Trade truth vs. the campaign hype

California-Farm-BureauBy California Farm Bureau,

It’s refreshing when opposing political candidates can agree on an issue—but in the case of the Trans-Pacific Partnership, the two leading presidential candidates’ opposition to the trade agreement falls on the wrong side for agriculture.

In Ag Alert® four years ago, I wrote about how the TPP was proving to be “less controversial” than previous trade agreements and was “getting almost no attention at all.”

Fast forward to last month’s political conventions, where the TPP got a lot of attention—and negative attention at that.

“No TPP!” signs showed up on millions of TV screens during the Democratic National Convention, where Sen. Bernie Sanders emphatically stated, to thunderous applause, that the party’s platform now opposes the TPP, and that he would do all in his power to keep the agreement from getting a vote during the lame-duck session of Congress.

And Democratic presidential candidate Hillary Clinton has opposed the trade deal, although some sources have claimed she would support it, given her past role in TPP negotiations as secretary of state. The only glimmer of hope that she might change her mind came when she indicated in her convention speech that she would “say ‘no’ to unfair trade deals,” though she didn’t explicitly name which ones.

The week prior, Republican nominee Donald Trump said the TPP would “make America subject to the rulings of foreign governments.” He then pledged his opposition to multilateral trade deals altogether. The typically supportive-of-trade-deals Republican platform even removed all references to the TPP.

As I heard the remarks emanating from both conventions, I recalled the 2008 campaign season, when both parties’ presidential nominees shared similar protectionist messages about pending bilateral free-trade agreements between the U.S. and Korea, Colombia and Panama—all of which were later ratified in President Obama’s first term.

Similarly, just last year, the major trade vote to extend trade promotion authority to the president was declared dead numerous times—before it ultimately passed.

The key point is: The TPP is far from dead.

The California Farm Bureau Federation has urged Congress to ratify the agreement this year, and this year seems to be our best hope for passage.

California stands to gain from full ratification of the TPP. The agreement among 12 Pacific Rim nations includes some of our largest export destinations—such as Canada, Japan and Mexico—as well as growing markets such as Vietnam and Malaysia.

Farm Bureau supports the agreement because it’s good for farmers, ranchers and agricultural businesses. The TPP would immediately grant more access to foreign markets for U.S. farmers and ranchers, opening the door to 480 million customers in the Asia-Pacific region.

Japan, Vietnam and Malaysia are valuable markets with which the U.S. does not currently have a free-trade deal. At the same time, many TPP countries already have deals with one another—and there is the constant threat of large nations such as China and India taking over our market access. This reason alone makes immediate ratification of the TPP all the more pressing.

More market access invariably translates into more agricultural-related jobs. Agricultural exports already support more than 178,000 California jobs. That number would only grow under a fully implemented TPP.

CFBF President Paul Wenger has said that trade benefits not only the farm economy, but many others in the business chain. His personal illustration puts it best:

“Once harvested, our crops are placed on a truck owned by an American company that hires a local driver and purchases fuel from a local business,” he said. “That shipment then goes to a processing facility where local workers wash, sort, package and ready our crops for sale. A local sales force then markets our goods around the world. Ultimately, our crop reaches a port where U.S. dockworkers load my products onto a ship, ready for delivery to a foreign port.”

Trade is important for almost every crop grown in California; top California agricultural exports include fruits and nuts, vegetables, dairy products and cotton. Each stands to gain from the TPP.

For example, Vietnam now charges a 23 percent tariff on tree nuts. Under the TPP, tree nuts would see the elimination of tariffs in Vietnam, plus Japan and Malaysia, resulting in greater demand.

Current tariffs on wine run as high as 50 percent in Vietnam and 22.5 percent in Japan. With these tariffs dropping under the TPP, there would be significant openings for U.S. wines to compete with European suppliers.

Citrus tariffs would be eliminated in Japan, Malaysia and Vietnam, and Japan would eliminate its tariff of 38.5 percent on beef, which would allow our beef cattle business to export to that large market.

Elimination of tariffs on produce such as grapes, melons, apples and pears would expand trade opportunities in Vietnam and Malaysia.

Given those and other benefits to our state, the California congressional delegation should support the TPP this year as negotiated, and Congress should act before we have a president who either negates the deal or delays it several more years.

The TPP is good for agriculture, it’s good for our economy, and if we don’t do it now, we may lose market access when other countries move in to seize the opportunity we have missed.

(Josh Rolph is manager of federal policy for the California Farm Bureau Federation. He may be contacted at [email protected].)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.

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