Ag Keeps Looking to CPTPP

OMAHA (DTN) -- Agricultural groups are frustrated over the lack of any new trade talks by the Biden administration, especially in Southeast Asia as other countries now increasingly want to join the 11-country Comprehensive and Progressive Agreement for the Trans-Pacific Partnership.

Pork producers, dairy farmers, corn farmers and grape growers highlighted trade concerns Thursday in an online event led by Farmers for Free Trade. While agricultural exports are at record levels, ag groups want the Biden administration to reengage on the Pacific trade deal once called TPP but now dubbed CPTPP.

U.S. agriculture just closed a record fiscal year 2021 at the end of September with USDA projecting final sales will come in at $173.5 billion, a $33.81 billion increase from FY 2020. USDA forecasts fiscal year 2022 sales will hit $177.5 billion. Sales in FY 2021 were buoyed by $37 billion to China with Canada coming in at $23.6 billion and Mexico at $22 billion in U.S. agricultural purchases.

Joe Glauber, former ag trade negotiator and USDA chief economist, said the level of growth in U.S. agricultural exports is "staggering" in several sectors including beef, dairy, pork and dairy. Still, while the U.S. over the past few years was in trade wars or renegotiating old trade agreements -- NAFTA becomes USMCA -- Glauber said competitors were not sitting idle.

"A lot of other countries around the world have been pursuing trade agreements," Glauber said. "And so, unfortunately, we may have decided to leave TPP, but the rest of those countries got an agreement. And so what we found ourselves is on our heels trying to figure out what we do with Japan because we need that market and all of a sudden, all of our trading partners now have better access."

Doug Chapin, a dairy farmer and chairman of the board for the Michigan Milk Producers, noted the dairy industry had about $6.5 billion in export sales last year. But aside from renegotiating with Canada and Mexico to create the U.S. Mexico Canada Agreement, it's been a decade since the U.S. completed a major new trade agreement. Talks began with the Trump administration for a deal with the United Kingdom but were not finished. Chapin said he'd like to see the Biden administration push for renewed Trade Promotion Authority to get some broader trade agreements to reduce tariffs and other barriers for dairy exports.

"We seem to be at times evaluating or negotiating new deals but not implementing new comprehensive trade agreements that eliminate tariffs on our exports," Chapin said.

Looking at Southeast Asia, Chapin said, "We feel we're falling behind a lot of our competitors in trade agreements and we feel we have to get more to access dairy in those markets."

Glauber said it makes sense for the Biden team to reengage at some point on the Trans-Pacific Partnership. A multilateral trade deal with 11 other countries makes more sense, he said, than trying to negotiate one-on-one trade deals.

"To do it individually, it just takes a lot of resources," Glauber said.

Deb Gangwish, a Nebraska farmer and board member for the National Corn Growers Association, touched on the need to make sure trade partners are held accountable in agreements, noting Mexico is a $3 billion market for U.S. corn, and alluding to Mexico's increasing policies against biotechnology. Labor shortages and supply chain issues are growing concerns as well, but reestablishing trade talks in Southeast Asia is a top priority for NCGA right now, she said.

"I think I echo what a lot of people have said, and a lot of people may echo the same thing I'm saying. The Southeast Asia region is huge for us," she said.

Howard "AV" Roth, a Wisconsin farmer and past president of National Pork Producers Council, said the effect of CPTPP is that the U.S. is starting to lose some of its market lead in Japan. There are other markets of high value already in the Pacific trade deal, such as Vietnam.

"These are huge markets for our pork, and we need to be there with our competitors," Roth said. "You could start knocking off a number of bilateral agreements if we get back in CPTPP.

Agriculture's push for the U.S. to get back into CPTPP comes as the United Kingdom has sought to join the deal as well as South Korea and Taiwan. Last month, China even submitted paperwork to join the regional trade deal, which is an ironic twist given the Obama administration started the initial TPP talks to offset the influence of China in the Pacific Rim. The pending battle between Taiwan and China over CPTPP membership is one key reason the U.S. needs to get over its reluctance and rejoin the trade deal, wrote Hiroyuki Akita, a columnist for Nikkei Asia in a recent column. https://asia.nikkei.com/…

Darci Vetter, who led the U.S. agricultural negotiations on the original Trans-Pacific Partnership, said right now all agriculture can do is take the administration at its word that the U.S. Trade Representative's Office may reengage on CPTPP, but U.S. Trade Representative Katherine Tai has said the trade deal needs better labor and environmental standards.

"They feel it's a little bit outdated, particularly in labor and environment," Vetter said. "There's a strong emphasis on saying we can use trade as a force to influence other key priorities on how people participate in trade and making sure we don't race to the bottom in terms of the environment, that we can use our trade architecture to try to encourage better environmental practices globally."

Outside of CPTPP, Manuel Almira, executive director for the Port of Palm Beach, Florida, said during the discussion that COVID-19 remains one of the biggest impediments to trade right now. Almira's port relies heavily on the cruising industry, which has been slow to recover due to people remaining reluctant to travel. Almira added, though, that COVID also has slowed agricultural exports to Caribbean countries.

"We can get cruising back up to speed and get consumption back up in and around the Caribbean back up to levels they were before, and consequently we can get back to normal," Almira said.

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

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