Some ag issues still linger with TPP

WASHINGTON, Feb. 11, 2016 – Many in agriculture have thrown their full weight behind the Trans-Pacific Partnership, but some are still deciding if the pact is in the best interest of their industries.

That became evident Thursday at a roundtable hosted by the Washington International Trade Association. Representatives of dairy, sugar and tobacco industries all said they wish they could have gotten more out of the agreement, but there were signs of potential support from some of the interested parties. Darci Vetter, the U.S. Trade Representative’s chief agricultural negotiator, began the discussion by pointing to the hot-button nature of agricultural issues around the world.

“You shouldn’t underestimate the ‘culture’ part of (agriculture),” she said. “It’s true in our country and it’s true in all of the TPP trading partners. Agriculture is seen, and really is . . . a way of life.” Take Japan, for example, she said, which after years of negotiations agreed to provide more access to its rice market.

“The fact that Japan put rice on the table, that’s not about dollars and cents,” Vetter said. “It really speaks to a deeper part of their identity. We took advantage of the opportunities we had to move the ball as far as we could and to get what was feasible given our own sensitivities in key sectors and the sensitivities of others. It was difficult to say the least.”

Many in the beef, pork, and grain spheres are supportive of the increased market access they foresee through the agreement, but some other ag sectors are a little more cautious.

Jaime Castaneda serves as a private adviser to USTR stemming from his work with the National Milk Producers Federation, the U.S. Dairy Export Council and the Consortium for Common Food Names. Castaneda pointed to the “unique” position dairy holds with some of the TPP countries, including U.S. exporting rivals like New Zealand and Australia and customers like Canada, Japan and Mexico. Canada is known for dairy policies that are a hindrance to U.S. exports, and Castaneda said that the market access in the agreement to Canada and Japan is “a little bit of a disappointment.”

“We certainly wanted to actually see a major opening of that market,” Castaneda said, adding the qualifier that “that doesn’t mean the overall agreement may not end up as being positive for U.S. dairy.”

Castaneda said the dairy industry is still reviewing the agreement and has yet to declare a formal position, but he expects a “general national consensus on where we’re going to stand with respect to the agreement.”

In terms of sugar policy, Mary Latimer, a former USTR official who now works with candy magnate Mars Inc., said she “would have liked to see more (new) duty-free access for sugar into the United States,” but understands the complexities of trade negotiations that led to the sugar language in the agreement.

“We want to see this agreement enter into force,” she said. “We want to see it get the votes to pass the U.S. Congress.”

Perhaps the touchiest issue of the day was how tobacco is handled in the agreement. Peter Thornton, with the North Carolina Department of Agriculture and Consumer Services, expressed concern about what TPP would do to the state’s tobacco industry. In particular, he expressed concern with some language barring tobacco companies from using the Investor-State Dispute Settlement (ISDS) process, which allows private companies to challenge laws in other countries.

“If you can’t defend yourself, you know you’re not going to win,” Thornton said. “And if your opponents know you can’t defend yourself, they’re going to attack.”

Thornton painted a dismal economic picture for areas of North Carolina with prominent tobacco production. He said many of the areas were still feeling the hit from decreased textile and manufacturing jobs. Tobacco exports support about 18,000 jobs just in North Carolina, Thornton said, and the time to replace those lost jobs would be measured not in years, but in generations.

“When tobacco companies are in trouble, they don’t write contracts to growers,” he said. “And when they don’t write contracts to growers, that affects North Carolina.

“When you see North Carolina legislators fighting against this, I know there’s a big temptation to say,  ‘Oh, they’re just in the pocket of big tobacco,’” Thornton added. “But from our perspective, they’re our last hope.”

Vetter noted that while the agreement does bar the challenge of tobacco control measures through ISDS, existing dispute settlement provisions would remain in place. She pointed out that in many instances, the U.S. ISDS process isn’t used because existing U.S. legal channels are instead utilized.

“Where those avenues exist in our TPP countries, they would still exist and our tobacco companies could use them,” Vetter said. “We don’t change the legal systems of those other countries.”

She said, for example, that if a country were to bar U.S.-made cigarettes under the guise of an anti-smoking measure, the affected parties could go through traditional dispute settlement channels because of the measure’s protectionist nature.

Vetter also acknowledged that she was aware of issues raised by the National Pork Producers Council about a potential Japanese subsidy program for domestically produced pork, but said she was working with the Japanese government to figure out what that program might entail.

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