Two national wheat groups say now that the members of the former Trans-Pacific Partnership have held talks on a new multilateral trade deal without the United States, wheat growers can expect a $200 million tariff disadvantage with competitors in the region.
They rightly await action from the Trump administration. The countries remaining in the negotiations represent both major customers and competitors.
In 2008, the United States began multilateral negotiations with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam on the proposed Trans-Pacific Partnership trade pact. It was the signature trade initiative of the Obama administration.
From the get-go the deal drew fire across the board, but particularly from the left. The negotiations were said to be too secret, the concessions to big business too big, the safeguards on human rights and labor too weak, and the whole deal was said to be too complicated. Things went south from there.
By the time the 2016 presidential campaign rolled around, it was hard to find any U.S. politician besides President Obama who had anything good to say about the deal, and even he was vague about the details because of that secrecy thing. He signed the deal last February, then turned it over to Congress with little hope it would be ratified before the election.
Bernie Sanders said TPP was a “global race to the bottom” to boost corporate profits. As secretary of state, Hillary Clinton called TPP the “gold standard” of trade pacts, but candidate Clinton said that when she read the final text she couldn’t support it. Donald Trump said the deal undercut American workers and companies.
So, no matter who won the 2016 election, the U.S. was bound to leave the deal. But, it is Trump who won on a promise he’d pull out of the pact and negotiate better bilateral deals with Pacific countries.
Trump is 1-for-2 and wheat growers and other farmers who depend on trade, particularly in the Pacific Rim, are waiting for him to fulfill the other half of the promise.
It’s unclear what the ever mercurial and pragmatic commander-in-chief really has in mind.
Just last weekend the president said he’d be open to rejoining the TPP, now known as Trans-Pacific Strategic Economic Partnership Agreement, if the remaining countries come up with a better deal.
It’s hard to imagine the remaining partners will craft a better deal for the United States without the United States sitting at the table, but conventional wisdom doesn’t count for as much now as it once did.
U.S. farmers export $135 billion in agricultural products each year. They have a lot riding on trade and are understandably anxious that their interests are actively advanced.