Beef Producers need a comprehensive TPP deal

Markets
Feb 14, 2014

While producers seem to be supporting a push for the Trans-Pacific Partnership (TPP) to be finalized, media outlets across the U.S. seem to be skipping the topic. It is far from an apparent “hot topic” in most areas, and skeptics are questioning the chances of it going anywhere with the discourse in the White House.

According to the Office of the United States Trade Representative (USTR), TPP is “the most significant trade negotiation in a generation.” As of 2012, the Trans-Pacific Partnership would join 12 member states along the Pacific Rim, representing nearly 800 million citizens, and 39 percent of global GDP.

According to an analysis supported by the Peterson Institute, a TPP agreement provides global income benefits of an estimated $223 billion per year, by 2025. Real income benefits to the United States are an estimated $77 billion per year.

The TPP could generate an estimated $305 billion in additional world exports per year, by 2025, including an additional $123.5 billion in U.S. exports.

Beef producers from the four largest beef producing TPP member countries continue to advocate that any TPP agreement must deliver on the 2011 TPP Ministers’ position of eliminating tariffs and other barriers to trade.

Beef producers of Australia, Canada, New Zealand and the United States, working in a coordinated partnership known as the Five Nations Beef Alliance (FNBA), issued a statement expressing concern at the possibility that some TPP members may seek to exclude some so-called “sensitive” products from comprehensive, dutyfree access.

Granting a TPP member any such exclusion would result in other members seeking similar treatment, leading to a decline in the agreement’s level of ambition and the resulting economic growth that it would bring.

The alliance also called for each TPP member to provide equal market access to all other TPP members, including during the transition period, in order to ensure that competitive disadvantages are not created and also to set clear expectations of the level of commitment required from any potential future TPP members.

The beef producers also noted the importance of adopting science-based regulations and incorporating trade facilitative rules of origin in the TPP.

While it all seems simple, each country seems to have its own way layers.

For starters, the United States needs to reauthorize the Trade Promotion Authority (TPA).

President Obama’s 2014 trade agenda took a slight setback last week when Ron Wyden (D-OR) put the brakes on the TPA.

According to reports, Wyden plans to discuss the matter further with members of the Senate before considering the TPA bill, which had been co-introduced last month by the former Senate Finance Committee Chairman Max Baucus (D-MT).

The lack of a TPA, which previously expired in 2007, could be perceived as trouble for the Administration’s plan of finalizing the TPP. Congress has the authority to regulate international trade, but the President has the authority to negotiate trade agreements with foreign governments.

TPA is a partnership between Congress and the President that facilitates development and approval of trade agreements. It ensures congressional input on trade negotiations and increases Congress’s power to shape and influence deals. Every president since Franklin Roosevelt has had trade negotiating authority.

The topic also has been dubbed an environmental disaster by extreme activists. Last fall, 24 of these groups, including the Sierra Club, the NRDC and the World Wildlife Fund, sent a letter to the TPP’s U.S. Trade Representative. The TPP, they claimed, could undercut national, state and local environmental laws.

And some of the other countries are also dealing with their own road blocks.

Last week a report noted some of the downsides to the TPP for New Zealand.

While the claimed benefits for New Zealand from the 12-country trade partnership have ranged between $5.5 billion a year by 2025 to $1billion or less, concern over higher priced medicine and lawsuits prevailed.

“We might pay more for medicines, we might be sued by tobacco companies for plain packaging,” New Zealand’s Labour leader David Cunliffe said.

“There may be benefits for New Zealand exporters in the agreement but without the release of the full text, we have no way of knowing their extent and nature,” he added, referring to the lack of information their government was releasing.

The FNBA comprises the Cattle Council of Australia, Canadian Cattlemen’s Association, Confederacion Nacional de Organizaciones Ganaderas, Beef Lamb New Zealand and the National Cattlemen’s Beef Association. Together, FNBA represents producers from countries that account for onethird of global beef production and approximately half of global beef exports. — Traci Eatherton, WLJ Editor

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