In transitioning from campaign rhetoric to presidential action, president-elect Donald Trump has taken a hard-lined stance on trade and specifically the Trans-Pacific Partnership (TPP). Any hopes of that coming back to life were put to rest earlier this week when Trump made a YouTube address known that within his first 100 days of office he would withdraw from the TPP.
Agricultural groups were correct in their push to have TPP passed in the lame duck. But not only will they fall short, but they may never be able to see TPP cross the finish line. Even though the immediate outlook looks bleak, agricultural groups have their work cut out for them in explaining to the new administration the crucial role trade plays in U.S. farmers’ success and profitability.
Trump continues to say he wants to create jobs for those in the United States. However, if agriculture loses its competitiveness in world trade, more jobs are going to go away. In reaching out to several commodity groups, many did not have a statement on the latest Trump’s statement on TPP, further proving it came as a sucker punch to many in ag. Many did say they’ll continue to educate the new Administration on the importance of trade to agriculture.
Colin Woodall, vice president of government affairs at the National Cattlemen’s Beef Assn., shared that every day TPP is not in effect, U.S. cattle producers lose $400,000. Australia is able to access the Japanese market at a substantially lower tariff rate, which TPP would help level the playing field on.
Trump has stressed the desire for bilateral agreements. However, Woodall said bilateral agreements would be several years away, and what is to say those who are currently involved in TPP negotiations wouldn’t walk away from future bilateral agreements because of all the time and resources that were unable to be capitalized on with the failure of TPP.
Brett Stuart, chief executive officer of Global AgriTrends, said the announcement is disappointing for the pork industry. “I’m sure there are groups that will be regrouping and re-strategizing, but honestly I don’t see it being a major negative shift to the U.S. pork market share in Japan.”
Japan’s market is very lucrative, Stuart said. “Things are good in the market. We would have loved that TPP agreement which would have been able to put us a little more competitive vis-à-vis the domestic production. It would have taken away some of their protection around their domestic industry. But, moving forward, we are going to continue to ship a lot of pork to Japan and it’s going to continue to be a key profit driver for the U.S industry.”
But ag must continue to drive the message that their jobs are dependent on trade. Miranda McDaniel, spokeswoman for the American Feed Industry Assn., said AFIA will be reminding the incoming administration that this trade deal will help secure American jobs, a priority of Mr. Trump.
“One in five jobs in the U.S. today are trade related, and nearly 17 million jobs are related to agriculture. TPP has the potential to increase exports, therefore increasing export-related jobs, which will help boost our rural economies," McDaniel said.
Stuart added when listening to the rhetoric of the President-elect, he’s been very aggressive about trying to build jobs at home. He’s attacked trade because he wants to bring jobs back to the U.S. “Trade is a two-way street. Most of his rhetoric has been about jobs and keeping jobs in the U.S.”
“The U.S. has an incredibly robust globally competitive [agriculture] manufacturing base; it employs millions. It has a trade surplus. No trade deficit; we have a huge trade surplus in agriculture production. And so if you think about the rhetoric of the President-elect, it’s hard to believe that he would be trying to shift trade deals or change trade in a way that’s going to negatively affect a huge U.S. manufacturing base of agriculture. I guess time will tell, but looking at it, I would think the focus on his trade actions are going to be about bringing jobs back. It’s hard for me to imagine a scenario where these trade deals are put in place in a way that really negatively affects the U.S. agriculture manufacturing base. Again, it’s all speculation at this point.”
Woodall said if Trump tinkers with the North American Free Trade Agreement it could definitely jeopardize access with two of the top five agricultural export markets. “We don’t need any additional downward pressure on cattle prices. We have concerns about continued talk to reopen or redo NAFTA. It does not bode well for the U.S. cattle industry,” Woodall said.
Chris Galen, spokesman for the National Milk Producers Federation, said, “While momentum behind specific trade deals such as TPP and TTIP has faded for the time being, the need for farmers to reach overseas markets has not.”
NMPF will continue to tout the benefits to the U.S. dairy sector of access to foreign markets, as the future growth of American agriculture depends heavily on being able to reach overseas markets. “NMPF will highlight how dairy exports are important both to farmers themselves, as well as to thousands of other workers in rural America whose jobs depend on a healthy and growing infrastructure for milk production, processing and marketing,” he said.