Trump's TPP dump disappoints US feed sector

By Aerin Einstein-Curtis

- Last updated on GMT

© iStock/wildpixel
© iStock/wildpixel

Related tags Feed industry Trade International trade

Trump's decision to extract the US from the TPP has angered feed and grain groups in the US who point to their industries need for international trade.

The American Feed Industry Association (AFIA) and American Soybean Association (ASA) spoke out against the decision of the new US administration the withdraw from the Trans-Pacific Partnership (TPP) on Monday.

The AFIA said it was “extremely disappointed."

“TPP, and agreements like it, are key to setting the terms and rules for future trade relationships, creating higher standards and expectations than previous trade deals,”​ said Joel Newman, AFIA president. “While the US economy generally deals with a trade deficit, agriculture is the one segment where our country enjoys a strong trade surplus.”

The ASA expressed concern about the decision and asked the Trump team to outline how they plan to engage with the Asian Pacific region now and expand US grain exports in those markets.

“The TPP held great promise for us, and has been a key priority for several years now,” ​said Ron Moore, ASA president. “We're very disappointed to see the withdrawal today.”

Interestingly, most Democrats in Congress had opposed the TPP, putting them at odds with the Obama administration. During the recent US election campaign, Democratic presidential nominee, Hillary Clinton, came out against the trade deal, saying it would only benefit big corporations and not US workers.

TPP overview

The proposed trade agreement involved the US along with Australia, Canada, Japan, Malaysia, Mexico, Peru, Vietnam, Chile, Brunei, Singapore and New Zealand.

Provisions included the reduction of several tariffs on agricultural product either upon passage, or with specified timelines, according to the office of the US Trade Representative (USTR).  

Additionally, the TPP sought to eliminate all agricultural export subsidies; develop export credits, credit guarantees and insurance programs, and to limit export restrictions on food stuffs as a way to protect domestic markets, the office reported.  

Trade priority

The ASA, along with a group of feed crop grower organizations had previously stressed, in a public letter​ to the Trump administration, the importance of international trade.

“ASA and other farmer organizations are taking a proactive role to begin working with the Trump staff to ensure they have the best information on the importance of trade to rural American and US farmers,” ​Moore told us at that time. “We felt it necessary to communicate our priorities on trade and offer any support and assistance we can as the new administration takes office.”

Our goal is to be a resource to the Trump team regarding input and advise on modernizing and solidifying relationships with trading partners in North America and the Asia Pacific region, among others,”​ he said. “We would hope that any action the incoming administration takes regarding international trade take into consideration the deep importance of exports to US agriculture and jobs.”

Lost opportunity

Trade agreements like the TPP offer US feed producers a chance to access international demand for agricultural products, like that for commercial feed, said the AFIA.

The Asia-Pacific region has been an area with an increasing interest in US products, but competition and regional trade agreements that limit US participation, hinder the US feed industry’s ability to support that interest, said the association. “TPP was intended to assist the US in setting a global trade agenda, addressing international competition and combating continued market share losses in the region,”​ added Newman

“Without TPP, the US feed industry will lose more than the opportunities provided by tariff reductions,” ​said Newman. “We will lose the opportunity to facilitate new trade relationships by addressing larger sanitary and phytosanitary issues, environmental protections, domestic job creation and regulatory cooperation.”

Looking forward, the association is hoping to see portions of TPP that were positive for the US feed industry remain, he said. “As President Trump further assesses US trade relations in the Pacific Rim and any potential trade agreements going forward, we hope components of TPP beneficial to our industry will be preserved,”​ he added.

TPP was the first regional trade agreement to address a coordinated international policy on trade in the products of agricultural biotechnology, said the ASA. The group is planning to continue to push for that in any future agreements with members of the countries involved with TPP.

“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,” ​said Moore. “With net farm income down by over 40% from levels just a few years ago, we need trade deals with the Asia-Pacific countries to make up for the $4.4bn in annual net farm income being lost by farmers from not moving forward with the TPP.” 

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