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Impacts of the Trans-Pacific Trade Partnership

The Trans-Pacific Partnership is a free trade agreement which will liberalise trade and investment between 12 Pacific-rim countries. But should the agricultural industry be wary? Ben Pike reports

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What will be the impact of the Trans-Pacific Trade Partnership on #farming?

Few farmers will underestimate the monumental job facing politicians tasked with striking post-Brexit trade deals for British food and drink.


Some see exiting the EU as an exciting opportunity to find new customers, while others fear the UK could be standing at the back of the queue.


Philip Hammond and Liam Fox have both moved to reassure the country that work has already begun, but until Article 50 is triggered, limited progress will be made.

 

Complex


The resource-sapping complexities of trade deals are exemplified by the Trans-Pacific Trade Partnership Agreement.


While more far-reaching and politically significant than any trade deal the UK is likely to sign, parallels can be drawn in the implications for agriculture.


It took seven years to get all 12 countries to agree the framework, but there are still doubts over whether it will be ratified.

Was farming’s voice heard?

The premise of the Trans-Pacific Trade Partnership Agreement (TTPA) from agriculture’s perspective is fairly simple – easier food and drink trade with the other 11 countries.


However, sceptics say imports will flood home markets, as import tariffs placed on the currently of origin will be slashed or removed.


Japan, a promised land for many countries involved in the TTPA, would immediately end tariffs on 32 per cent of its agricultural imports. Australia, Malaysia and New Zealand will eliminate more than 90 per cent.


Canada’s National Farmers Union denounced the TTPA, claiming it ‘would severely damage’ the dairy, chicken, turkey and egg sectors and ‘provide illusory market gains’ for beef, pork, grain and oilseeds.


Its government is already in the process of discussing compensation packages for certain sectors.


The USA’s NFU, which represents about 200,000 farmers and ranchers, repeatedly warned during negotiations that currency manipulation would make the deal meaningless.


Roger Johnson, the union’s president, said some smaller countries would deliberately devalue their currency to make their products cheaper and imports more expensive.


However, Mr Johnson’s view is not shared by all organisations representing farmers in the USA.


The National Cattlemen’s Beef Association, National Pork Producers Council and National Chicken Council are optimistic a final deal would benefit their sectors.

Net exporters back the deal

Net exporters back the deal

The Federated Farmers of New Zealand is fully behind the deal. Spokesman Leigh Catley told Farmers Guardian a trade agreement with the United States, Japan and Mexico would have been unlikely through bilateral agreements.


She said: “It is a significant achievement for a small trading nation which has been exposed to free market forces since the 1980s.


"Food production is always a high priority for New Zealand governments because it is the largest industry in the country and the source of our major exports. Federated Farmers has been involved in the process every step of the way."


The chief executive of the National Farmers’ Federation (NFF) of Australia said ’agriculture is always difficult in trade deals’, but that it will present opportunities for the nation’s farmers.


Tony Mahar said: "We think it will build on a range of opportunities which have resulted from bilateral trade agreements and provide more markets and opportunities for Australia’s farmers."

 

Horticulture


Australia’s horticulture growers exporting to Japan stand to make huge gains, while the country’s dairy sector has been reasonably well protected.


Australia will also be able to export an additional 65,000 tonnes of sugar into the USA and up to 8,400t of rice into Japan.


Mr Mahar said the NFF had been heavily engaged with its government during negotiations and a co-ordinated approach with the whole industry, food and drink, were among the government’s top TTPA priorities.

Global export number crunching

  • New Zealand exports 95 per cent of its agricultural production and estimates it would be NZ$259m (£139m) annually better off if the TTPA is ratified (Source: FFNZ)
  • TTPA countries already ship 43% of their total agricultural exports to each other (Source: USDA)
  • Canadian dairy farmers could be compensated to the tune of CAN$4.3bn (£2.48bn) over 15 years for the impact the TTPA will have on the sector (Source: Canadian Government)
  • Wine, a major export product for Australia, New Zealand and the USA, will see its 15 per cent import tariff removed when entering Japan (Source: TTPA)
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