By former USDA Secretary John R. Block
Agriculture is an industry that depends heavily on exports with some 30% of our production sold to other countries. That explains the reason why the Ag industry has so much interest in the Trans-Pacific Partnership (TPP) trade agreement that has been negotiated with 12 nations representing 40% of the world’s gross domestic product. Farm organizations and Ag businesses are trying to convince the Congress to approve the deal.
Keep in mind that although the TPP has been negotiated, it still must be approved by the Congress and signed by the President.
The U.S. International Trade Commission (ITC) has analyzed the agreement and, guess what? Agriculture is the big winner.
U.S. Trade Ambassador Michael Froman argues that “The ITC report provides another strong argument why TPP should be passed this year.” With implementation, Ag exports would rise $7.2 billion.
At first, our dairy industry wasn’t so sure they liked the agreement, but the report predicts an 18% increase in dairy exports. Our beef industry doesn’t have anything to beef about, with an 8.4% export boost. Pork and poultry come out ahead with rice and wheat losing a little. I don’t think there is any question that, on balance, the TPP would be very positive for our industry. However, when the ITC evaluated how the TPP would affect other U.S. industries beyond agriculture, the trade advantage is modest.
Another big reason to approve the agreement besides exports and job creation is that we don’t want to be left out of big trade deals. China is already negotiating free trade with Asian countries.
Although there is reason to approve TPP, the political climate is not good. Some argue that trade deals cost jobs – they don’t create jobs. Donald Trump, although he supports trade, says that TPP is a “disaster.” Hillary Clinton says she does not support TPP now and, if elected President, won’t support it then.
The chance of our Congress voting on the agreement before the November election is almost zero. They don’t want to take a stand on anything. After the election – maybe, but I’m not optimistic. Stay tuned.
John Block was Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill. If you would like to review his radio shows going back more than 20 years, visit johnblockreports.com.