Ag groups largely positive about TPP text — Too bad Ag groups don’t represent farmers and ranchers like R-CALF does
On Thu, Nov 5, 2015 at 8:34 PM,
Ag groups largely positive about TPP text
By Helena Bottemiller Evich and Jenny Hopkinson
11/05/2015 09:01 PM EDT
The transpacific trade deal released Thursday continues to unfold as a goody bag for agriculture interests, including new tools to tackle disputes over animal and plant product safety, clearer biotechnology policies and better market access for beef and pork.
So far, commodity groups are either praising what they’re seeing in the agreement’s 1,000-plus pages or, at least for now, holding their peace.
"Before the text of the dealwas released, most of the ag folks were leaning in to a ‘yes,’ " said House Agriculture Committee Chairman Mike Conaway. "[A]t this point I haven’t seen any specific push-back from any of the ag groups."
With thousands of product tariffs to examine, farm groups are still poring over the finalized Trans-Pacific Partnership text. Conaway said he’s leaning toward voting for the deal when it comes up for congressional approval as soon as next spring, but he’s consulting with his constituents for their take.
However, happiness over the deal isn’t universal. The National Farmers Union, a group that represents smaller farms, panned the agreement, saying it will hurt ranchers because of increased competition from beef imports and doesn’t include enforcement mechanisms on currency manipulation.
"This agreement has been peddled to farmers and ranchers as a potential goldmine for farm exports," NFU President Roger Johnson said in a statement. "But as with other trade deals, these benefits are likely to be overshadowed by increased competition from abroad, paired with an uneven playing field that will not only reduce revenues for farmers and ranchers, but will also speed the loss of U.S. jobs."
U.S. rice and dairy groups have long been lukewarm on the deal because of provisions that they say hinder full market access for exports. The industries have raised concerns about policies that still limit exports to Japan, the world’s third-largest economy, and dairy groups have taken issue with Canada’s refusal to open its market fully. The National Milk Producers Federation, U.S. Dairy Export Council and USA Rice, as well as the American Farm Bureau Federation, all said Thursday that they’re waiting to review the agreement before commenting.
U.S. sugar producers, meanwhile, criticized the small increase in sugar imports from Australia, and meat groups are worried that opening the United States up to more lamb will hurt domestic producers.
SPS, friend or foe?
The sanitary and phytosanitary, or SPS, chapter, which sets new rules aimed at reducing unfair trade barriers raised under the guise of safety or pest concerns, is almost universally liked by industry groups.
The chapter sets rules requiring countries to base food safety and related regulations in science and outlining how to manage risks. It also sets up a TPP-specific SPS committee and encourages countries to move toward establishing equivalency between one another’s regulatory systems.
The chapter allows countries to question each other’s import checks to make sure requirements are based on real risks. The deal also requires nations to notify importers or exporters within seven days if they’re blocking shipments because of an SPS issue.
If countries disagree about such things as blocked shipments or drug residue sampling and can’t solve the problem bilaterally through the usual channels, then they can use what the chapter calls cooperative technical consultations, or CTC – basically a consultation process with related agencies to help resolve the dispute. Once an issue is raised, the two parties have to meet within 30 days, with the aim of resolving the disagreement within 180 days.
The consultation system creates another avenue for arbitration beyond the often drawn-out and high-profile dispute-settlement system under the World Trade Organization, although the 180-day goal for resolving disputes is hardly a quick turnaround.
The additional tools to resolve SPS disputes are of great interest to an array of commodity groups, whether pork producers that have struggled with ractopamine restrictions, chicken exporters that have gone up against Russia’s ban on antimicrobial chlorine wash, or produce companies facing concerns over pesticides and pests.
Western Growers President Tom Nassif said the SPS chapter was one of the most important for the produce industry.
"The effectiveness of new mechanisms TPP provides for producer recourse when unfair SPS measures are imposed will be the greatest indication of TPP’s long-term success for the fresh produce industry," Nassif said in a statement Thursday.
The Office of the U.S. Trade Representative said in its summary of the chapter that it in no way weakens food safety in the U.S.
"On the contrary, it will help TPP partners better ensure the health and safety of their food," the agency contends.
Rep. Ron Kind (D-Wis.), a strong supporter of the trade deal, emphasized to POLITICO that it goes further than any trade agreement in making sure that food-safety standards are based on science – a key point of interest for U.S. agricultural exporters.
But consumer groups are railing against the chapter, calling it worse than expected — and they have been slamming the deal for deal for months over concerns about what would be in the final text.
Lori Wallach, director of Public Citizen’s Global Trade Watch, blasted the deal, saying it would lead to a "flood of unsafe imported food."
"When the administration says it used the TPP to renegotiate [NAFTA], few expected that meant doubling down on the worst job-killing, wage-suppressing NAFTA terms, expanding limits on food safety and rolling back past reforms on environmental standards and access to affordable drugs," she said.
Democratic presidential candidate Sen. Bernie Sanders (I-Vt.) toed a similar line, saying the TPP was worse than he thought it would be.
"The agreement would threaten American laws that protect the safety of the drugs we take, the seafood we feed our families and the toys our kids play with every day," Sanders said in a statement Thursday.
In a 17-page take-down of the deal, Public Citizen eviscerated the SPS chapter as a threat to the very basis of U.S. food-safety protections.
The group takes issue with, among other things, a provision that gives companies a right to challenge trade-enforcement actions, including things like import alerts, detentions and even lab analyses, which they say "second-guesses U.S. inspectors and creates a chilling effect that would deter rigorous oversight of imported foods."
Patrick Woodall, research director at Food and Water Watch, said the SPS chapter gives the industry just what it wanted, providing "a more powerful weapon to use against food-safety rules than the WTO. That’s what the industry asked for, they wanted stronger, more binding SPS rules to attack food-safety regulations they thought were restrictive trade barriers."
Woodall also takes issue with the way the No. 1 objective of the chapter is worded: to "protect human, animal or plant life or health in the territories of the parties while facilitating and expanding trade by [utilizing] a variety of means to address and seek to resolve sanitary and phytosanitary issues."
"It really puts the commercial piece on par the food safety piece," he said, arguing that the WTO’s SPS provisions treat food safety and consumer protection with greater importance and make providing a level playing field being a secondary objective.
Seafood is one of the biggest concerns for consumer and food-safety advocates wary of the lower sanitation and production standards in developing countries like Vietnam, a major player in the global aquaculture market.
"I’m especially worried about this related to antibiotics and fungicide residues on fish from Vietnam or Malaysia," Woodall added. "The U.S. position on unapproved antibiotics being illegal [a reason for a large portion of import actions against seafood] … Vietnam could conceivably challenge that."
The TPP marks the first time that biotechnology has been given a mention in a trade agreement, something agriculture groups say is an important step in harmonizing international approval standards and ensuring market access for new products.
The deal calls for countries to try as much as possible to align regulations for approving and importing biotech crops and make approval documents publicly available. Member countries also have agreed to communicate when low levels of unapproved GE crops are detected in imports and to work to reduce those occurrences.
While the provisions are largely voluntary, crop groups are optimistic that they will help align the countries’ rules, set a precedent to address biotech issues in future trade deals and put pressure on nearby countries, including China, to fall in line with the policies if they want easier access to TPP member economies.
"For these 12 member countries, we really are not having a lot of challenges with biotechnology, but if you’ve got another country like China that has expressed some interest" in joining the deal, "they will have to agree to those principles on biotechnology," Floyd Gaibler, the U.S. Grains Council’s director of trade policy and biotechnology.
Increased market access
Expanding market access remains among the most important outcomes for ag groups. The United States is highly efficient at producing food, feed and fiber and already exports huge quantities, making it one of the few U.S. sectors with a trade surplus.
Dave Warner, spokesman for the National Pork Producers Council, called the text a 99.9 percent win for the U.S. pork industry.
Under the agreement, tariff and non-tariff barriers will be eliminated for pork products in almostevery TPP country, but they will be phased out differently depending on the country, Warner said. For Japan – where pork is highly sensitive but is the biggest market by value for U.S. pork producers – most tariffs will vanish after 10 years.
For Malaysia, tariffs will drop the moment TPP is enacted. And in New Zealand, tariffs on hams and shoulders will phase out in three years, Warner said.
"No free-trade agreement is perfect, but this is pretty darn close," Warner said. "This is going to be huge for the U.S. pork industry and big for the U.S. agriculture economy."
Agriculture commodity groups are largely happy with the deal, at least at first glance. The TPP will eliminate the few remaining tariffs in the region on things like corn and expand the market for commodities used in animal feed and fuel.
"Trade agreements are essential for us …," Gaibler said. "And I think TPP is probably the most comprehensive agreement that we have."
But not all groups are pleased with the outcome.
R-CALF USA President Bill Bullard said TPP would hurt several agricultural sectors, one of them being sheep. "Our sheep industry has been absolutely decimated by huge volumes of cheaper Australian imports, and because the TPP adds New Zealand, which also is a major lamb exporter, the TPP is sure to further decimate our commercial sheep industry," he said in a statement.
But by and large, agriculture groups are preparing to make the case to lawmakers that, while there may be some problems with the deal, its approval will be a boon to farmers.
"We always know this agreement is coming awfully close to presidential politics and things like that, so I have to think the grumbling you are seeing right now is the posturing they have to do," a corn industry source said. "Lawmakers have to ask themselves what’s the alternative here if we don’t do this. What is our world going to look like …? While not perfect, we are a lot better off with this type of agreement in place."
Adam Behsudi, Chase Purdy and Victoria Guida contributed to this report.