WASHINGTON – President Donald J. Trump signed an executive order Jan. 23 withdrawing the United States from the Trans-Pacific Partnership (TPP) agreement, which was signed by President Obama as well as the leaders of 11 other Pacific Rim nations.
The aim of the agreement was to lower tariff and other barriers to trade. President Obama never submitted the agreement to Congress for a vote because the votes were not there to secure approval. Both President Trump and Secretary of State Hillary Clinton voiced their opposition to the pact as written during the election campaign. President Trump said he would withdraw from the agreement altogether, and his executive order to that effect made good on that pledge.
The order was met with consternation in most of the agriculture community, which had been broadly supportive of the TPP, extolling its potential benefits for US agricultural exports. It was expected the Trump administration also may seek changes to the 22-year-old North American Free Trade Agreement (NAFTA) with Canada and Mexico. Indications were the Trump administration was seeking meetings with the leaders of those two nations.
Tracy Brunner, president of the National Cattlemen’s Beef Association (NCBA) warned that sparking a trade war with Canada, Mexico and Asia will “only lead to higher prices” for beef produced in the US.
“Fact is American cattle producers are already losing out on $400,000 in sales every day because we don’t have TPP, and since NAFTA was implemented, exports of American-produced beef to Mexico have grown by more than 750 percent,” Brunner said in a statement. “We’re especially concerned that the Administration is taking these actions without any meaningful alternatives in place that would compensate for the tremendous loss that cattle producers will face without TPP or NAFTA.”
Barry Carpenter, president and CEO of the North American Meat Institute (NAMI), also expressed concerns about what the withdrawal would mean for the meat industry.
“Trade is vital to the economic health of the US meat and poultry sector and the local American communities in which meat and poultry companies operate. An estimated 24 percent of US pork, 14 percent of US beef and 20 percent of broilers are exported,” he said in a statement.
“According to USDA, every $1 billion of US agricultural exports in 2015 required approximately 8,000 American jobs throughout the economy. Agricultural exports in 2015 required 1,067,000 full-time civilian jobs, which included 751,000 jobs in the nonfarm sector. US beef consumed in Japan can generate jobs and taxes that funds schools, roads and police and fire departments in towns like Garden City, Kansas, and Schuyler, Nebraska; lost trade opportunities abroad can mean lost jobs at home.
“Meat and poultry consumption in the US has levelled off, but export opportunities allow us to continue to grow our domestic industry.
“We value our trade relationships with Asia and we look forward to discussing paths to access these markets so we may expand our industry and ensure both job and economic growth at home,” Carpenter said.
“While President Trump signed an executive order today withdrawing our nation from the TPP, we viewed the TPP as a positive agreement for agriculture — one that would have added $4.4 billion annually to our struggling agriculture economy,” said Zippy Duvall, president of the American Farm Bureau Federation (AFBF). “With this decision, it is critical that the new administration begin work immediately to do all it can to develop new markets for US agricultural goods and to protect and advance US agricultural interests in the critical Asia-Pacific region.”
Duvall said the Farm Bureau will work with the new administration to help ensure that American agriculture can compete on a level playing field in markets around the world.
“But we need the administration’s commitment to ensuring we do not lose the ground gained — whether in the Asia-Pacific, North America, Europe or other parts of the world,” Duvall said.
“This is why we believe it is also important to re-emphasize the provisions of the NAFTA agreement with Canada and Mexico that have been beneficial for American agriculture,” Duvall continued. “US agricultural exports to Canada and Mexico have quadrupled from $8.9 billion in 1993 to over $38 billion today, due in large part to NAFTA.
“Any renegotiation of NAFTA must recognize the gains achieved by American agriculture and assure that US ag trade with Canada and Mexico remains strong. AFBF will work with the administration to remove remaining barriers that hamstring the ability of America’s farmers and ranchers to benefit from trading relationships with our important North American trading partners.”
Ron Moore, president of the American Soybean Association (ASA), urged the Trump administration to immediately announce how it intends to engage and expand market access in the Asia-Pacific region.
“Trade is something soybean farmers take very seriously,” Moore, a farmer from Roseville, Illinois, said. “We export more than half the soy we grow here in the United States, and still more in the form of meat and other products that are produced with our meal and oil. The TPP held great promise for us and has been a key priority for several years now. We're very disappointed to see the withdrawal today.”
Moore noted the TPP region represents 40 percent of the world's gross domestic product, and according to the Peterson Institute, the TPP would have increased overall US exports by $357 billion by 2030. Specifically for US farmers, the TPP would have increased annual net farm income by $4.4 billion, according to the AFBF. Additionally, the TPP was the first regional trade agreement to address the need to coordinate international policy on trade in the products of agricultural biotechnology, a benefit that the ASA will push to see in any future agreements with TPP partner nations.
“Moving forward, we expect to see a plan in place as soon as possible to engage the TPP partner nations and capture the value that we lose with the withdrawal today,” Moore said.
The US Meat Export Federation (USMEF) said the organization would remain committed to trading partners in the TPP and NAFTA, which account for more than 60 percent of US red meat exports. But USMEF urged the administration to develop a new plan for market access.
“In some of these key markets, the US red meat industry will remain at a serious competitive disadvantage unless meaningful market access gains are realized,” USMEF President and CEO Philip Seng said in a statement. “We urge the new administration to utilize all means available to return the United States to a competitive position, so that our industry can continue to serve this important international customer base and further expand our export opportunities.”