DAVIS, Calif. — The proposed 12-nation Trans-Pacific Partnership trade pact could be significant for California, lowering import barriers and enabling more of the state’s agricultural products to be sent to Japan and other nations, university researchers conclude.
The deal, the full text of which was unveiled by President Barack Obama’s administration on Nov. 5, would also enable California’s industries to reach developing markets such as Malaysia and Vietnam, asserts a study led by Daniel Sumner, an ag economist at the University of California-Davis.
Further, better access to imports from TPP countries would give U.S. consumers more spending power, and thus could increase domestic demand for California farm products, Sumner observes in an essay outlining the impacts of the trade deal.
Freer trade “generally means more economic growth and expanded markets” at home and abroad as well as more political and economic stability, the paper asserts.
“California agriculture will benefit from stability in the Pacific Rim markets,” the essay argues.
Sumner wrote the analysis with the help of researchers Hyunok Lee and William A. Matthews of the UC’s Agricultural Issues Center, which Sumner leads. The paper was an update for the university’s Giannini Foundation of Agricultural Economics.
California now sends about 40 percent of its exported agricultural goods to TPP countries, with about 72 percent of that total shipped to the “big three” — Canada, Japan and Mexico, according to the Agricultural Issues Center.
Almond exports from California to TPP nations in 2013 were valued at $650 million, with wine and table grapes closely behind at about $500 million in export value each, according to the researchers.
Under the TPP, Japan, Malaysia and Vietnam would eliminate tariffs for tree nuts. The current tariff into Japan is just 5.6 percent, but the Vietnam tariff is 23 percent, the researchers note.
Tariffs for citrus fruit in Japan, Malaysia and Vietnam would also be eliminated. Already, Japan imported about $170 million in California citrus fruit in 2013 despite a 12 percent tariff, and Malaysian buyers added another $24 million to California citrus exports that year, Sumner wrote.
The analysis comes as farm groups nationwide have had mixed reactions to the 30-chapter, 2,000-page agreement. The National Potato Council and Northwest Horticultural Council were among groups that endorsed the deal, while the National Farmers Union is among its critics.
The California Farm Bureau Federation is urging the state’s congressional delegation to support the deal, arguing that the Golden State’s proximity to Pacific Rim countries uniquely positions the state to gain from it.
“California-grown food and food products have a worldwide reputation for high quality, and our ports have the ability to deliver those products efficiently,” CFBF president Paul Wenger said in a statement. He added that increased farm exports would lead to jobs in urban as well as rural areas.
For the U.S. economy as a whole, the TPP’s impacts will be “moderate at best,” Sumner and the other researchers wrote. Its most important influence may be to entice China and other large Asian economies to join, which would “add substantially to the market for California agricultural exports,” the researchers concluded.