TPP could mean millions of dollars for Missouri agriculture
COLUMBIA - A foreign trade deal could send more of the Show-Me State’s soybeans to Singapore, more of its meat to Malaysia and more of the world’s money to Missouri farmers.
The Trans-Pacific Partnership, or TPP, is a comprehensive, multi-lateral free trade agreement between the U.S., Canada, Mexico and nine countries in the Asia-Pacific region.
Mike Deering, executive director of the Missouri Cattlemen’s Association, said the deal has far-reaching implications for Missouri’s farmers.
“TPP would open doors and limit tariff restrictions in key markets in the Pacific,” Deering said. “Most of agriculture’s customers live outside the U.S., so this expands our industry’s access to those global markets.”
Both Hillary Clinton and Donald Trump have expressed opposition to TPP, saying that the U.S. needs a stronger agreement that more aggressively bolsters the American manufacturing sector.
But Deering said, when it comes to trade deals, the U.S. can’t let perfect stand in the way of good.
“The candidates are correct in that agreements need to be better. They need to be more thoughtful,” Deering said. “The Missouri beef industry would love Japan to give us a 0 percent tariff, but in trade agreements, you usually can’t have the perfect deal on the first try.”
The agreement reduces or eliminates tariffs on some of Missouri’s key agricultural exports, including soybeans, pork and beef. The deal’s market expansion and free trade benefits could increase Missouri’s net agriculture exports by $105 million per year.
Congress hasn’t yet ratified the agreement, but several Missouri agriculture groups, including the Missouri Farm Bureau and Missouri Pork Association, have expressed support for the trade deal.
Farm incomes are expected to hit their lowest point since 2009 this year. The Rural Mainstreet Index, a monthly economic benchmark that measures the health of the farm economy, slumped to its lowest levels since April 2009 this month. According to the index, one in five grain farmers will experience negative cash flows this year. Some farmers are looking to TPP to boost falling farm incomes by providing additional outlets for farmers to market their commodities.
If the U.S. fails to ratify TPP, the country could lose market access and trade advantages across many industries, from agriculture to automobile manufacturing. The trade agreement won’t go into full effect without U.S. ratification, but other countries will likely move forward with bilateral trade deals if the U.S. fails to act. Delaying the ratification of TPP by even one year could cost the country as much as $94 billion in permanent lost income.
Agricultural exports currently support more than 30,000 Missouri jobs. In 2014, the U.S. Department of Agriculture estimated that every $1 billion generated by agricultural exports provided 7,550 American jobs.
Don Nikodim, executive director of the Missouri Pork Association, said Missouri agriculture needs TPP to keep up with its foreign competitors in the global agriculture industry.
“If the U.S. doesn't pass TPP, China is leading a coalition of other states to draft their own similar trade agreement," Nikodim said. "It's up to us to get engaged and get this agreement passed to ensure open trade and market access for U.S. farmers in the TPP countries."
Garrett Hawkins, national legislative programs director for Missouri Farm Bureau, said TPP could enhance the American sphere of influence in southeast Asia and the Pacific region, along with U.S. farmers' market share in expanding markets.
"We remind farmers and ranchers that every day that passes that we do not act on TPP is another day that we lose market share in critical countries, like Japan," Hawkins said. "But TPP doesn't just increase our market share in a region where we need to ramp up efforts. It also increases U.S. influence in a region of the world that could benefit from our leadership."
In order for TPP to take full effect, the U.S. must ratify the agreement before February 2018.