Commentary: Potentially important trade deal commands little notice
By Josh Rolph
Japan is one of three nations that has expressed interest in joining Trans-Pacific Partnership trade discussions. Its entry could benefit California farmers—but could also delay the agreement’s ambitious schedule.
The last two decades have been marked by a flurry of activity in global trade. Markets have opened for California producers and created promising and beneficial trading relationships. California agricultural exports are expanding and buoying up the state's otherwise struggling economy.
There is no doubt agricultural trade has played an important role in the economy. During the last 10 years, for example, U.S. farm exports have more than doubled—even growing by leaps and bounds during the recession. This holds true for California, where agricultural exports continue to be a bright spot in the state's economy.
The U.S. has engaged in multiple trade agreements during the last two decades that have resulted in new foreign partners and markets for California's agricultural production. Recent deals between the U.S. and Panama, Colombia and Korea have demonstrated our nation's commitment to this cause. President Obama's National Export Initiative, announced in his State of the Union address in 2010, aims to double exports by the end of 2014.
Market access is the only way to reach that goal.
In almost every case, trade agreements prove contentious, and we at Farm Bureau have attempted to influence negotiations by representing the interests of each of our commodities. As our policy states, "we believe that trade must be based on principles of fairness." At times, however, there are trade agreements that seem to fly under the radar of most groups because they are less controversial. That may well apply to a potential agreement that, if anything, is getting almost no attention at all: the Trans-Pacific Partnership agreement.
In November 2009, the president announced the intention of the U.S. to participate in TPP negotiations with Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. After a kickoff in the summer of 2010, negotiations among the nine nations have followed an ambitious schedule. The 12th round of talks will take place in Dallas in May.
Observers call the TPP a "next-generation" agreement that, according to the administration, "reflects U.S. priorities and values." Some of the broad standards of the agreement include zero tariffs across the board, elimination of non-tariff barriers and significantly improved cooperation among regulatory bodies.
The administration has closely consulted with stakeholders around the country, including the California Farm Bureau Federation, to ensure TPP addresses the issues that American businesses and workers face today and may confront in the future.
The nine nations are optimistic that the TPP agreement can be completed this year. However, the finalization of the agreement is partially in doubt because of other nations' interest in joining the pact. Canada, Japan and Mexico formally shared their intent last November to consider being added to the TPP. Even though our trading relationships aren't perfect with these three longtime trading partners, we still welcome them to the table—although the addition of any of them could easily push back a target date for completing the agreement.
California farmers and ranchers would benefit from the addition of Japan, which is already a strong trading partner for many of our commodities. The inclusion of Japan would be an opportunity to address longstanding disputes on U.S. beef and sorely needed harmonization of maximum residue limits, or MRLs. Our relationship with Canada could also benefit from improved MRL harmonization as well as streamlining other trade barriers we've faced. Because of looming issues with those two nations, some believe Mexico is best prepared to enter the TPP.
Currently, the nine countries are deciding whether the three prospective members are able to meet the standards being set and whether countries can be brought into the ongoing talks without slowing down the process. The disagreement falls between either allowing them to join now or waiting for a completed deal among the existing nine.
Our feeling at Farm Bureau is that if other nations are allowed to join the talks, the ambitious schedule should still continue. We applaud the U.S. for keeping up the momentum. Since talks began, the target date for completion hasn't budged.
We've learned over the years that trade talks can slow down and drag on without accomplishment. The now decade-old World Trade Organization Doha Development Agenda is a perfect example. It is clear that TPP members want to avoid that example. And we don't want to follow the same path the U.S. took with South Korea, when rice was excluded from the talks. It is dangerous for us to exclude products and it sets a bad precedent that if it is too hard or painful for one commodity, the agreement should be abandoned for everyone else.
State Department official Robert Hormats testified before a Senate Finance subcommittee last week that the TPP would be a "game changer." The agreement, he said, could set a new standard as a model for future trade agreements. We hope he's right.
(Josh Rolph is director of international trade, farm policy, taxation and plant health for the California Farm Bureau Federation. He may be contacted at firstname.lastname@example.org.)
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