After loss of TPP, farm sector wants quick action on bilateral deals

WASHINGTON, Jan. 25, 2017 - It’s official. With a stroke of the pen, President Donald Trump on Monday pulled the U.S. out of the Trans-Pacific Partnership, a 12-nation trade pact that most U.S. farm groups counted on to help boost sales for producers who are struggling with low prices and rising financial stress.

The American Farm Bureau Federation predicted that tariff cuts and other measures in the TPP would net farmers an extra $4.4 billion annually, and the National Cattlemen’s Beef Association was counting on the pact to help it compete with Australia for Japan’s massive beef demand.

Wheat farmers were also hoping the deal would be approved. “U.S. wheat farmers depend heavily on export demand to determine their per-bushel income,” said Jason Scott, chairman of the U.S. Wheat Associates. “We can compete very effectively in Asian and Latin American markets where the demand for high quality wheat is rapidly increasing and our organizations took a long view of the benefits TPP held out — a trade agreement that promoted economic growth abroad as a way to grow export sales and prosperity for farmers at home.”

Now, the Obama’s administration’s bid to take the lead in trade policy in the Pacific Rim is over, and farm groups are anxious about what comes next and how they can boost agricultural exports.

Groups like the American Soybean Association (ASA) and the Farm Bureau are saying that trade expansion is too important to abandon just because the U.S. has pulled out of TPP.

“With this decision, it is critical that the new administration begin work immediately to do all it can to develop new markets for U.S. agricultural goods and to protect and advance U.S. agricultural interests in the critical Asia-Pacific region,” Farm Bureau President Zippy Duvall said in a statement.

If the U.S. can’t have a multilateral trade deal with the TPP nations (Japan, Mexico, Canada, Australia, Vietnam, Brunei, Chile, New Zealand, Peru, Singapore and Malaysia), farm groups and lawmakers say the U.S. needs to start moving on bilateral agreements.

"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,” said American Soybean Association President Ron Moore.

“Also, we expect a seat at the table to help ensure these agreements in whatever form they take are crafted to capture their full value for soybean farmers. Trade is too important for us to support anything less.”

Commodity prices are still low, farmers and ranchers need to export more to cut down on domestic supply, and getting foreign countries to remove trade barriers is still needed, the groups say. But without TPP, it’s going to be difficult, said David Salmonsen, a senior director of congressional relations at the Farm Bureau.

“How do we move forward to make a better trade environment without (TPP)?” Salmonsen asked in an interview. “I think that’s what the challenge is. I think everybody is eager to have that conversation when the (Trump) administration is ready.”

Trump and Wilbur Ross, the nominee to lead the Commerce Department, have both stressed their preference for bilateral deals strictly between the U.S. and one other country. The first country the new U.S. administration should reach out to is Japan, Salmonsen said.

Japan, which with the U.S. pull-out is now the largest economy in the TPP, ratified the trade deal on Friday, according to a report by the Nikkei Asian Review. The act may have been futile. Even Prime Minister Shinzo Abe has said it would be “meaningless” to implement the pact without the participation of the U.S.

Farm group officials aren’t the only ones hoping the Trump administration will follow through quickly with bilateral trade deals. House Agriculture Committee Chairman Mike Conaway told Agri-Pulse that Trump is “going to have to deliver on that promise that production agriculture is going to come out ahead of where they would have come out with TPP.”

House Ways and Means Committee Chairman Kevin Brady and Rep. Dave Reichert, chair of the trade subcommittee, both urged the Trump administration not to allow all of the work done on the TPP and its positive aspects go to waste.

“It's important that America not abandon the Asia-Pacific region because American companies and workers will lose out,” Brady said in a statement. “I urge the Trump administration to build on the work that has been done, identify what should be improved, and quickly act on a strategy that creates more economic opportunities for America in that region.”

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