Editorial

Trans-Pacific pact looks good for agriculture

Thursday, October 8, 2015

Details of the Trans-Pacific Partnership agreement have been slow in coming, and the massive trade pact won't be voted on by the U.S. Congress until 2016, but what we have seen looks good for Nebraska agriculture.

That's especially true for beef, veal and pork.

According to a USDA release issued Wednesday, Japan's beef tariff, now as high as 50 percent, will be reduced to 9 percent. Japan will eliminate duties on three-fourths of tariff lines, including processed beef products. Vietnam will eliminate tariffs and Malaysia will lock tariffs in at 0 percent.

For pork, Japan will eliminate duties on nearly 80 percent of tariff lines, including processed pork. Remaining tariffs will be cut and the "Gate Price" system will be significantly altered. Nearly all Malaysian tariffs will be locked in at 0 percent and Vietnam will eliminate tariffs.

Tariffs are already low on soybeans and corn, but reduced meat tariffs will create more demand, Japan, Malaysia and Vietnam will end tariffs on soybean oil and meal, and Malaysia and Vietnam will end tariffs on corn within five years.

Nebraska's top five exports, in order, are soybeans, feeds and fodder, beef and veal, corn, hides and skins.

Some 50,800 jobs are supported by agricultural exports, and Nebraska ag exports worth $6.7 billion are sold each year.

And it's not just Nebraska farmers who will benefit. Japan, Malaysia and Vietnam will end tariffs on all fresh and processed fruits, including citrus.

Malaysia and Vietnam will end all tariffs on vegetables and Japan nearly all tariffs on fresh and processed vegetables, and all three will eliminate tariffs on potatoes and potato products.

Japan will establish a new duty-free quota for U.S. rice. Malaysia and Vietnam will eliminate tariffs.

"Increased demand for American agricultural products and expanded agricultural exports as a result of the Trans-Pacific Partnership agreement will support stronger commodity prices and increased farm income," said U.S. Ag Secretary Tom Vilsack.

"Increased exports will support more good-paying export-related jobs, further strengthening the rural economy," he said.

There's always another side, of course.

Although she supported early drafts of the TPP as secretary of state, presidential candidate Hillary Clinton now opposes the final product.

She says it won't help create enough jobs or wages for Americans, won't advance national security and may allow currency manipulation to continue and give pharmaceutical companies free rein.

Opponents say much of the income gain will go to workers making more than $88,000 a year and the agreement will contribute to income inequality by promoting cheaper goods from low-wage countries.

Since the TPP protects patents and copyrights, owners of those intellectual property will receive more benefits than lower-income workers.

That same patent protection will reduce the availability of cheap generic drugs and add to pharmaceutical profits, they said. And, competitive business pressures will reduce Asian incentives to protect the environment. Plus, the TPP would help circumvent financial regulations.

We hope there will be some meaningful debate when the trade agreement question reaches Congress, and the pros and cons receive a fair hearing.

On balance for now, however, it looks like the TPP is a good deal for Nebraska.

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