WASHINGTON, D.C. — The United States may need to consider bilateral trade agreements with countries still in the Transpacific Partnership (TPP), in light of America’s withdrawal from the pact, according to a National Cattlemen’s Beef Assoc. (NCBA) official.

 

In January, President Donald Trump kept a campaign promise by removing the U.S. from the trade agreement. The 11 remaining countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – have vowed to move forward with the TPP. The agreement was originally negotiated with the goal of reducing tariffs and improving economic ties among the member nations.

Including the United States, the TPP countries represent approximately 800 million people and about 40 percent of worldwide gross domestic product.

The withdrawal of the U.S. from the pact and a lack of bilateral agreements with TPP countries could have a negative impact on American beef producers, said Kent Bacus, director of legislative affairs for NCBA. U.S. beef exports have posted gains this year, due in part to a drought in Australia that caused a herd shortage.

“Australia is now recovering from the drought and there’s a chance they could be competitive again as early as the first quarter of next year,” he explained. “They would have a supply and tariff advantage over us.

“TPP would have leveled the playing field. If we’re not a part of TPP and if there are no bilateral agreements waiting in the wings, it will be very tough for us to compete with the Australians.”

It may not be easy to achieve bilateral agreements even if the United States opts to pursue them, Bacus said. The amount of time it could take to negotiate such pacts may hurt U.S. agriculture, he noted, adding it took “five long years” to negotiate the TPP. He questioned whether TPP members would want to enter into bilateral agreements, noting the other countries don’t seem interested in doing so. “Not only have we walked away from really good terms, but we’ve lost leverage,” he said.

The United States will probably push for bilateral trade agreements with some TPP countries including, most notably, Japan, said Barbara Patterson, government relations director for the National Farmers Union (NFU).

“My expectation is there will be a preference for bilateral or trilateral agreements,” she said. “I don’t see the United States returning to the TPP. Trump campaigned pretty hard on (withdrawing) and it didn’t seem as if there was support in Congress to move it forward, anyway.” The NFU is opposed to the free trade agreement model found in the TPP and in the North American Free Trade Agreement, or NAFTA, Patterson added.

“The goal does not seem to be better farm income for farmers,” she said. “It’s about increased trade, whether imports or exports. We worry about the impacts on the overall trade deficit. There’s also a major piece missing, and that’s currency manipulation. Currency is a critical part of trade agreements.”

The question of whether U.S. farmers would lose market share without the TPP isn’t completely conclusive, Patterson said. “Beef was critical in this agreement. Even under the best estimate, it was still predicted we’d run a trade deficit with beef.”

The nation’s withdrawal from the TPP creates concerns over whether the move puts U.S. farmers at a disadvantage, said Tom Sleight, president and CEO of the U.S. Grains Council. “For the U.S. corn sector, the withdrawal hurts the sale of value-added products into Japan,” he said. “For U.S. coarse grains, there’s a lot of growth there pegged to Vietnam.”

The remaining TPP countries are in the process of negotiating a final agreement, Sleight said. “Japan very much wants the TPP to move forward and would like to see the United States return. I think you’ll hear a lot of talk about us returning, but I don’t have much optimism. Trump is certainly a realist and a business realist. The door is not totally closed. It matters because of the 11 other countries; they joined because we were a part of it.”

In May, representatives of the 11 TPP nations issued a statement saying they would like to see an agreement reached among the remaining members by November. The officials didn’t rule out inviting other countries to join the pact. “These efforts would address our concerns about protectionism, contribute to maintaining open markets, strengthening the rules-based international trading system, increasing world trade and raising living standards,” the statement read.

By leaving the TPP, the United States is sending a bad message to Japan, the world’s biggest export market for beef, Bacus said. Japan, Vietnam and Malaysia are three of the more important nations to the U.S. in terms of trade still committed to the TPP.

“I hope trade is a top priority for the Trump administration,” he said. “We need true leadership when it comes to trade. It’s time to hold (Congress and the President) accountable. I hope (Trump) would listen to the wisdom of his advisors. We can’t afford to just walk away from this.”