thumbnail

Representatives from the 12 Trans-Pacific Partnership (TPP) negotiating countries are set to sign the agreement in New Zealand next week. Though signing the pact is primarily ceremonial, it marks another step forward in the long process of putting the world’s largest free trade agreement into action.

In the months since the final agreement announcement, the TPP collected many new endorsements, particularly among business groups. The U.S. Chamber of Commerce announced its endorsement Jan. 6, while encouraging the Obama Administration to work with Congress and industry members on unresolved concerns.

After the Feb. 4 signing attention will largely shift to the U.S. Congress, where leaders have so far hesitated to commit to any timing for a potential vote in part because much work is needed before a vote can even be considered. The International Trade Commission (ITC), which held a hearing on the agricultural portions of the agreement earlier this month, is accepting formal testimony on the merits of the agreement until Feb. 15. Their final report due May 18 will incorporate those comments, required by this past summer’s Trade Promotion Authority (TPA) bill.

With that ITC report as an official “scorecard” of the TPP, the administration will work with Congressional leaders to find time for a vote. That is a critical point because according to the regulations set down by the TPA, after introducing the implementing legislation the appropriate committees must complete their reviews and hold a final up-or-down vote within 90 days.

Many congressional watchers speculate that this final vote will not take place until after the U.S. elections in November. Some legislators fear trade agreements are too political to address prior to the election, while others may hope a new administration will place different priorities on the agreement’s portions that are more contentious. Unfortunately, any delays will mean U.S. wheat producers and their customers overseas must continue managing through inconsistencies in sanitary and phytosanitary standards and paying higher tariffs until the agreement is implemented.

Conceived as much more than just another free trade agreement, TPP was to be the platform for expanded trade in an entire region. In fact, within a few weeks after negotiators struck an agreement, as many as 12 additional countries contacted U.S. Trade Representative officials to test the membership water. However, no other country may apply for membership until after the U.S. Congress and the governments of the 11 other countries ratify the agreement. For this positive momentum to continue and ultimately help reach that goal of lifting economic opportunity in the region, moving as quickly as possible toward the Congressional vote on TPP is critical.

By Dalton Henry, USW Director of Policy

thumbnail

While achieving progress in multilateral trade negotiations among World Trade Organization (WTO) members is often frustrating, USW sees some steps in the right direction in the recent agreement at the WTO Nairobi Ministerial meeting held in mid-December — despite some setbacks.

USW is particularly pleased to see the elimination of export subsidies, which rank high among the most trade-distorting forms of support. The agreement immediately eliminates such subsidies for developed countries and calls for a phase-out for developing countries. Though the world’s largest traditional user of agricultural export subsidies – the European Union – has moved away from the subsidies, agreeing to eliminate them is no small matter.

USW welcomes the recognition in Nairobi that the United States can keep offering food aid and development programs without change, which underpins this country’s leadership in the world. Wheat produced by U.S. farmers is a cornerstone grain for food aid that is affordable, nutritious and fits monetization projects that encourage in-country development.

The Nairobi agreement also addressed export credit and financing rules that reflect reforms the United States has already made. USW believes there should be no further restrictions on the GSM-102 program, which is a reliable, practical financial tool used by several U.S. wheat importing countries.

Despite these gains, USW is disappointed that the Ministerial reauthorized the use of transportation, marketing and processing subsidies for agricultural products for developing countries. This exception could provide cover to bad actors who have violated past agreements to the detriment of producers around the world. USW will continue working with the Office of the U.S. Trade Representative (USTR) to ensure developing country members do not abuse this exception.

The Ministerial reflected differing views on future WTO negotiation priorities. At least the agreement recognizes that work would continue on Doha’s remaining issues in agricultural trade. This includes public stockholding programs, which India uses to subsidize its farmers, and a “special safeguard mechanism,” which would allow countries to “snap-back” tariffs on products in the face of rising imports. The continuation of these negotiations is especially concerning given some countries’ insistence on using these negotiations to roll back progress at the WTO.

USW congratulates and thanks our negotiators at USTR for their hard work. We look forward to sharing the U.S. wheat farmer’s voice in future negotiations. We must also ensure that WTO members hold firm on past agreements, allow no more backpedaling on domestic subsidies and return their focus to the original goal: liberalizing trade policies to promote economic growth for all participants.

By Dalton Henry, USW Director of Policy