Photo by Darrell Hoemann/Midwest Center for Investigative Reporting
Cows are lined up to eat hay at a University of Illinois at Urbana-Champaign farm facility on Nov. 5, 2015. Under current trade policy, some of the Trans-Pacific Partnership members impose strict trade taxes on dairy, beef and other farm products.
In one of his first major acts as president, Donald Trump signed an executive order Monday pulling the United States out of the Trans-Pacific Partnership – a move that the agriculture industry says will cost them more than $4.4 billion in revenue each year.
The 12-country free trade agreement negotiated by the Obama administration in 2015 joined Pacific Rim countries like the U.S., Japan, Mexico and Singapore.
For farmers, the agreement would likely have meant more consistent trade and higher annual revenues, a 2015 story by the Midwest Center for Investigative Reporting found.
But Trump and many Democrats, including former presidential candidates Bernie Sanders and Hillary Clinton, opposed the deal because of fears that it would hurt workers.
“I am glad the Trans-Pacific Partnership is dead and gone. For the last 30 years, we have had a series of trade deals – including the North American Free Trade Agreement, permanent normal trade relations with China and others – which have cost us millions of decent-paying jobs and caused a ‘race to the bottom’ which has lowered wages for American workers,” Sanders said in a release on Monday. “Now is the time to develop a new trade policy that helps working families, not just multi-national corporations. If President Trump is serious about a new policy to help American workers then I would be delighted to work with him.”
However, many top Republicans, including Arizona Senator John McCain, criticized the move on Monday.
“This decision will forfeit the opportunity to promote American exports, reduce trade barriers, open new markets, and protect American invention and innovation,” McCain said in a statement. “It will create an opening for China to rewrite the economic rules of the road at the expense of American workers. And it will send a troubling signal of American disengagement in the Asia-Pacific region at a time we can least afford it.”
Trump also is rumored to be considering pulling out of NAFTA, the free trade partnership with Mexico and Canada negotiated by Bill Clinton.
Agriculture industry officials responded Monday, criticizing Trump’s withdrawal from TPP and calling for no change to NAFTA.
From the American Farm Bureau Association:
“U.S. agriculture creates jobs and supports economic growth in rural America, and American agriculture depends on maintaining and increasing access to markets outside the United States. Trade is vital to the success of our nation’s farmers and ranchers. More than 25 percent of all U.S. ag production ultimately goes to markets outside our borders.
“While President Trump signed an executive order today withdrawing our nation from the Trans- Pacific Partnership, we viewed TPP as a positive agreement for agriculture – one that would have added $4.4 billion annually to our struggling agriculture economy. With this decision, it is critical that the new administration begin work immediately to do all it can to develop new markets for U.S. agricultural goods and to protect and advance U.S. agricultural interests in the critical Asia-Pacific region.
“American agriculture is virtually always a winner when trade agreements remove barriers to U.S. crop and livestock exports because we impose very few compared to other nations. We have much to gain through strong trade agreements. AFBF pledges to work with the administration to help ensure that American agriculture can compete on a level playing field in markets around the world. But we need the administration’s commitment to ensuring we do not lose the ground gained — whether in the Asia-Pacific, North America, Europe or other parts of the world.
“This is why we believe it is also important to re-emphasize the provisions of the North American Free Trade Agreement with Canada and Mexico that have been beneficial for American agriculture. U.S. agricultural exports to Canada and Mexico have quadrupled from $8.9 billion in 1993 to over $38 billion today, due in large part to NAFTA. Any renegotiation of NAFTA must recognize the gains achieved by American agriculture and assure that U.S. ag trade with Canada and Mexico remains strong. AFBF will work with the administration to remove remaining barriers that hamstring the ability of America’s farmers and ranchers to benefit from trading relationships with our important North American trading partners.”
From the National Cattlemen’s Beef Association:
“TPP and NAFTA have long been convenient political punching bags, but the reality is that foreign trade has been one of the greatest success stories in the long history of the U.S. beef industry.
“Fact is American cattle producers are already losing out on $400,000 in sales every day because we don’t have TPP, and since NAFTA was implemented, exports of American-produced beef to Mexico have grown by more than 750 percent. We’re especially concerned that the Administration is taking these actions without any meaningful alternatives in place that would compensate for the tremendous loss that cattle producers will face without TPP or NAFTA.
“Sparking a trade war with Canada, Mexico, and Asia will only lead to higher prices for American-produced beef in those markets and put our American producers at a much steeper competitive disadvantage. The fact remains that 96 percent of the world’s consumers live outside the United States, and expanding access to those consumers is the single best thing we can do to help American cattle-producing families be more successful.”
From the American Soybean Association:
The nation’s soybean farmers expressed significant concern Monday, following an executive order from President Donald Trump that withdraws the United States from the 12-nation Trans-Pacific Partnership (TPP). American Soybean Association (ASA) President Ron Moore pointed out the high stakes for soybean farmers, and urged the Trump Administration to immediately announce how it intends to engage and expand market access in the Asia-Pacific region.
“Trade is something soybean farmers take very seriously. We export more than half the soy we grow here in the United States, and still more in the form of meat and other products that are produced with our meal and oil,” said Moore, who farms in Roseville, Ill. “The TPP held great promise for us, and has been a key priority for several years now. We’re very disappointed to see the withdrawal today.”
Soybeans are the nation’s largest agricultural export, and markets in Southeast Asia and Latin America continue to grow in their potential as buyers of U.S. soy. The biggest beneficiary from TPP, however, was the American livestock industry–in the form of increased meat and dairy exports–which represents the largest domestic market for soybean meal.
The TPP represents 40 percent of the world’s gross domestic product (GDP), and according to the Peterson Institute, would have increased overall U.S. exports by $357 billion by 2030. Specifically for U.S. farmers, TPP would have increased annual net farm income by $4.4 billion according to the American Farm Bureau Federation. Additionally, TPP was the first regional trade agreement to address the need to coordinate international policy on trade in the products of agricultural biotechnology, a benefit that ASA will push to see in any future agreements with TPP partner nations.
“Moving forward, we expect to see a plan in place as soon as possible to engage the TPP partner nations and capture the value that we lose with the withdrawal today. With net farm income down by over 40 percent from levels just a few years ago, we need trade deals with the Asia-Pacific countries to make up for the $4.4 billion in annual net farm income being lost by farmers from not moving forward with the TPP. Also, we expect a seat at the table to help ensure these agreements in whatever form they take are crafted to capture their full value for soybean farmers,” added Moore. “Trade is too important for us to support anything less.”
