Trump Reconsiders TPP

OMAHA (DTN) -- In a wide-ranging talk with Republican governors and senators Thursday about agriculture and trade, President Donald Trump suggested reopening talks for the U.S. to reenter the Trans-Pacific Partnership.

Talking on both trade and ethanol, Trump also said in the same meeting his administration would open up biofuel blends to 15% ethanol year-round.

The U.S. withdrew from the Trans-Pacific Partnership -- an 11-country trade deal without the U.S. -- just after Trump took office. At the time, Trump said pulling out of the deal was "a great thing for the American worker."

Now, the president is revisiting that decision. Sen. Ben Sasse, R-Neb., coming out of Thursday's meeting, said Trump told economic adviser Larry Kudlow and Trade Ambassador Robert Lighthizer to take a look at getting back into TPP.

"The big headline coming out of this meeting is that the president said he was deputizing Larry Kudlow and Ambassador Lighthizer to look at reentering the TPP negotiations," Sasse said.

Sasse added that Trump said multiple times and reaffirmed the push on TPP "and looked right at Larry Kudlow and said, 'Larry, go get it done.'"

In a statement, Sasse said getting back into TPP would be a way to counter some of China's unfair trade practices.

"The best thing the United States can do to push back against Chinese cheating now is to lead the other 11 Pacific nations that believe in free trade and the rule of law," Sasse said. "It is good news that today the president directed Larry Kudlow and Ambassador Lighthizer to negotiate U.S. entry into TPP."

The American Farm Bureau Federation in 2016 concluded TPP would generate $4.4 billion a year in net farm income once fully implemented. But the trade deal was modified once the U.S. walked away from it.

The U.S. Wheat Associates and National Association of Wheat Growers wasted little time applauding the decision to re-enter the trade pact.

"Putting it simply, joining TPP is the best way to avoid a potentially devastating loss of wheat sales to Japan," said Michael Miller, a wheat farmer from Ritzville, Washington, and chairman of the U.S. Wheat Associates. "If the United States joins TPP, U.S. wheat should be able to compete on a level playing field with Canadian and Australian wheat, which will soon have a major advantage once TPP is implemented. That would keep U.S. wheat sales that currently represent 50 percent of Japan's total wheat imports competitive in this crucial market."

Trump talked about a range of issues regarding farmers. He vowed his administration would open up 15% ethanol use to year-round blends. That would require forcing the Environmental Protection Agency to grant a waiver to its vapor pressure standard. Trump said it will get done.

"We're going to go to 12 months, which makes a lot of farmers very happy -- because we go from eight months to 12 months, that's a big difference. That was always unnecessary and ridiculous," Trump said.

Yet, the president noted the complexity of opening up 15% ethanol year-round. He said it could take a two-year transition period to make it happen.

"So we're going to work out something during the transition period, which is not easy, very complicated, because we have to take care of our refineries," Trump said.

The announcement led to words of praise from the Renewable Fuels Association, American Coalition of Ethanol, Growth Energy and National Farmers Union. In a nutshell, they are all for 15% blends year-round.

"This is welcome news for Iowa's farmers and American motorists as it will help expand the availability and market access for higher blends of ethanol," said Mark Recker, president of the Iowa Corn Growers Association.

Trump noted farmers have been struggling, but he told senators and governors that, between talks with China, the North American Free Trade Agreement, and even talks with the European Union, the trade situation was going to be better.

"A lot of times, the farmers sort of -- they know what they have," Trump said. "But it'll be very good when we get it all finished. It'll be great. People are a little bit concerned going into that wild blue yonder, or, in our case, the wild red yonder. But I will say that the farmers are going to be -- they're going to do fantastically well."

On NAFTA, news reports indicate a deal is close to terms, but Trump somewhat diffused those statements. He said talks are on-going, and could continue. As long as talks are continuing, Trump said, no American businesses were making new investments in Mexico, so he considered that a positive outcome. Trump reiterated he would not mind terminating NAFTA and starting over.

"So agriculture is OK with NAFTA. Not great. We're going to make it great. We're going to make it great. And we're getting pretty close to a deal," Trump said. "It could be three or four weeks. It could be two months; it could be five months. I don't care. I'd say I'd rather terminate NAFTA and make a brand new deal, but I'm not going to do that because I want everyone to be happy in this room, OK? We'll see how it goes."

Trump also was critical of the European Union's restrictions and limited sales for U.S. agricultural products. He said that has to change as well.

"So the European Union makes it very hard for agricultural products because their farmers don't want you there. The farmers say, 'We don't want the American farmers.' But that's not fair because we take all of their stuff. A lot of cars and lot of other things. So they're going to have to take down the barriers because we can't have it," Trump said.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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