Negotiators Reach TPP Deal


by Chris Clayton DTN Ag Policy Editor

OMAHA (DTN) — Trade negotiators from the U.S. and 11 other Pacific Rim countries declared Monday morning they had completed their work on the Trans-Pacific Partnership, which is being called the largest global trade deal ever achieved.

U.S. Trade Representative Michael Froman declared at the opening of a press conference that the 12 countries had successfully concluded their talks “after more than five years of intensive negotiations.”

It's now up to the Obama administration to convince Congress that the world's largest trade deal would be good for the overall economy.

Under the Trade Promotion Authority legislation approved by Congress over the summer, President Barack Obama must notify Congress of his intent to sign a final TPP agreement 90 days before signing. The draft text must be published 60 days before the agreement before a bill is sent to Congress.

The time delay means any Trans-Pacific deal would not come before Congress until the middle spring presidential primaries and congressional campaigns. Given that Trade Promotion Authority was a struggle to pass, the 2016 political season will further complicate the possibility of finalizing the trade pact.

Acknowledging the political challenges, Froman noted, “today represents an important first step.” He said the administration would be working closely with members of Congress, industry stakeholders and the public.

“I think I will leave presidential politics to someone else,” Froman said. “Our job is to reach an agreement and fully explain it to the public.”

Opponents in multiple countries throughout the trade talks have seized on the lack of text and details of the agreement to argue that the trade deal gives up sovereignty for the sake of profits for multi-national exporters.

The Trans-Pacific Partnership includes the U.S., Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The trade deal encompasses a population of roughly 800 million people and more than 40{257ecae47c7fec349321aca28547072fa2160c1991a573be7695613338f0f130} of the global gross domestic product.

The Obama administration sees the trade deal as a way to offset some of China's influence in the region by further linking the economies of the Asian countries to North America.

For agriculture, the deal is expected to give a lift to U.S. grain and meat exports. The USTR cited that of $148 billion in U.S. ag exports in 2013, the TPP countries accounted for $58 billion. High tariffs, such as a 40{257ecae47c7fec349321aca28547072fa2160c1991a573be7695613338f0f130} tariff for poultry exports to Malaysia, would be eliminated under the trade deal.

A USDA analysis projects U.S. ag exports to Trans-Pacific countries would increase by about $2.8 billion over the next decade. Agricultural exports among all 12 Trans-Pacific Partnership countries are expected to grow about $8.5 billion over that time.

Following talks in Hawaii, U.S. agricultural groups expressed concern over what they saw as a lack of access for rice exports to Japan and Canada's unwillingness to lower its tariffs and import restrictions on dairy products.

After expecting to announce the deal on Sunday, talks carried on until early Monday morning, Froman said. Dairy issues, such butter exports, were among the final issues negotiated, said New Zealand Minister of Trade Tim Groser. He and Canadian Trade Minister Ed Fast both acknowledged some industries will have to change or evolve as part of the TPP. Groser also said he believed other countries would eventually join the TPP as well.

“Long after the details of negotiations on things such as tons of butter have been regarded as a footnote in history, the bigger picture of what we achieved today will be what remains, and it is inconceivable that the TPP bus will stop in Atlanta. The TPP bus will move on. We will be able to evolve,” Groser said.

Andrew Robb, Australia's trade minister, said the deal will make it easier for trade to move more seamlessly among countries representing 40{257ecae47c7fec349321aca28547072fa2160c1991a573be7695613338f0f130} of global GDP. He noted that the deal addresses “mundane” items such as dealing with trade paperwork in customs.

Early Monday, groups such as the National Pork Producers Council and National Cattlemen's Beef Association immediately praised the deal. NPPC stated the group was confident the deal would be good for U.S. pork producers. “We look forward to reviewing the full text of the TPP agreement and the schedules of market access concessions as soon as possible,” said Ron Prestage, president of the National Pork Producers Council. “We are reserving final judgment on the package until then.”

Reports out of the trade talks Sunday focused on the battle between the U.S. and some other trade partners over how long to offer patent protection on pharmaceutical drugs. The U.S. gives companies 12 years for those patent rights, but Australia and others have balked at giving drug companies that length of time, Reuters reported.

Canadian Press reported dairy access also was a lingering issue on Sunday. New Zealand wants greater access to sell more dairy in the U.S., but U.S. negotiators were unwilling to further open the market until Canada and Mexico do the same for U.S. dairy products. Until now, Canada has balked at dealing with dairy because of the country's supply management system for dairy, eggs and poultry products.

While full details aren't known, trade ministers noted that Canada will be able to keep its supply management program on dairy while the U.S. also further opened up sugar imports, but maintained quotas to limit the volume.



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