Ag Policy Blog

Think Tank: U.S. Ag Risks Lost Access Because of TPP Delays

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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A centrist Washington, D.C., think tank called The Third Way has issued a report highlighting how U.S. agriculture is losing out because of delays to passage of the Trans-Pacific Partnership.

The report is one of several briefs the Third Way is doing on the trade deal, which was formally signed last week by President

Like anything of consequence, it's unlikely Congress will take up the TPP until after the fall election despite all 12 nations signing the TPP last week in New Zealand. Supporters of the free-trade agreement, including Democrats, are calling on Congress to act rather than delay. A pair of former governors and a former U.S. trade representative had an op-end on Wednesday in the D.C. publication The Hill. They noted another report citing the cost of the waiting.

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"The Peterson Institute for International Economics report released last week found that a single year’s delay in implementing this agreement will set the U.S. economy back $77 billion," The Hill op-ed stated.…

The Third Way report highlights that American farmers risk being shut out of some fast-growing Asian markets without passage of TPP. Asian consumers, like everyone else, are price sensitive and higher tariffs make U.S. products less competitive. Meanwhile, the report notes, "other countries are racing to lock in their own lower, preferential rates. This makes their commodities more affordable and, thus, more enticing to foreign consumers -- putting U.S. products at a huge disadvantage."

The report points to how Australia has positioned itself to protect its sales in Japan, which is Australia's second-largest market. The two countries have already cut a separate trade deal, the Japan-Australia Economic Partnership Agreement, which went into effect in early 2015. In beef alone, Australia's tariff in Japan has dropped to 19.5% on frozen shipments while U.S. beef is taxed at 38.5%. The Third Way report notes that once TPP goes into effect, the U.S. will achieve parity with Australia and eventually see tariffs on beef reduced to 9%.

Australia also now has an advantage in tariffs for other products as well such as wine exports or products such as oranges. Australian oranges aren't taxed for part of the year going to Japan while the U.S. faces a 16% tax. Under TPP, the U.S. will have no tax on oranges.

The full report can be found at…

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