Pacific Trade Pact Buried

OMAHA (DTN) -- The Trans-Pacific Partnership is likely dead for the United States.

Farm groups whose members supported President-elect Donald Trump in large numbers are faced with seeing the new president kill a trade deal those farmers have aggressively lobbied Congress to pass. Among his first acts, Trump is expected to withdraw from the Pacific trade deal that most U.S. farm groups have championed for the past year.

No other industry has tried to rally support for the Trans-Pacific Partnership (TPP) as much as the farm lobbies. Earlier this week, the American Soybean Association and National Corn Growers Association issued news releases calling on Congress to vote on the Trans-Pacific Partnership in the lame-duck session.

But Senate leaders from both parties have declared in the past two days that the 12-country trade deal will not come up in the lame-duck session of Congress. The New York Times reported Friday that Sen. Chuck Schumer, D-N.Y., the incoming leader for Democrats in the Senate, told labor leaders that the deal would not be approved. Senate Majority Leader Mitch McConnell, R-Ky., had told reporters the day before that Trump would have authority as president "to negotiate better deals, as I think he would put it," the Times quoted. http://dld.bz/…

The TPP was attacked by both parties throughout the primaries and in the rhetoric and debate leading up to Tuesday's election. Trump built part of his support by addressing a large swath of blue-collar and rural voters who believe the U.S. has lost industries and jobs because of poorly negotiated trade deals.

President Barack Obama has argued, unsuccessfully, that TPP would eliminate tariffs on more than 18,000 U.S. products. Further, Obama and his administration have argued that TPP would help the U.S. offset some of China's growing influence in the region.

TPP was labeled as the world's largest regional trade agreement, taking up roughly 40% of the global economy. The U.S. already does $864 billion in exports of goods and services to the other 11 countries in the TPP trade deal, which includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

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.

As recently as last week, U.S. Trade Ambassador Michael Froman held a press call with the vice president of the National Cattlemen's Beef Association to champion TPP and stress that the Obama administration was still pressing for a vote in the lame-duck. That was before Trump's sweeping election victory.

"We're already seeing lost exports because other countries, like Australia, are moving ahead with preferential trade agreements, with countries like Japan, that are having an adverse effect on some of our exports," Froman told reporters last week.

Kevin Kester, a California cattle producer, told reporters just the lack of a deal with Japan alone was costing the industry about $400,000 a day in lost sales.

Trump has detailed in a 100-day action plan that the U.S. would drop out of TPP within the first 100 days. By mid-year, Trump could also follow through on a campaign promise to withdraw from the North American Free Trade Agreement if concessions aren't made by Canada and Mexico.

Politico reported Thursday that Canadian leaders are willing to open up talks, but they too would have demands.

"If they want to have a discussion about improving NAFTA, then we are ready to come to the table to try to put before the new administration anything that will benefit both Canada and the United States and obviously Mexico also," Politico quoted Canada's ambassador to the United States, David MacNaughton, in a conference call with journalists. "So we are prepared to talk." http://politi.co/…

BBC News quoted Mexico's foreign minister on Friday stating that Mexican leaders are willing to discuss NAFTA with Trump, but not renegotiate it.

NAFTA accounts for about $1.23 billion in annual trade between the U.S., Canada and Mexico. The U.S. had a $46.1 billion net trade deficit in 2015 under NAFTA, which equates to about 8% of total U.S. export volume of $575.6 billion last year.

U.S. ag exports under NAFTA totaled $42 billion in 2015 while ag imports under the trade deal accounted for $43 billion. So the U.S. has about a $1 billion ag-trade deficit, mainly due to imports of both fresh and processed fruits and vegetables from Mexico.

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

Follow him on Twitter @ChrisClaytonDTN

(ES/AG)

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