Agriculture seems to be the one industry where different sectors are coalescing around support for the Trans-Pacific Partnership.
Even as other business lobbies are taking a more wait-and-see attitude, leaders from several major agricultural groups gathered Wednesday in Kansas City to talk up the benefits and importance of the 12-nation trade deal for farmers and rural America.
Wrapping up the opening day of the National Association of Farm Broadcasters annual meeting, leaders of the American Soybean Association, National Pork Producers Council, National Association of Wheat Growers, National Cattlemen’s Beef Association, National Corn Growers Association and the U.S. Grains Council all shared their perspective on why the Pacific trade deal is critical to their individual producers or commodities.
The push from several mainline agricultural lobbies has to be seen as a positive by the White House, which is making its own aggressive push to rally support for the trade deal. The White House is rolling out analysis Thursday spotlighting the economic benefits of TPP in all 50 states.
The Trans-Pacific Partnership includes the U.S., Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The trade deal encompasses roughly 800 million people and more than 40% of the global gross domestic product. That makes the trade deal the largest ever and also the most complex in terms of trade rules.
For agriculture, the talk on TPP comes down to a broad array of numbers. For instance, 50% of U.S. agricultural exports to Japan, by volume, would immediately become duty free once the trade deal goes into force.
Phil Karsting, administrator of the USDA Foreign Agricultural Service, joined the ag lobbies in their presser Wednesday. Karsting said he’s been spending a lot of time at microphones recently talking up TPP. He then noted 20% of all U.S. farm income comes from exports. TPP countries already account for about 40% of all U.S. agricultural exports.
“The central question for American agriculture right now is whether we would be better with or without TPP,” Karsting said. “In my perspective, the resounding answer is we would be better off with TPP.”
Karsting added, “We need to remind everybody, all across the country — every small town and every other rural community — that everybody has skin in this game. Every other row of soybeans goes overseas these days. One day a week of milk production is exported. Those are meaningful opportunities for our producers.”
The trade deal faces a 90-day delay between the time the text became public and the time President Barack Obama can sign the deal and send it to Congress for ratification. That puts the timetable for Congress to consider the trade agreement sometime into late winter or early spring. That effectively means TPP will be a central topic to rally farmer support at major winter agricultural meetings between now and Commodity Classic, which is held in early March.
Still, some key lawmakers upset over particular provisions are already calling for renegotiations. Senate Finance Committee Chairman Orrin Hatch, R-Utah, has indicated the deal may need to be redone because U.S. pharmaceutical companies aren’t happy over restrictions on drug patents. Karsting, however, said it’s unlikely single provisions can be renegotiated after being crafted to create a delicate balance. “It’s not a simple matter of just reopening the text and saying we are going to renegotiate this piece.”
Wade Cowan, a Texas farmer and president of the American Soybean Association, said he was proud to declare the trade deal would be good for soybeans, but the trade deal also is good for soybean customers such as pork and cattle producers, Cowan said.
“Soybean producers, we knew we were going to be very well protected in TPP,” Cowan said. “The deal that we have now, we are going to have no tariffs in all of these nations in the next 10 years. So that’s a very good outcome.”
Cowan also stressed the trade rules known as sanitary and phytosanitary measures are going to be based on science. “We’re not going to be subject to the whims and the whimsies of people in other countries that look at every other reason not to accept our products,” Cowan said. “That’s a good deal.”
John Weber, a hog farmer from Dysart, Iowa, and president-elect of the National Pork Producers Council, said his group’s members unequivocally support TPP. He said the trade deal represents the biggest export opportunity ever for pork producers. Weber then dove briefly into presidential politics by drawing on comments from Wednesday’s Republican debate.
“Contrary to what you may have heard from Donald Trump in last night’s debate, the TPP will benefit American consumers, workers, businesses, farmers and ranchers, and we’re confident it will provide enormous new market opportunities for high-quality U.S. pork products,” Weber said.
In that statement, Weber touched on one of the challenges of getting TPP through Congress in a presidential election year. Most presidential candidates from both parties have come out against TPP or at least declared skepticism about the deal.
Weber said opponents of the deal should realize that other countries are negotiating trade deals that would exclude the U.S. Given that exports add $62 in value to every market hog, Weber said pork producers “are extremely concerned about losing market share.”
Chip Bowling, a Maryland farmer and president of the National Corn Growers Association, reiterated that corn growers would benefit from lower tariffs and the removal of other barriers. He said corn producers also benefit when major proteins such as pork and beef gain in exports.
“When the Japanese are eating more Nebraska beef, that means more increased demand for corn,” Bowling said. He later added, “Let’s be clear, without this agreement, our farmers will be facing a growing competitive disadvantage in the region.”
Bob McCan, a cow-calf operator from Texas and immediate past president of the National Cattlemen’s Beef Association, said cattle markets have seen significant turbulence in recent months, partially related to challenges in overseas markets. Beef saw more than $7 billion in exports in 2014, but U.S. beef is losing market share to other countries in some key markets. A new trade deal between Australia and Japan has cut U.S. beef exports 11% to Japan this year.
“Rather than seeking one-off trade agreements, America’s cattle producers remain committed to the Trans-Pacific Partnership, knowing that a united front from agriculture would produce greater opportunities for our products,” McCan said.
Beef producers would see tariffs in Japan decline over 15 years from the current 38.5% to 9%. “It will be the best access ever negotiated to Japan,” McCan said.
Alan Tiemann, a Nebraska farmer and chairman of the U.S. Grains Council, said the trade deal will increase grain sales to countries in some of the fastest-growing economies in the world. Most coarse grains will be duty free forever, while other tariffs will be phased down. The trade deal also will address a host of issues such as biotechnology approval.
While half of all U.S. wheat is already exported, Brett Blankenship, president of the National Association of Wheat Growers, said TPP reflects a trade deal that helps play both offense and defense to expand markets and protect traditional sales overseas. Like others who spoke, Blankenship said farmers are worried that other countries could strike trade deals while TPP is slowly moving through the political system.
“Let’s make sure we lock up 40% of the world’s economy with this move,” Blankenship said.