WASHINGTON, D.C., U.S. — A bipartisan group of former U.S. Agriculture Secretaries, issued on Nov. 20 an open letter urging the U.S. Congress to pass the Trans Pacific Partnership (TPP). The former secretaries note that opening new markets for exports is critical for farmers and rural communities. Agricultural exports provide 20% of farm income and support more than 1 million jobs, many of them in rural communities. TPP is a new trade deal that will create new opportunities for American-grown and American-made products in the dynamic Asia-Pacific region, they said. By opening new markets in Japan, Vietnam, and other countries, U.S. producers have access to new customers and the ability to expand their sales. These sales will generate more farm production, and related activities, that will grow the U.S. economy, they said.
The agreement provides increased market access for U.S. grains and ethanol by either elimination or phase out of nearly all tariffs and binding existing tariffs that are zero. By doing so, it also eliminates the existing preferential tariff treatment on grain exports between existing TPP member countries – for instance, between Australia and Vietnam – because of previous bilateral and regional trade agreements. The TPP negotiations concluded in October and countries are in the process of ratifying the agreement. The ratification process is expected to take two to three years.
The letter from the former secretaries follows:
“As former Secretaries of Agriculture, we have been personally invested in the negotiation of every major U.S. trade agreement of the past 40 years. We know from experience how important such agreements are to the economic well-being of our farmers and ranchers. In every negotiation where agriculture has been on the agenda these negotiations have expanded our markets, boosted farm incomes, and in the process created new jobs, both on-farm and off-farm, in rural America.
The recently concluded Trans Pacific Partnership (TPP) negotiations are in that same mold. TPP, a high-standard, 12-country agreement, represents this nation's "rebalance toward Asia," which fits American agriculture perfectly. That's where populations are increasing, as is purchasing power, and that's what dramatically enhances the demand for our food. We will in the future benefit significantly from increased access to those markets.
We have long had aspirations to sell more of our products to Japan, and we'll now have that enhanced opportunity. But TPP also opens up new markets in the growing economies of Vietnam and Malaysia. And it even provides additional access to Canada's poultry, egg and dairy markets.
TPP is a 21st-century agreement that sets enforceable "rules of the road" for trade throughout the region, and with countries currently representing over 40 percent of the global economy. But it is also meant to be an open platform for other countries to potentially join, over time, if they are willing to meet the high standards set forth in the agreement, and if we and the other TPP members—and our own Congress—confirm they can meet that bar. That means potential future agricultural export opportunities could open up within the region.
In addition, we should recognize that it is far better to be "on the inside" of agreements like TPP, than "on the outside" looking in. Being an insider gives all TPP participants an inherent competitive advantage over those countries which were not involved.
TPP obviously has non-economic benefits too. It will solidify our working relationship with the participating Asian (and South American) countries, and that has both foreign policy and national security implications. And "beyond the border" provisions such as enforceable labor and environmental provisions in developing countries—beyond mere tariff reductions—also help level the playing field for U.S. businesses and American exports, including agricultural products.
No trade agreement ever negotiated—TPP included—is perfect. But we should never let perfection be the enemy of the good, and this is a very good trade agreement. In addition to its market access benefits, it will establish the rules of the game for international trade – and help drive up standards for the entire world – for years to come. That is especially invaluable to a country like the United States, which tries to follow the rules of the global marketplace, whereas others often do not. TPP represents solid, committed leadership by the U.S. in international trade, and in one of the most dynamic, fastest-growing regions of the world.
For American agriculture there is no downside to TPP, and there is substantial upside. Hence, we strongly support a vote of approval by the U.S. Congress.”