TPP trade
Trump also plans to renegotiate NAFTA.
 
WASHINGTON, D.C., U.S. — U.S. agriculture groups expressed significant concern about President Donald Trump’s decision on Jan. 23 to withdraw the U.S. from the Trans-Pacific Partnership (TPP). The TPP is a trade agreement negotiated over seven years by the Obama administration with the governments of 11 other Pacific nations which, with the U.S., account for about 40% of the global economy. TPP was wrapped up in February 2016, but it was never sent to the U.S. Congress for approval.

“TPP, and agreements like it, are key to setting the terms and rules for future trade relationships, creating higher standards and expectations than previous trade deals,” said Joel G. Newman, president and chief executive officer (CEO) of the American Feed Industry Association (AFIA). “While the U.S. economy generally deals with a trade deficit, agriculture is the one segment where our country enjoys a strong trade surplus.”

The American Soybean Association (ASA) said more than half of soy produced in the U.S. is exported and the TPP held great promise for those potential exports and is disappointed with the withdrawal decision.

The TPP represents 40% of the world’s gross domestic product (GDP), and according to the Peterson Institute, would have increased overall U.S. exports by $357 billion by 2030. Specifically for U.S. farmers, TPP would have increased annual net farm income by $4.4 billion, according to the American Farm Bureau Federation (AFBF). Additionally, TPP was the first regional trade agreement to address the need to coordinate international policy on trade in the products of agricultural biotechnology, a benefit that the ASA said it will push to see in any future agreements with TPP partner nations.

“Moving forward, we expect to see a plan in place as soon as possible to engage the TPP partner nations and capture the value that we lose with the withdrawal today,” said Ron Moore, president of the ASA. “With net farm income down by over 40% from levels just a few years ago, we need trade deals with the Asia-Pacific countries to make up for the $4.4 billion in annual net farm income being lost by farmers from not moving forward with the TPP. Trade is too important for us to support anything less.”

The U.S. Wheat Associates (USW) and National Association of Wheat Growers (NAWG) issued a joint statement in which they noted that “until an alternative trade policy is established, export opportunities in the promising Pacific Rim markets that could help U.S. wheat farmers at a time when they need it most is very much at risk.”

“Without TPP or alternative agreements, U.S. farmers will be forced to the sidelines of trade while losing market share in the region to our competitors, including Australia, Canada, Russia and the European Union, which have current agreements or are negotiating new ones with countries outside the network of existing U.S. trade agreements,” said Gordon Stoner, president of NAWG, and a wheat farmer from Outlook, Montana, U.S.

Other countries involved in the TPP negotiations also expressed concern about Trump’s decision.

Japanese Prime Minister Shinzo Abe said on Jan. 23 during a parliament session that he still held out hope that Trump would understand the value of free trade and would keep pitching a multilateral trade pact that Trump’s administration has vowed to exit.

“I believe President Trump understands the importance of fair trade, so I’d like to pursue his understanding on the strategic and economic importance of the TPP trade pact,” Abe said.

Japan is one of the world’s largest grain importers, ranking No. 1 in 2015-16 with 15 million tonnes of corn exports, according to the U.S. Department of Agriculture. It also ranked among the top five in the world in soybean, barley, sorghum and rapeseed imports.

Another major player in the TPP is Australia, which ranks among the world’s top wheat exporters, with most of its wheat shipped primarily to Asian countries. Australian Trade Minister Steve Ciobo on Jan. 22 conceded that if the U.S. withdrew the trade deal it would have to be revised. But he said the Australian government planned to push forward for a deal, with or without the U.S.

“Access to the U.S. market was no doubt an incentive for a lot of countries,” he told the Australia Broadcasting Corp. “But there is also a tremendous amount of benefit that has been able to be achieved under the agreement that countries don’t want to let go.”

During his
campaign for presidency, Trump openly spoke of his intention to scrap the U.S. involvement in the TPP to keep jobs in the U.S. Trump has adopted an America first foreign policy focused on American interests and America’s security, which includes withdrawing from the TPP and renegotiating the North American Free Trade Agreement (NAFTA). The president also has vowed to crack down on nations who violate trade agreements.

Pointing out that U.S. agricultural exports to Canada and Mexico have quadrupled from $8.9 billion in 1993 to over $38 billion today, due in large part to NAFTA, Zippy Duvall, president of the AFBF, said any renegotiation of NAFTA must recognize the gains achieved by American agriculture and ensure that U.S. ag trade with Canada and Mexico remains strong.

“AFBF will work with the administration to remove remaining barriers that hamstring the ability of America’s farmers and ranchers to benefit from trading relationships with our important North American trading partners,” Duvall said.