June 14, 2016 | BY: PHILIPP EBNER VON ESCHENBACH & LILLIAN SCHULZ
On June 14, 2016 the U.S. House of Representatives’ Ways and Means Trade Subcommittee invited five witnesses to speak at the hearing on Expanding U.S. Agriculture Trade and Eliminating Barriers to U.S. Exports. The witnesses offered testimonials on areas of concern and support in the current negotiations of the Trans-Pacific Partnership (TPP) trade agreement. The common consensus noted by subcommittee chairman Representative David Reichert was that the “U.S. cannot afford economically and geopolitically to not pass TPP.” Substantial progress has already been made by globally on bilateral and regional trade agreements. This expresses a clear statement that the 21stcentury trade world will be written regardless of U.S. involvement. Therefore, knowing the current global motivators, it is imperative for the U.S. to be part of the conversation and not fall behind due to political stalemates and disagreements.
The President of the Washington Brewers Guild and Co-Owner of Schooner EXACT Brewing Company, Heather McClung, identified how TPP would have significant benefits to every facet of the U.S. economy. Looking at the brewing industry itself, an increase in market accessibility in the Pacific would not only increase the amount of beer sold, but would subsequently benefit multiple other sectors, such as agriculture production of hops and barley and manufacturing of stainless steel brewing equipment. TPP’s potential is immense and such needs to be addressed correctly with the inclusion of the U.S.
Dale Foreman, Chairman of the Forman Fruit Company, noted that as over 95% of the world’s population resides outside the U.S., access to TPP countries and their rising middle class is vital for the future of America’s agricultural sector. A growing middle classes in Asia and the Pacific are demanding fresh quality produce that the U.S. agriculture sector can provide. Tariff and non-tariff barriers that inhibit access to U.S. products in these areas make U.S. produce unable to compete. TPP has the ability to significantly open up trade markets for produce, in addition to other agriculture sectors.
John Weber of the National Pork Producers Council stated that beef would be the largest agricultural sector in Texas to benefit from TPP. Global demand for U.S. agricultural goods would be huge; however, protectionist policies and other trade barriers made it unattractive for buyers. TPP would boost demand by breaking these barriers and converging standards on a global stage.
While all witnesses were predominantly in favor of TPP, Dale Forman raised concern about the implementation of TPP standards and regulations in its involved countries. Congressman Earl Blumenauer, member of the Ways and Means Subcommittee on Trade, agreed noting that “enforcing trade agreements is intensive, time consuming, and hard,” suggesting that the current 15 million dollar budget to enforce trade agreements is too small to ensure complete implementation of TPP regulations.
Despite the support from the agricultural sector, TPP is unlikely to pass before the presidential election this year. Congressman Charles Rangel, member of the Ways and Means Subcommittee on Trade, argued that this is partially due to the “fear of job loss” and the current anti-free trade rhetoric in the 2016 presidential campaign. This subcommittee hearing provided a forum for the necessary discussion between politicians and the U.S. agriculture industries on current TPP negotiations.