SALEM, Ohio — Trade deals are never perfect, but a large group of U.S. farm commodity organizations and an official from the U.S. Department of Agriculture all say the recently announced Trans-Pacific Trade Agreement is good for farmers.
The agreement was announced in October, and the final text became available Nov. 5. It includes new trade agreements with 11 Asian-Pacific nations, that represent 40 percent of the world’s economy. To become law, it will need congressional and presidential approval.
With or without
The central question, according to Phil Karsting, administrator of the USDA’s Foreign Agricultural Service, is “whether or not we’re better with, or better without TPP.”
From his perspective, the answer is “better off — with.”
About 20 percent of farm income comes from exports, Karsting said. The TPP would give farmers greater market access in the fastest growing part of the world, and would also reduce and eliminate tariffs that are limiting the trade of U.S. beef, grain, dairy and other farm products.
Farm commodity organizations weighed in on the agreement following the full release, and during a media event Nov. 11 at a gathering of the National Association of Farm Broadcasting, held in Kansas City.
John Weber, president-elect of the National Pork Producers Council, called the agreement the “biggest commercial opportunity ever for U.S. pork producers,” adding that it is “overwhelmingly beneficial to the United States.”
According to Weber, exports added more than $62 of value to every hog sold in 2014 — prior to the TPP.
Chip Bowling, president of the National Corn Growers Association — said grain producers’ success is “intertwined” with the success of livestock producers, and he believes the trade deal will benefit both.
The deal includes a substantial reduction in beef tariffs, especially in countries like Japan, which the U.S. has long tried to increase trade.
According to the National Cattlemen’s Beef Association, the Japanese tariff on U.S. beef would immediately decrease from 38.5 percent, to 27.5 percent, and tariffs would continue to decrease or be eliminated, over the next 15 years.
The NCBA says the deal represents “the greatest market access that has ever been negotiated to Japan.”
But while the agreement is billed as a big win for many — it does have its opponents — and some important players who are still undecided.
The National Farmers Union is opposed to the deal, citing concerns that it will lead to more currency manipulation, and actually reduce revenue to American farmers. The NFU, and some other organizations, have also voiced their concern that the deal will lead to U.S. job loss and loss of manufacturing, which will continue to be shipped overseas.
The National Milk Producers Federation and the U.S. Dairy Export Council said in a statement, that they are still reviewing the final text, and how the dairy sector would be impacted. They said there are thousands of provisions within the text — that must be carefully vetted.
“All must be thoroughly reviewed before we can make a more informed determination of the final impact of the agreement on the U.S. dairy industry, and are able to determine whether or not we recommend that members of Congress support the agreement,” according to NFU and USDEC.
Ian Sheldon, an internationally recognized economist at Ohio State University, said the deal looks promising for agriculture, and could boost U.S. dairy trade.
“American dairy farmers may benefit from a loosened dairy sector in Canada,” Sheldon said, in a released statement.
Not acting on the TPP will have consequences, as well, and some commodity groups fear other nations would form agreements without the U.S.
Bowling said if Congress votes down the TPP, it would put the U.S. at a “competitive disadvantage” in that part of the world.
Wade Cowan, president of the American Soybean Association, said America’s farmers are not afraid to compete in the world market.
“We all think that we’re the best (and) most efficient, and now we’re willing to put our money where our mouth is,” he said.
By the numbers
The U.S. Department of Agriculture’s Economic Research Service estimates that TPP will result in a 6.6 percent increase in agricultural trade by 2025. This increase will account for an additional $8.5 billion in the agricultural marketplace, assuming the complete elimination of existing agricultural tariffs by 2025, Sheldon said.
Additionally, the ERS anticipates that the agreement will result in a 33 percent overall increase in U.S. exports and a 10 percent increase in imports by 2025.
The agreement is anticipated to reduce more than 18,000 tariffs, including some agricultural trade barriers.
In addition to the U.S., the partnership includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States.
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