Ag Policy Blog

Outlook Appears Bleak for Trade Deals

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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President Obama appears to be at risk of losing both the TPP and T-TIP, losing greater agricultural market access in the process.

Both trade agreements have been treading water throughout the election year, but increasingly the two deals appear to be sinking.

The 12-country Trans-Pacific Partnership. The deal, which was agreed to last fall, includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Vietnam and the U.S. An International Trade Commission report in May cited that TPP would increase U.S. ag exports about $7.2 billion over 15 years while ag imports would grow about $2.7 billion. Ag would gain about $4.5 billion in net exports under the deal.

TPP has gotten beaten up from the left and the right. Media from The Nation to had their own spins on how corporate interests would benefit at the expense of others if TPP is ratified. Social media headlines against TPP are rampant. The Nation, for instance, claims biotech and seed companies would be the big winners under TPP at the expense of kale farmers.…

Last week was an interesting one for TPP. First, Reuters quoted Senate Majority Leader Mitch McConnell, R-Ky., telling members of the Kentucky Farm Bureau late last week that the Senate won't take up TPP this year. "The current agreement, the Trans-Pacific (Partnership) agreement, which has some serious flaws, will not be acted upon this year," McConnell said. He added, "But it will still be around. It can be massaged, changed, worked on during the next administration. So, I hope America will stay in the trade business."…

President Obama had sought to push the deal in the lame duck session. McConnell's comments seem to put an end to that likelihood.

Yet, the same morning Reuters is quoting McConnell, the American Farm Bureau posted audio promoting a Morning Consult poll that 57% of voters back "fair trade." After being told TPP would raise net farm income by $4.4 billion and ag exports by $5.3 billion (Farm Bureau's figures), 52% of those polled said they would likely support TPP.……

An earlier Morning Consult poll this month showed voters were split on the trade deal. Actually, 62% of the voters surveyed earlier this month had heard little or nothing about TPP -- clearly not DTN readers. The poll showed 43% of voters had no opinion on TPP, but 35% of voters were in the categories of strongly or somewhat supporting TPP, compared to 22% who either somewhat opposed or strongly opposed TPP.

Clearly, the 9% of people in the "strongly opposed" camp are incredibly vocal, and clearly have the ears of the presidential candidates.

The White House has tried to tout TPP, but few in Congress seem willing to carry water for the deal. Any major trade deal demands large Republican support in Congress, which doesn't seem likely given the rift within the party right now over trade.

Meanwhile, other TPP countries such as Australia, New Zealand and Vietnam aren't waiting around for the U.S. and Canada. As Bloomberg reported on Thursday, those countries are already in talks with China, India and other countries in the Regional Comprehensive Economic Partnership, another proposed trade deal that would become the largest in history. As Bloomberg noted, "The failure of TPP would boost a rival free-trade deal that includes China and India, but not the U.S."…

Across the Atlantic, European leaders are increasingly expressing failure for the TransAtlantic Trade and Investment Partnership, a deal that would have been even bigger than T-TIP, but has been hindered by the massive bureaucracies and rules in both the U.S. and Europe. This weekend, Germany's vice chancellor, Sigmar Gabriel, told a German TV network that "the negotiations with the United States have de facto failed even though nobody is really admitting it." He noted the U.S. and Europe haven't been able to close out a single chapter in the 27 chapters of the possible T-TIP.…

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8/29/2016 | 3:26 PM CDT
Has there ever been a trade deal good for the U.S. farmer? Just asking!!!!