While most agricultural groups and the Obama administration are touting the potential benefits of the Trans-Pacific Partnership trade agreement, top ag Democrats in Congress remain skeptical about the pact.
[Chris Clayton| April 27, 2016 |The Progressive Farmer]
Rep. Collin Peterson, D-Minn., ranking member of the House Agriculture Committee, said TPP would fail if President Barack Obama brought the Pacific trade deal to Congress right now and would probably fail in a lame-duck session of Congress as well. Democrats doubt free-trade deals while Republicans doubt Obama
"You have got a bunch of Republicans that are against it because it's Obama's deal," Peterson said. "So that's there. Does that change after the election? I don't know."
At the same time, Peterson doesn't think the deal is as good for agriculture as administration officials and some ag groups make it out to be.
"This is not a free-trade agreement in terms of agriculture," Peterson said. "This is a managed-trade agreement."
Considered the largest trade deal ever for the U.S., the Trans-Pacific Partnership includes the U.S., Australia, Brunei, Canada, Chili, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
By and large, farmers and farm groups support free-trade agreements. The National Farmers Union continues to campaign against it. NFU has a press conference set for Wednesday specifically to criticize the trade pact.
While some commodities are getting increased access in different countries, the trade pact still maintains some continuing tariffs and tight quotas on potential exports to some key markets, Peterson said
"This is not some kind of a deal where we are going to have no tariffs with these countries in 10 years," Peterson said. "So I don't see this as a free-trade agreement."
Peterson said some farm groups in areas such as dairy and sugar are supporting the deal under the premise that it could have been worse. He especially criticized the trade agreement for letting Canada maintain its supply management programs for dairy and poultry.
"I don't think this is a great win for trade. What sticks in my craw the most is we are letting Canada off the hook," Peterson said. "We can't sell dairy products to Canada. They can sell dairy products to us. They have got a supply management system."
Sen. Debbie Stabenow, D-Mich., spoke briefly on the trade deal. She said the prognosis for TPP is unclear right now. Stabenow said she "has great concerns" about the trade deal because she sees problems with currency manipulation, which has been a significant complaint by critics of the deal.
"I just don't see us voting for it before the lame duck," Stabenow said. "It just sounds like that's the way it's going and it's a close call."
Even if the trade deal isn't brought up in Congress until after the November elections, the Obama administration still has deadlines to meet even before that could happen. Under the trade promotion authority approved by Congress last year, the president has to send to Congress rules on how the executive branch would enforce the deal. That has to be done 30 days before the president officially sends the trade agreement to Congress. After that, Congress has up to 45 working days to move the bill to floors of the respective chambers for votes. So to get a vote on the trade pact before the end of the year, the president is going to have to move the bill to Congress much earlier.
Darci Vetter, chief agricultural negotiator for the U.S. Trade Representative's Office, told reporters Monday that TPP "is an incredibly important deal for agriculture" in a region where U.S. goods often face high tariffs and other barriers.
"We're hopeful and we think Congress needs to approve this trade agreement this year," Vetter said.
The U.S. already is losing some market share to Australia in Japan because those two countries cut a separate trade agreement to reduce Japanese tariffs for products such as Australian beef.
Vetter rattled off several provisions in TPP that would help U.S. farmers and agribusinesses. The deal has provisions that prevent countries from using product designations known as geographical indicators as barriers to allowing imports. Some countries claim a product can only carry a particular name if it comes from a certain region. Vetter said those geographical indicators are limited in the trade pact. Further, the trade deal also has specific language protecting the ability to use biotechnology.
"TPP has first-ever provisions on biotech -- a biotech annex for those countries -- that would look specifically at ensuring countries take a scientific approach to their approval system and they operate it in a scientific, transparent and predictable way," Vetter said.
Vetter also noted China is working on an alternative trade deal with at least some of the same Asian countries in TPP.
Vetter also added that a quality trade deal for agriculture should be viewed as part of the farm safety net because 20% of all farm income comes from U.S. agricultural exports.
Regarding currency manipulation, typically countries can boost exports by lowering the value of their currency. Addressing that issue, Vetter said the 12 countries taking part in TPP have signed a separate agreement to reduce the likelihood of currency manipulation.
Vetter was asked about the political dynamics of the trade deal considering the leading presidential candidates from both parties oppose the deal, as do members of Congress from both parties. Still, Vetter said trade deals must continue to be negotiated and deals reached and she also believes that free trade continues to have strong bipartisan support despite the campaign rhetoric.
"It is, perhaps, the boogeyman of this campaign, but actually withdrawing from the global economy is not an option," Vetter said. "We wouldn't even want to, so we need to figure out how to engage."
Former Agriculture Secretary Dan Glickman told reporters on a conference call Monday that political leaders are going to have to convince increasingly skeptical Americans that there are job opportunities in trade deals that haven't been borne out in areas such as manufacturing.
"We're going to have to figure out a better way, a political way, to sell trade agreements," Glickman said. "And we're going to have to work with other sectors of the economy."
Coming back from a recent trip to China, Glickman said he was surprised by the investment made in various infrastructure just in the Chinese cities he saw. He also saw a great deal of manufacturing facilities and cargo containers lined up for export. That made him reflect on some of the resistance Americans have to trade deals as manufacturing jobs have shifted heavily to China.
Given the need for upgrades in roads, bridges, sewers and water infrastructure such as ports, Glickman said he believes trade deals need to be tied to increased resources to rebuild the country.
"We could produce millions of jobs and make people believe again the country is competitive," Glickman said. "It would be much easier to sell trade agreements if they believed there's good news at home."
The problem with trade agreements, Glickman said, is that they are in the long-term best interest of the U.S., but in the short term, those agreements often lead to job losses in manufacturing. Selling infrastructure jobs is one way to counterbalance such losses.
"I think it's a huge problem in this country," Glickman said. "We're just going to have to do something if we want to be competitive in the world."
Regarding the Trans-Pacific Partnership itself, Glickman said it's a critical deal for the strategic interests of the U.S.
"If the U.S. doesn't pass TPP, I think it would look bad for us. The U.S. can't disengage from the world," Glickman said.