Final TPP deal struck

Agriculture remains optimistic deal in the end would benefit U.S. producers.

Ministers from the twelve countries in the Trans-Pacific Partnership (TPP) reached an agreement to conclude the massive trade deal late Sunday night, ending five years of negotiations and setting up final approvals in each country.  

To formalize the outcomes of the agreement, negotiators will continue technical work to prepare a complete text for public release, including the legal review, translation, and drafting and verification of the text. 

The U.S. Trade Representative’s office did say the agreement would eliminate or significantly reduce tariffs on U.S. products and deter non-science based sanitary and phytosanitary barriers that have put American agriculture at a disadvantage in TPP countries in the past.

Despite these past barriers, countries in the Trans-Pacific Partnership currently account for up to 42% of all U.S. agricultural exports, totaling $633 billion. Secretary of Agriculture Tom Vilsack said 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.

“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,” Vilsack added.

Key tax cuts in the agreement will help American farmers and ranchers by expanding their exports, which provide roughly 20% of all farm income in the United States. For example, TPP will eliminate import taxes as high as 40% on U.S. poultry products, 35% on soybeans, and 40% on fruit exports.

Although details of the final deal have not been released, agricultural groups are reserving judgment until the text can be viewed. The National Cattlemen’s Beef Assn. and National Pork Producers Council remained optimistic that a final deal would benefit their sectors.

Beef exports currently add over $350 to each head of cattle sold in the U.S. With the completion of this work, NCBA said it looks forward to increased demand and growth for beef exports across the Pacific Rim.

Iowa State University economist Dermot Hayes, who said a final TPP agreement could be “the most important commercial opportunity ever for U.S. pork producers,” estimated that a good outcome for pork in the trade pact could increase U.S. pork exports over time exponentially and help create more than 10,000 U.S. jobs tied to those exports. Last year, the U.S. pork industry shipped about $4.5 billion of products to the 11 TPP nations.

The National Chicken Council said its major goals in the deal were to get a strong commitment on enforcement, in particular in the area of sanitary and phytosanitary measures. Second, it hopes to see that the "long-protected Canadian market is finally opened to free trade for poultry." 

Dairy tariffs were a final stumbling block as Canada was being called on to allow for more dairy imports into their country. Both the National Milk Producers Federation and U.S. Dairy Export Council had been in Atlanta for the talks to provide input and guidance during the final round of discussions. NMPF and USDEC said they’ll be carefully reviewing the agreement’s dairy provisions in the coming days to ensure it has the right balance of increased opportunities to export U.S. dairy products if other countries such as New Zealand are able to have access to the U.S. market.

The American Feed Industry Assn. welcomed the completion. "Trade agreements, which eliminate trade barriers overseas, play a critical role in the future of the feed industry as it opens doors to new markets globally. This is particularly important as the future growth of the U.S. animal agriculture industry depends on international consumers, particularly, the growing population and middle class," said AFIA president and chief executive officer Joel Newman.

Pursuant to the Trade Promotion Authority (TPA) legislation passed by Congress earlier this year, the President may not sign the trade agreement until 90 days after he notifies Congress that he intends to sign it. Additionally, TPA requires the President to make the entire text of the agreement public at least 60 days before he signs it.  Although TPA provides for a clear timeline for how and when Congress will consider a trade agreement like TPP, such timelines do not begin until the President submits the trade agreement to the Congress. The timing of the submission is negotiated between leaders in Congress and the President.

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