DES MOINES, Iowa – American agriculture stands to gain significantly from the ongoing multi-lateral Trans-Pacific Partnership trade deal. The United States, Japan, and ten other Pacific Rim nations, which together represent a third of global trade, are attempting to eliminate tariffs between their countries.
Just last year, 41 percent of a record $140.9 billion in American ag exports were bound for the Asia-Pacific region. With export tariffs off the table under the TPP deal, that figure could be a lot higher in subsequent years.
But there’s one major agricultural holdup before a deal can be finalized: Japan believes some of its ag products, like beef and pork, are “sensitive” to competition with foreign exports, and should be exempt from the talks. In Japan, the average ag tariff is about 40 percent, while U.S. ag tariffs average around 12 percent.
At a stop at the Iowa State Fair to discuss the role of exports in President Obama’s trade agenda, U.S. Trade Representative Michael Froman said progress on the issue won’t happen overnight.
“We’ve reached agreement that all product areas will be covered,” said Froman. “There’ll be no exclusions, and that’s an important step. Now we’re going literally product by product, line by line to figure out how we can achieve meaningful market access for all of our products.”
Before Japan joined the talks early last year, Japanese Prime Minister Shinzo Abe confirmed with President Obama that an agreement to eliminate all tariffs on all products was not a precondition for a seat the negotiating table.
Iowa Senator Chuck Grassley was also discussing trade deals at the Iowa State Fair, and said Japan’s insistence that some products be considered sensitive runs counter to the goals of the TPP.
“For a long period of time there were 5 sensitive products that would not be on the table,” Grassley said, “and so I was very resentful of listening to the plea of Japan to come into the agreement, and then not keeping their word. Now there’s been some movement in that area… and let’s hope out of that comes progress.”
But the deal doesn’t just cover agriculture, nor does it stick only to traditional trade matters, and it’s come under fire for perceived secrecy since the U.S. joined the negotiating table in 2008.
Online activist group Wikileaks has leaked some of the deal’s draft text, and Senators Ron Wyden and Elizabeth Warren have attempted to increases transparency in the Office of the Trade Representative. Froman says the perceived lack of transparency on the deal is something his office takes very seriously.
“We’ve had more than 1350 briefings on Capitol Hill on TPP alone,” Froman said, “not even including T-TIP or anything else on our trade agenda. We’re meeting with individual members; with groups of members; with committees; with their staff. All members of Congress can see the text, and we walk them through, a number of them, through the text to explain and answer any questions that they have. So we’re trying with Congress to make sure that as the people’s representatives, that they have full visibility and input into what we’re doing.”
Froman elaborated that about 700 stakeholder-advisors from industry groups, NGOs and labor unions are involved in reviewing proposals, and while he conceded that there is more his office can do to increase transparency, he stated his belief that the TPP has had the most transparent process of any trade agreement to date.
Grassley agreed with Froman that the process had been transparent.
“Negotiation takes some confidence that you aren’t going to tell the world what you’re doing, and that you aren’t going to tell the world what your negotiating position is,” explained Grassley. “You’ve got to have sympathy for that, and I think that the way he has briefed members of Congress from time to time that there’s transparency. Now, maybe that doesn’t satisfy some of the consumer groups or some of the producers, and I think just as he told you, they spent a great deal of time bringing them up to date.”
The final hurdle for the deal will be whether or not Congress grants the President trade promotion authority (TPA), which lets the executive branch establish negotiating objectives and broker trade deals which Congress can then pass or reject, but not amend or filibuster. It gives negotiating partners confidence that the agreed-upon trade deal will survive a Congressional gauntlet to arrive at the president’s desk.
Called the Bipartisan Congressional Trade Priorities Act of 2014, Grassley said the bill that would grant the president TPA has been in committee since January of this year. He said the ball is now in Senate Majority Leader Harry Reid’s court, “but it won’t be up in the next month of September, so I think it’s post-election.”
Froman said trading partners are also wondering what the future holds.
“Well, they all ask where we are in our process,” Froman said, “and every time we get together, I spend the first hour or hour and a half with our trading partners walking them through our politics; walking them through the process. But I also make clear, and the president said this back in Feburary: the only guarantee that a trade agreement get through Congress is that we bring back a good agreement. And, if we bring back a good agreement, the votes will be there. And, if we don’t bring back a good agreement, then it’s all sort of moot. That’s where our focus is; it’s on making sure, through our negotiations, we’re bringing back an ambitious, high-standard, comprehensive agreement.”
An ambitious, high-standard, comprehensive agreement may satisfy Congress, but Grassley was not so sure trading partners would be as understanding.
“I think that, in order to get other countries to sign on, they’re going to have to know that Congress will not move the goalposts, and could possibly change the agreement,” said Grassley. “TPA guarantees that, and I think that’s pretty important to our negotiating partners.”
