Trade is back!
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After more than three years of focusing on a new farm bill and a host of other domestic priorities, the topic of “international trade” is once again taking top billing. Negotiators continue to make progress on two major trade agreements - the Trans Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership. In addition, the U.S. is negotiating the Trade in Services Agreement (TISA) with 50 countries, covering about 50 percent of global GDP and over 70 percent of global services trade.
Trade Promotion Authority (TPA) legislation was introduced last week in a bipartisan fashion by Senate Finance Committee Chairman Max Baucus, D-Mont., Ranking member Orrin Hatch, R-Utah, and House Ways and Means Committee Chairman Dave Camp, R-Mich., which would give President Barack Obama the ability to “fast track” future trade deals through Congress. The one page summary can be found here. The bill text can be found here."
“Trade is back,” emphasized American Farm Bureau Federation (AFBF) President Bob Stallman during an interview with Agri-Pulse. “TPA is absolutely necessary to get the kind of agreement agriculture needs in these negotiations and we are going to working strongly to get that passed.”
Indeed, the opportunity to eliminate tariffs and break down trade barriers has the potential to substantially boost farm income and economies around the globe. Negotiations with the Asian Pacific nations and the European Union (EU) would open markets with nearly one billion consumers, covering nearly two-thirds of global gross domestic product and 65 percent of world trade, according to the Senate Finance Committee's overview of the TPA bill, the Congressional Trade Priorities Act of 2014.
But not every farm organization is on board. National Farmers Union President Roger Johnson came out swinging against fast-track negotiating authority for the president this week.
The NFU's concerns regarding fast-track date back to the North American Free Trade Agreement (NAFTA), “which did not live up to the promises made to Congress and the American people,” explains NFU's VP for Government Relations Chandler Goule.
“Fast-track is a power grab to bypass the authority of Congress to “regulate commerce with foreign nation,” Goule adds. “Farmers and ranchers should be able to ask their representative for changes that support their business. Current trade negotiations, like TPP, have been conducted in near secrecy, and granting so much power to the executive branch is not good policy.”
Yet, the TPA-14's sponsors argue that this bill is different than previous authorities -granted to every president since Franklin Delano Roosevelt - by strengthening oversight by the Congress and the public and adding consultation and new reporting requirements. TPA-2014 also provides for tougher, enforceable rules against barriers to U.S. agriculture, they argue. The full Senate Finance Committee has scheduled a hearing on TPA-14 for Thursday.
Without quick movement this year on TPA, which expired in 2007, there is little hope of completing both TPP and TTIP and jump-starting export opportunities - especially in the fast-growing Asia and Pacific regions where the U.S. has been losing share. That was a point driven home by Rowena Hume, trade counselor for the New Zealand Embassy, at the AFBF annual meeting this week. She said that improving the trade potential in the Trans-Pacific region alone will greatly help the share of American agricultural exports, which she said have decreased in that region by 40 percent in recent years.
“Regaining market share would increase U.S. total exports by $600 billion or 3 million jobs,” Hume said. “The TPP could increase exports by $2 billion, with the dairy industry benefiting the most.” Hume added that agricultural trade with all TPP members represents $150 billion-$79.6 billion for the U.S. alone-and 43 percent of all U.S. agricultural exports.
But passing new trade agreements, Hume argued, is as much about the present as the future. The TPP region is an engine of economic growth - as she pointed out with the map (above). China is not currently part of the TPP, but the agreement could set the stage for inclusion in the future. “Asia's middle class is expected to triple by 2020 and the demand for food will double by nearly $3 trillion in market value,” Hume added.
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