP benefits

Former secretaries note that opening new markets for exports is critical for farmers and rural communities.

Ag secretaries tout TPP benefits
A bipartisan group of former U.S. agriculture secretaries issued an open letter urging Congress to pass the Trans-Pacific Partnership (TPP). The former secretaries note that opening new markets for exports is critical for farmers and rural communities.

Jointly, those who signed on have been personally invested in the negotiations of every major U.S. trade agreement over the past 40 years. “We know from experience how important such agreements are to the economic well-being of our farmers and ranchers. In every negotiation where agriculture has been on the agenda these negotiations have expanded our markets, boosted farm incomes, and in the process created new jobs, both on-farm and off-farm, in rural America,” the seven previous secretaries wrote.

By opening new markets in Japan, Vietnam, and other countries, they said the U.S. is giving its producers access to new customers and expanding their sales. These sales will generate more farm production, and related activities, that will grow the U.S. economy.

Countries in the Trans-Pacific Partnership currently account for up to 42% of all U.S. agricultural exports, totaling $63 billion. Agricultural exports provide 20% of farm income and support more than 1 million jobs, many of them in rural communities. TPP is a new trade deal that will create new opportunities for American-grown and American–made products in the dynamic Asia-Pacific region.

By opening new markets in Japan, Vietnam, and other countries, the former secretaries said the U.S. is giving its producers access to new customers and expanding their sales. These sales will generate more farm production, and related activities, that will grow the U.S. economy.

Japan is already an important market for U.S. agricultural products. In 2014, Japan ranked as our fifth largest market (behind China, Canada, Mexico and the European Union) accounting for over $13 billion in U.S. agricultural exports. With a population of 127 million, high per capita income, an affinity for U.S. products, and a well-developed marketing infrastructure, Japan is an attractive market for U.S. exporters. The total food and drink market in Japan is valued at over $650 billion.

The former ag secretaries said thanks to this agreement and its removal of trade barriers, American agricultural exports to the region are poised to expand even further. “We have long had aspirations to sell more of our products to Japan, and we'll now have that enhanced opportunity. But TPP also opens up new markets in the growing economies of Vietnam and Malaysia. And it even provides additional access to Canada's poultry, egg and dairy markets,” they wrote.

Reducing tariffs in Japan has been a long-held U.S. trade policy objective, and the U.S. has not made progress toward this objective since the World Trade Organization (WTO) agreement in 1995. Japan's average tariff on agricultural products is 14%. (For comparison, the average U.S. agriculture tariff is 5%.) Japan's average hides significant tariff peaks: for many products Japanese tariffs exceed 100% and significantly restrict trade.

The former ag secretaries added in their letter that TPP will establish the rules of the game for international trade and help drive up standards for the entire work – for years to come. “That is especially invaluable to a country like the United States, which tries to follow the rules of the global marketplace, whereas others often do not,” they wrote.

The letter to Congress noted that “No trade agreement ever negotiated—TPP included—is perfect. But we should never let perfection be the enemy of the good, and this is a very good trade agreement. For American agriculture there is no downside to TPP, and there is substantial upside. Hence, we strongly support a vote of approval by the U.S. Congress.”

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