WASHINGTON, D.C., U.S. — After reaching agreement with 11 countries on the Trans-Pacific Partnership (TPP) negotiations a month ago, the U.S. government on Nov. 5 released a nearly-final version of the pact, including 30 chapters, market access schedules and side letters.
This new information will help stakeholders fully understand the scope and impact of the new agreement and starts the formal process for its Congressional approval.
With the text now public, U.S. President Barack Obama also formally notified Congress of his plan to sign the TPP pact. According to the requirements of the trade promotion authority (TPA) legislation passed earlier this year, the administration is required to give Congress 90 days’ notice to review the agreement before it is signed. After presidential signature is in place and implementing legislation is introduced, Congress can take up to 90 legislative days to review and vote on the agreement.
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.
“We are pleased that the U.S. is on the path toward approval of the Trans-Pacific Partnership agreement,” said Chip Bowling, president of the National Corn Growers Association (NCGA) and a farmer from Newburg, Maryland, U.S. “This agreement will give America’s farmers and ranchers greater access to the Asia-Pacific region, bringing more American grains, meat, and dairy to the rest of the world. That’s why NCGA members will be going to Capitol Hill and asking Congress to vote in favor of the TPP agreement.”
The Asia-Pacific region represents 40% of the world’s economy and is one of the fastest-growing areas of the world.
“The Trans-Pacific Partnership will have significant benefits for exports of corn in all forms,” said Alan Tiemann, chairman of the U.S. Grains Council (USGC) and a farmer from Seward, Nebraska, U.S. “Over the coming decades, this will help our members expand their overseas sales and grow their businesses. We look forward to working with our grain industry partners to tell the story of trade successes in our industry and how TPP will take those wins to the next level.”
TPP is expected to provide many countries with an opportunity to restructure agriculture by boosting research, improving agricultural infrastructure, and developing production chains.
Nguyen DinhBich of the Ministry of Industry and Trade's Trade Researcher Institute said Vietnam accounts for 26.7 million tonnes of the 45.3 million tonnes of the grain produced annually by TPP members.
"It will present Vietnam the opportunity to assess the strength and weakness of its agricultural sector," said Vietnam’s Deputy Minister of Agriculture and Rural Development, Ha Cong Tuan.
In the first eight months of this year, China bought 35% of Vietnam's total farm exports and sold over 53% of the agricultural inputs it imported.
Currently, Vietnam’s agriculture is mostly small-scale or household-based.
For instance, there are nearly 12 million farming households of whom 80% cultivate less than a hectare. Four million households rear pigs, but 77% have less than five; 7.9 million households raise chicken, 90% have less than 49.
On the regulatory side, TPP expands on the existing World Trade Organization’s sanitary and phytosanitary (SPS) agreement by ensuring that SPS measures are science-based and transparent. This should lead to improvements in the food safety and animal plant health regulatory systems of other TPP countries so they better align with U.S. systems. The agreement provides a new rapid response mechanism for seeking quick resolution of shipments detained for SPS reasons.
Importantly, TPP marks the first time that agricultural biotechnology is covered in a bilateral or regional U.S. trade agreement. In doing so, the agreement includes provisions on agricultural biotechnology that commit TPP countries to foster transparency in their decision-making processes; to work together on situations of low-level presence; and to promote timely authorization of biotech products. The TPP agreement also creates a working group to address matters related to trade in agricultural biotechnology products.
Separately, the TPP governments released a joint declaration on currency manipulation that contains a commitment by parties not devalue their currency for competitive purposes, as well as transparency requirements.
The USGC participated in the TPP negotiations on behalf of the U.S. feed grains industries and applauded their completion last month.