Ag Leaders Push Global Trade Expansion

OMAHA (DTN) -- At the end of a week that saw China send mixed signals on agriculture trade, U.S. Secretary of Agriculture Tom Vilsack said the time has come for federal lawmakers to approve the Trans-Pacific Partnership.

Those in favor of the TPP say it is important for the U.S. to move quickly, so as not to allow China to take the lead on trade in Southeast Asia.

This week, China agreed to re-open beef imports from the United States and made an agreement with Canada to import more canola, while also moving forward with an anti-dumping case against U.S. distillers grains.

"When we open trade, we spur innovation," said Vilsack, who was the keynote speaker at the National Agriculture State Departments of Agriculture luncheon in Omaha on Friday.

"TPP allows us a process to reduce barriers, an opportunity to expand agriculture trade. By the most conservative estimate from the Farm Bureau, TPP would mean about $5 billion additional sales of agriculture products, and about $4 billion of additional income for farmers.

"This is an impact at a time when they'd like to have more sales. It may be the only reason we need it."

Vilsack said 30% of U.S. agriculture sales are directly related to exports.

One of the major concerns among the nations that have signed on to TPP is that if the U.S. Congress does not ratify the agreement, China will be in the driver's seat on setting the trade agenda. Currently, there are 12 nations signed on including the U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

"If we don't do this, it's not as if the world stops," Vilsack said. "If we can't get this done, countries still are participating in bilateral agreements. Why would we allow a reduction in barriers to our competitors' products? It's unfortunate today the conversation in this country is to look inward. We need to expand the conversation about the importance of agriculture to this country."

In the past eight years, Vilsack said, the Obama administration reduced some 2,000 trade barriers. What's more, Vilsack said he's confident the U.S. will win a recent trade case launched against China with the World Trade Organization, challenging that nation's subsidies for corn, rice and wheat.

In addition, Vilsack lauded China's decision to begin the re-opening of U.S. beef imports.

"We're pushing ahead," he said. "We want to reach past the level of beef sales prior to BSE (bovine spongiform encephalopathy) in 2003."

INTERNATIONAL PANEL

During an international panel at the NASDA event, Nathan Guy, New Zealand's prime minister for primary industries, said his nation has signed on to TPP because of the trade rules that would be established.

"For us, having consistent, enforceable rules is an essential thing," he said. "The world finds itself in a situation where the benefits of trade liberalization are obvious, yet the opposition is bigger than ever. In our experience, open rules-based trade has made New Zealand richer, has given us the ability to innovate and has made our economy more secure."

Through various trade agreements, Guy said, his nation gave up agriculture subsidies and the results were dramatic.

"Before subsidies came off, we had 7 million sheep," he said. "After they came off, we had 30 million sheep because it opened innovation. TPP is a major step in the right direction. New Zealand and other TPP countries want it ratified as soon as possible.

"Bottom line, if TPP doesn't come into force, it will disadvantage both New Zealand and U.S. producers. There are growing and hungry markets that want more of what we produce."

Ricardo Negri, Argentina's secretary of agriculture, livestock and fisheries, said political and economic upheaval in his country has placed a premium on building a strong agriculture economy. Argentina has not signed on to the TPP.

"Our country needs to play a strong march in food security in the next 20 years," he said. "We are making strong change in our country. Our ministry is an open door to have discussions with everybody."

In December 2015, Argentina decided to reduce export taxes on many goods. Export tax reductions on soybeans are expected to come in the next few years, Negri said. Export taxes hurt the country's beef industry, he said. As a result, while local Argentine markets have benefitted from low-priced beef, the country's farmers lost income from potential exports.

"We are traveling the world to let everyone know we are changing," Negri said. "We want to be important providers in this market to the world."

The Argentine government is putting policies in place to spark agriculture growth. The goal is to expand grains and oilseeds production by 50% and to increase dairy production by 15% to 17% in the next five years, he said.

"We share the same challenge to feed the world," Negri said. "We need to strengthen the institutions. If we want to be the supermarket of the world, we need to be at the same level (with trading partners)."

Guy said for New Zealand it's about building an agriculture industry that not only produces commodities, but then builds a system to add value to those commodities.

"(With TPP), we get common rules we can all adhere to," he said. "...Moving up the value chain is always going to be a challenge."

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(AG/CZ)

Copyright 2016 DTN/The Progressive Farmer. All rights reserved.