The pros and cons of TPP
Jan. 15, 2016
by Erica Shaffer
WASHINGTON – The National Chicken Council (NCC) has had mixed experiences with free trade agreements, and it appears the Trans-Pacific Partnership will be no different.
|Mike Brown, president of the National Chicken Council
Mike Brown, NCC president, attended a US International Trade Commission hearing on behalf of the council and the USA Poultry & Egg Export Council (USAPEEC) to discuss how trade negotiations have helped and hindered overseas market access for poultry produced in the United States. The hearing also presented an opportunity for the poultry industry to speak about the promise the TPP holds for US poultry exports.
Brown explained that past free trade agreements have given trade partners’ most competitive products access to US markets. But the same access to foreign markets hasn’t been comparable.
“During past free trade negotiations, poultry has often, even typically, been denominated as a “sensitive product” and the terms of market access for US poultry is among the final issues negotiated in these agreements, with US poultry getting access far less favorable than what is afforded other products,” Brown said. “Regrettably, for the US industry, “free trade agreement” does not always mean real free trade in poultry and egg products.”
For example, products in three common categories are liberalized so that tariff rates go to zero when the agreement comes into force, while the most sensitive products are liberalized over 10 years. But in a number of past negotiations, Brown said poultry has been excluded from the three common categories and liberalization has taken far longer than any other product.
“In the CAFTA agreement, liberalization for poultry takes 18 years; in the US-Peru Free Trade Agreement, 17 years; in the US-Colombia Free Trade Agreement, 18 years; in the US-Panama Free Trade Agreement, 18 years; in the US-Morocco Free Trade Agreement, 24 years,” Brown noted. “No other sector has been subject to this type of consistent exclusion from the ordinary categories for liberalization.”
In 2014, the US exported $128 million of poultry and poultry products to Japan, but Japan’s tariffs are currently as high as 21.3 percent, the NCC noted. Under the TPP agreement, tariffs on all poultry, eggs, and egg products will be eliminated in six to 13 years. The same year the US exported $92.7 million of poultry and poultry products to Vietnam. Vietnam’s tariffs on poultry and poultry meat, currently as high as 40 percent, will be eliminated within 13 years. This includes tariffs on frozen chicken cuts and offal, which will be eliminated in 11 years.
The TPP represents the same mixed results for the poultry industry, Brown said. In its current terms, the TPP would only provide a moderate improvement for US exports of poultry products in three of the 11 markets participating. The agreement with Canada especially provides no meaningful increase in access for US poultry. Rather, US exports of poultry to Canada would grow through small increases in quotas for a long period of time.
“While virtually all other commercial sectors have been able to play the NAFTA game for the past three decades, US poultry has been relegated to the sidelines,” Brown said. “The TPP was the opportunity to correct a 30-year-old mistake, and very frankly, the results of this negotiation are disappointing in that regard.”
Still, Brown acknowledged the work of the US Trade Representative on behalf of all agriculture and expressed the poultry industry’s support for TPP.
“We are wholeheartedly supporting TPP, as we did all the other Free Trade Agreements and will do all within our industry’s power to support passage and implementation by Congress,” Brown concluded.