Matthew Weaver/Capital Press
President Donald Trump needs to rejoin the Trans-Pacific Partnership trade agreement, an agriculture policy expert says.
The president made an off-the-cuff remark when speaking with world leaders at the Davos, Switzerland, economic summit that he’d be willing to take another look at the deal, but it would have to be renegotiated and improved considerably for the U.S., said Barry Flinchbaugh, professor emeritus in the Department of Agricultural Economics at Kansas State University.
Flinchbaugh said he has no knowledge that Trump has made any moves in that direction, but U.S. Agriculture Secretary Sonny Perdue and Senate Agriculture Committee Chairman Pat Roberts, R-Kan., have been pressing him on TPP and the North American Free Trade Agreement, which includes the U.S., Mexico and Canada.
U.S. farmers depend on trade with the Pacific Rim nations. Up to 90 percent of the Northwest wheat crop is sold to Japan and other Asian nations, and many crops and livestock produced in the U.S. are sold overseas. Without TPP, U.S. producers are put at a disadvantage to competitors such as Australia and Canada, which are parties to the agreement.
The damage to Northwest wheat growers caused by the U.S. not being part of TPP would be substantial, they say. After full implementation of the new TPP, Japan’s import tariffs on Canadian and Australian wheat will drop by about $65 per ton while the tariff on U.S. wheat will remain. U.S. Wheat Associates estimates that would put U.S. wheat producers at a total price disadvantage of more than $200 million per year from TPP.
Flinchbaugh agrees with Trump that some parts of the TPP could be improved, particularly for manufacturing.
“I don’t know that you would improve it very much (for) agriculture,” Flinchbaugh said. “It’s as lucrative for agriculture as any trade agreement I’ve seen in my lifetime.”
Flinchbaugh estimates that TPP, which includes 11 Pacific Rim nations, would add about $5 billion to net U.S. farm income.
“I think Trump is probably surprised or even stunned that the 11 nations would go on without us,” Flinchbaugh said. “He’s having a hard time learning that the day of us dictating to everybody in the world is over, if in fact it ever did exist. It’s kind of hard for him to not be in charge.”
Flinchbaugh said Trump is “dead wrong” on replacing TPP with a series of bilateral agreements. A strong, multilateral agreement such as TPP is easier to negotiate than dealing with individual countries one at a time, which takes “forever,” he said.
“He’s got this idea that he can out-negotiate anybody,” Flinchbaugh said. “That may be true in the real estate business, but it’s not true in the United States government. This might be a good lesson to him. If he learns something from it, we may actually start to renegotiate. We just absolutely need to be in TPP.”
The TPP is particularly important for dealing with China, Flinchbaugh said.
“China respects muscle,” he said. “Twelve countries including the Asian countries, Australia, New Zealand, Canada and the United States — that’s muscle. That’s the only thing they understand. He played right into their hands when he withdrew from (TPP).”
On the possibility of rejoining the agreement, Flinchbaugh said it’s up to Trump.
“When Japan and New Zealand publicly state that they’re ready to talk, we ought to talk,” he said. “I would argue that’s a no-brainer. He’s got to put the initiative and then be quiet and let the negotiators work.”
Flinchbaugh advised agriculture industry representatives to work through Perdue, Roberts and Rep. Collin Peterson, the ranking Democrat on the House Agriculture Committee, to “keep the pressure” on Trump. Trump appears to have a good rapport with Perdue and Roberts, Flinchbaugh said.
“I think we’ve at least got his attention,” Flinchbaugh said.