WITH agricultural prices on the slide, trade is more critical than ever and is an important part of the U.S. safety net, Ambassador Darci Vetter, chief agricultural negotiator for the Office of the U.S. Trade Representative, said.

As agricultural interests determine where they officially stand on support for the multilateral Trans-Pacific Partnership (TPP), she feels strongly that benefits for agricultural trade will help pull this deal across the finish line.

TPP was finalized in the fall but awaits ratification by Congress and the President. The U.S. agriculture industry already has deep roots in the TPP negotiating area, with 42% of U.S. agricultural products being shipped to the 11 other participating countries.

Vetter contends that this region will only continue to grow in importance; the key to gaining a competitive foothold is to reduce or eliminate tariffs.

Vetter said the overall "support from agriculture is quite strong," and she especially expects continued strong support from the meat industry.

Vetter acknowledged that each individual sector of the agriculture industry is doing its own thorough assessment of the value of TPP. "I have no doubt that when they complete that, it will be very positive," she said. "U.S. agriculture, as a whole, has a lot to gain from this agreement."

Over three days in January, a panel of agricultural groups outlined some possible economic benefits and impacts of TPP before the U.S. International Trade Commission (USITC). Legislation mandates that USITC deliver its assessment of the deal to the President and Congress no more than 105 days after the President signs the agreement. The earliest the President can sign the agreement is Feb. 4, which would make the USITC report due by May 18.

Sector support

Reports surfaced of dampened support for TPP from the National Pork Producers Council — initially one of the staunchest supporters of the trade deal — after lawmakers in Japan presented draft subsidies to cover up to 90% of losses accrued between production costs and the sales price. This represents a 10% increase from the current support plan.

Although the U.S. poultry industry has supported free trade, the industry's experience with the results of free trade agreement negotiations has been mixed, National Chicken Council president Mike Brown testified at the USITC hearing. During past negotiations, poultry has often been denominated a "sensitive product" and typically receives less-favorable access than other products.

Brown said the industry's analysis found that there would be significant additional tariff reductions in only three of the 11 TPP partner countries: Japan, Malaysia and Vietnam.

"Our assessment is that TPP will allow us to make some modest inroads in Japan and hopefully in Vietnam, but we do not believe the TPP, as currently negotiated, will provide our industry with any actual market access in Malaysia," Brown explained.

The poultry industry is hopeful that the sanitary and phytosanitary (SPS) provisions of TPP will provide the "initial thrust for placing more emphasis on SPS provisions in discussions with all of our trading partners."

Even though the dairy industry hasn't come out in favor of the deal, it has issued statements supporting the SPS measures as well as geographic indicator protections that prevent protection of overly broad names for cheese, Vetter noted.

"These achievements may be difficult to quantify through traditional economic modeling but are certainly relevant to the economic gains the United States may hope to achieve through TPP," U.S. Dairy Export Council Tom Suber said.

"The deal falls short in providing the degree of market access we had been seeking, but it also avoids a disproportionate opening of the U.S. market to dairy exporters," Suber added.

Kevin Kester, California rancher and policy division chair for the National Cattlemen's Beef Assn., testified, "TPP is not perfect, but it is a vast improvement over the status quo. We cannot afford to wait on TPP, or we will continue to lose market share to our competitors."

Kester also said without TPP, the U.S. relinquishes leverage to lead the future of trade with the Pacific Rim. "Without TPP, we will have no leverage to address market access problems we have with Taiwan, Indonesia, the Philippines and Korea — countries who want to join TPP," he added.

In addition, Vetter said having every product on the table in TPP without exception "creates a powerful example for other countries who want to join," which should allow industries like dairy and rice to take comfort in knowing that those standards are in place for future TPP member countries.

When asked what is at stake if the U.S. waits to approve the TPP measure until after the November elections or possibly not until 2017, Vetter said the U.S. will not get the preferential access the member countries agreed to until everyone crosses the finish line. In the years TPP was being negotiated, other countries formed their own preferential trade agreements with each other and the European Union, which puts the U.S. at a continued disadvantage, especially with Australia for beef exports to Japan and New Zealand dairy exports.

Volume:88 Issue:01