TPP Will Not Meet Inflated Promises, Cautions NFU

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WASHINGTON (January 13, 2016) – Like numerous trade deals that came before it, the Trans-Pacific Partnership (TPP) will fail to deliver promised job, economic and trade growth, according to the nation’s second biggest agricultural organization.

[National Farmers Union| January, 8 2016 |NFU.Org]

National Farmers Union (NFU) President Roger Johnson testified before the U.S. International Trade Commission (ITC) today and warned that TPP will ultimately disappoint rural America because it is modeled after the failed agreements of the past. 

“Unfortunately for this nation, when it comes to these enormous trade deals, the list of promises is quite long but the list of actual deliverables is often very short,” he said. “Instead of helping curb the U.S. trade deficit, agreements like the TPP are actually making it worse.”

The U.S. trade deficit soared to $508 billion in 2014, up six percent from the previous year, despite trade deals with 20 countries.

“Collectively, these massive trade deals have done immense damage to the economy, draining economic growth and jobs from American families,” he explained. “That is why the primary goal of these trade pacts should be to achieve an overall balance of trade, and on that standard, these deals are failing.”

Johnson also testified that TPP and previous trade deals fall woefully short on enforcement tools to prevent foreign governments from cheating the system to give their businesses unfair competitive advantages. He singled out currency manipulation as proof.

Several TPP countries are well-known currency manipulators, he warned, including Vietnam, Malaysia, Singapore and Japan. Most recently, just last August, Vietnam devalued its currency for the third time in one year, making its exports much more attractive on the world market.

“Without measures to enforce restrictions on currency manipulation, free trade agreements aren’t worth the paper they’re written on,” said Johnson.

The tariff reductions and additional market access that Japan – a top buyer of U.S., agriculture goods – has granted through TPP is a positive step for U.S. agricultural exporters, but Johnson noted that it must be measured in the context of the entire multilateral agreement. 

When the agreement is signed, famers in Canada, Australia, New Zealand, and Mexico will all compete with U.S. agriculture in the Japanese market. And to achieve the deal, America opened itself up to more imports at home.

“While modest increases in agriculture export opportunities may occur with trade agreements, they can be severely overshadowed by the resulting massive increases of imports of agricultural and other products,” said Johnson. “This is very likely the case with TPP, and underscores why we are opposed to the TPP.”

A copy of Johnson’s testimony can be found here.

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