Asia trade pact crucially important to farm sector
May 26, 2015
Contentious debates over whether to grant a U.S. president trade promotion authority have been commonplace in past generations, so the current wrangling in regard to the Trans Pacific Partnership should not surprise anyone. The chronic inability of the Obama administration and the U.S. Congress to cooperate further heightened the likelihood of trouble for the T.P.P. Amidst all the noise emanating from opponents, agricultural trade issues have been almost entirely absent. Labor and environmental standards, currency manipulation, government-business dispute arbitration and rules of origin (governing how much of a product must originate from a T.P.P. country to qualify for duty-free treatment) are among the more prominent issues that have been raised.
Still, it is likely that no industry concerned with trade has more at stake in the T.P.P. talks than those associated with agriculture. As evident in a review of trade with China beginning on Page 28 of this magazine, exports of farm goods there have expanded dramatically in the past 20 years and appear poised for further major growth in the years ahead.
Propelled by China’s growth, Asia has become the dominant buyer of U.S. agricultural goods. Shipments to T.P.P. countries in 2013 were valued at $58.8 billion, or 85% of all farm exports. For all goods, the T.P.P. nations account for about half that share — 44%. While China’s prospects have been clouded by slower economic growth rates, a rally last week in shares there to a seven-year high underscore the importance of fast-track authority.