Inside Washington: Do TPP promises fall short?

Those in favor of TPP say time is now for Congress to act, while those opposed say estimated increase in exports is not enough.

Jacqui Fatka, Policy editor

May 19, 2016

3 Min Read
Inside Washington: Do TPP promises fall short?

On Wednesday, the U.S. International Trade Commission (ITC) released its report detailing the economic impact of the Trans-Pacific Partnership (TPP). The question now remains whether it provides enough incentive to move Congress to approve the measure or if pundits will use the numbers to dissuade its final passage.

The spin machine is already in motion as the National Farmers Union (NFU) and R-CALF USA, both of which have been opposed to the TPP trade deal, said the estimated 0.5% gain for U.S. exports isn’t enough.

In a statement, NFU explained that TPP has been promoted by the Administration as a boon for agriculture that will break down trade barriers, but NFU president Roger Johnson pointed out that, with TPP, agriculture does not stand to gain much, even with the rosiest of estimates. “Even agriculture, which is often touted as the most beneficially impacted sector of the economy, is only estimated to see a half-percent gain over 15 years,” he said.

Johnson added, “The commission’s assessment of a gain of just 0.15% in U.S. GDP (gross domestic product) in the next 16 years, while increasing our massive trade deficit, should raise serious alarms about the proposed benefits of this trade agreement.” He said ITC predicts that TPP will increase the trade deficit by $21.7 billion.

An analysis by the American Farm Bureau Federation has indicated that farmers and ranchers stand to gain $4.4 billion per year in added farm income, with U.S. agricultural exports growing by $5.3 billion a year upon implementation of TPP. The ITC report suggests that things could be even better, showing farm income up $10 billion per year, driven by net agricultural exports growing $4.5 billion a year by 2032.

A statement from Secretary of Agriculture Tom Vilsack said the ITC findings echo other reports, such as the Farm Bureau analysis and one from The Peterson Institute. “If we don’t act, not only will we lose these opportunities, (but) we will be ceding our leadership in the region to China, allowing them to define the rules that the Pacific Rim plays by. We can’t afford to delay passage; there is simply too much at stake,” he said.

Every statement from mainstream commodity groups was quick to point out the need to act now and urged Congress to move ahead on ratifying the agreement.

“Every day we wait to approve TPP, we fall further behind our global competitors,” said Zippy Duvall, president of the American Farm Bureau Federation.

North American Meat Assn. president and chief executive officer Barry Carpenter added that the ITC report "reveals that the U.S. cannot sit idly by while other TPP countries negotiate bilateral and regional free trade agreements that would place American exports, including meat and poultry exports, at a competitive disadvantage. Failure to ratify TPP will result in lost market share for U.S. meat exports and undermines the long-term position of the U.S. meat and poultry industry, which relies on identifying new markets and consumers.”

The National Pork Producers Council (NPPC) expressed concern about a U.S. delay in approving – or even rejecting – the trade agreement, pointing out that other countries are negotiating free trade deals in the Asia-Pacific region, including the 16-nation Regional Comprehensive Economic Partnership led by China.

“The U.S. needs to act more quickly to get the TPP approved and implemented,” NPPC president John Weber said. “If we delay, we fall behind, and we certainly cannot afford either economically or geopolitically to walk away from the fastest-growing region in the world.”

“We understand that the political environment is difficult in an election year, but that’s the job lawmakers signed on to do. TPP deserves a debate and a vote so these benefits can be realized,” said Richard Wilkins, president of the American Soybean Assn.

Read more on agricultural groups' views on the trade deal in our accompanying story by clicking here.

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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