Trade Bill Heading to President

Ag Groups Largely See Opportunity From Pending Trade Deals

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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The trade promotion authority bill is expected to provide some added leverage to President Barack Obama's push to close a 12-country trade deal in the Pacific. (DTN file photo)

OMAHA (DTN) -- As if on cue, agricultural groups on Wednesday quickly praised the U.S. Senate for final passage of a trade promotion authority bill meant to provide some added leverage to President Barack Obama's push to close a 12-country trade deal in the Pacific.

By a vote of 60-38, the Senate sent the TPA bill to Obama, but the president is expected to wait until Congress finalizes a companion bill on trade assistance before signing the trade bills. The final passage of TPA is a major victory for the Obama administration, which has been in a non-stop tussle with congressional Republicans, who on this issue backed the president. This time, it was skeptical Democrats the president needed to sway to vote for the trade promotion bill.

The bill provides specific guidelines from Congress over lawmakers' goals for any trade deal, but would carry on until at least July 2018.

Bob Stallman, president of the American Farm Bureau Federation, said the final Senate vote on TPA "sends a strong signal to foreign governments that we mean business at the bargaining table and are ready to complete new agreements that will break down trade barriers and open new markets from Asia to Europe."

The National Pork Producers Council noted the Trans Pacific Partnership negotiations could potentially add 10,000 more U.S. jobs tied to pork exports, based on an Iowa State University economist's findings. The pork industry could see exponential growth from the trade deal.

"U.S. trade negotiators now have the leverage they need to close the TPP negotiations," said Ron Prestage, president of the NPPC, and a pork producer from Camden, South Carolina. "The U.S. pork industry needs TPP to continue growing our exports."

The Trans Pacific Partnership includes the U.S., as well as Australia, Brunei Darussalam, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Those countries already account for more than 40% of all U.S. ag exports and 47% of all agricultural imports as well.

Potentially, Colombia, the Philippines, Taiwan and South Korea could join the TPP trade deal as well.

TPP is expected to lower tariffs that are as high as 240% for products such as U.S. poultry in some countries and tariffs that can reach 90% for U.S. produce and 50% for beef in some of those markets as well.

The U.S. also is negotiating a trade deal with the European Union called the Transatlantic Trade and Investment Partnership that could be an even larger deal, but those talks are further behind the Pacific talks.

The American Soybean Association called on President Obama to sign the TPA bill as quickly as possible to help finalize the Trans Pacific talks. Wade Cowan, president of ASA and a Texas farmer, noted 60% of U.S. soybeans are exported.

"That investment in overseas markets creates demand here at home, and translates to real dollars for farmers and rural communities," Cowan said. "Plus, for the nation as a whole, trade both creates and sustains jobs. Every billion dollars in U.S. agricultural exports supports almost 7,000 American jobs. An administration equipped with TPA is better able to represent this essential component of our economy at the bargaining table, and the Senate deserves a big 'thank you' for helping to make it happen."

The National Cattlemen's Beef Association reiterated similar themes, citing that beef exports topped $7.1 billion in 2014 and there is more to be had with potentially lower tariffs and import restrictions through pending trade deals.

"As the demand for U.S. beef continues to grow around the world, the future success of the beef industry rests in our ability to meet foreign demand without interference of tariff and non-tariff trade barriers," said Philip Ellis, president of NCBA. "With TPA passed, the U.S. can focus on finalizing trade agreements like the Trans-Pacific Partnership that will give us greater access to consumers throughout the Pacific Rim."

Chip Bowling, a Maryland farmer and president of the National Corn Growers Association, called Wednesday's vote a "huge victory for America's corn farmers and the entire agricultural industry." He added, "With major trade negotiations underway in the Asia-Pacific region and Europe, today's vote could not have come at a better time. The U.S. is back in the driver's seat, negotiating the best possible deal for American farmers and livestock producers in these and other future trade agreements."

Tom Nassif, president and CEO of Western Growers Association, cited that the U.S. exports $15 billion in fresh produce, but imports nearly $19 billion. Trade deals should allow U.S. trade negotiators to provide more market access to Pacific countries, he said.

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Chris Clayton