The Trump administration has formally announced to Congress that it intends to begin negotiating free trade agreements with Japan, the European Union and the UK. That starts the ball rolling on what the U.S. ag sector has been clamoring for: new trade deals that will help boost farm commodity exports by tearing down tariff and non-tariff barriers.
“Today’s announcement is an important milestone in that process,” U.S. Trade Representative Robert Lighthizer said in a statement. “We are committed to concluding these negotiations with timely and substantive results for American workers, farmers, ranchers, and businesses.”
The Trump administration must give Congress a 30-day warning before it can begin new FTA talks under the Bipartisan Congressional Trade Priorities and Accountability Act of 2015, known more commonly as Trade Promotion Authority (TPA).
Praise for the announcement arrived quickly from Capitol Hill.
“A trade agenda that prioritizes free trade and open markets is the best ways to defend American interests and strengthen our economy,” said Senate Finance Committee Chairman Orin Hatch, R-Utah. “I am pleased that the administration is pursuing new trade agreements with several of our most important trading partners in accordance with Trade Promotion Authority (TPA).”
A potential FTA with Japan would be huge for U.S. farmers.
The U.S. exported $12 billion worth of ag commodities like wheat, corn, dairy, beef, pork and sorghum to Japan last year, making it the fourth largest foreign market for U.S. farm goods.
It was a blow to most of the U.S. ag sector when President Donald Trump pulled the U.S. out of a free trade deal with Japan and 10 other countries (the Trans-Pacific Partnership, or TPP) in January, last year. The American Farm Bureau Federation had predicted the deal would eventually generate an additional $4.4 billion annually for the U.S. ag sector. Most of those increased sales would have been to Japan.
Negotiating trade deals with the UK and EU may be less straightforward, at least until late March 29 when Britain is set to officially exit from the European trade bloc. Lighthizer said in the letter to congress on the UK the two countries are laying the ground work for an FTA now, but will not be able to begin actual talks until after the “Brexit.”
The way in which the UK exits the EU is important for U.S. agriculture because American farmers need the British to make a decisive break from European restrictions on U.S. poultry, pork and beef.
The National Pork Producers Council “will not support a deal with the U.K. unless it agrees to equivalence, meaning that all USDA-approved pork and pork products must be eligible for export to the U.K. without additional requirements,” said NPPC President and Ohio pork producer Jim Heimerl.
Heimerl said he’s also skeptical about an FTA with the Europe.
“The EU has played the United States like a drum in the past,” said Heimerl. “This must stop. We expect the Trump administration to require the EU to eliminate all tariff and non-tariff barriers to U.S. pork so we can export with no additional requirements.”
Trump administration officials have been stressing for months to farm group leaders that Europe’s restrictive agricultural policies will be negotiated in any free trade agreement.
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