GARNER, Iowa — The Iowa Cattlemen’s Assoc. (ICA) supports the Trans-Pacific Partnership (TPP), saying, "It’s a good development for Iowa’s beef business," according to ICA past president Ed Greiman.
"The Japanese like the marbled beef that comes out of Iowa, and we have a lot to gain from this agreement," said the Garner cattle producer.
On Oct. 5, 12 countries including the Pacific Rim signed the TPP: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States. As the nation’s fourth-largest cattle producer, Iowa’s largest cattle organization said the TPP would provide a platform for U.S. exports in a region that includes some of "the world’s most robust economies, representing nearly 40 percent of global GDP (gross domestic product)."
"Increased free trade helps the agriculture sector," said Grant Kimberley, director of market development for the Iowa Soybean Assoc. "We all benefit when we export more meat."
The TPP follows Congressional Trade Promotion Authority (TPA) reauthorization in July, which allowed the U.S. Trade Representative (USTR) to be the sole negotiator in TPP discussions on behalf of the United States. The ICA said it had "encouraged Iowa’s delegation to pass the legislation."
"Many of the countries that are part of the agreement need the grain and meat we produce," said state Agriculture Secretary Bill Northey. "The agreement will reduce trade barriers on those products and allow Iowa agricultural products to compete on a level playing field."
In addition, ICA said the TPP would reduce tariffs and level the competitive playing field for U.S. beef exports to export markets. In particular, the beef industry’s largest export market, Japan, would see a tariff reduction from 38.5 to 9 percent over the next 15 years.
Currently, beef exports add more than $350 to each head of cattle sold in the United States; the ICA said these additional foreign marketing opportunities would allow the U.S. to not only maintain current demand, but potentially add more value to asking price of a fed steer in the long term.
David Thomas, vice president of Business Roundtable – who analyzed every state that would benefit from the TPP, detailing the benefits of trade and investment with these countries – said Iowa has good trade ties with several of the nations.
"Iowa exported $1.8 billion in goods in 2012 and $295 million in services in 2011 to the ‘new FTA (free trade agreement)’ TPP countries," he said. "An estimated 123 Iowa businesses are subsidiaries of companies based in TPP countries, serving as an important source of business investment and job creation in the state.
"By removing barriers and strengthening partnerships, the TPP would encourage companies based in TPP countries to increase their business investment in Iowa, supporting economic growth and jobs throughout the state."
Richard Guebert Jr., Illinois Farm Bureau president, said the TPP would open foreign markets to U.S. food and agriculture, providing new and commercially meaningful market access and advancing regulations that are transparent and based on science.
"Trade is important to Illinois farmers and agriculture, and Illinois agriculture will certainly benefit from this agreement," he said, "as TPP partners purchase 42 percent of all U.S. agriculture exports."
Moreover, the Dauch Center for the Management of Manufacturing Enterprises at Purdue University said: "Indiana already had FTA with six of the member countries, and with the TPP will get a chance to tap five countries of Asia, some previously having import duty of as much as 24 percent. Thus, TPP will have a great impact on the dynamically growing Indiana economy, as per the report."
According to the International Trade Administration (ITA), Kentucky’s exports could benefit from new market access as a result of Brunei, Japan, Malaysia, New Zealand and Vietnam eliminating their tariffs. "The TPP could further promote regional integration by providing companies the ability to access supply chains that span four continents and a dozen countries," the IFA stated.
For Michigan, the USTR said "notably, small and medium-sized firms benefit from the tariff-elimination provisions of free trade agreements." It added Michigan would benefit from the TPP because "transparency obligations, particularly those in the customs chapters, are vital to small and medium-sized firms, which may not have the resources to navigate customs and regulatory red tape."
The ITA said Ohio exported $29.2 billion annually in goods to all TPP markets (2012-14 average). These exports increased by 8 percent during that period, with 58 percent of Ohio’s total goods exports going to the entire TPP region.
Thomas said an estimated 262 Tennessee businesses are subsidiaries of companies based in TPP countries, serving as an important source of business investment and job creation in the state. "For instance, Canadian and Japanese companies alone employed approximately 37,900 employees in Tennessee in 2010," he said.
"By removing barriers and strengthening partnerships, the TPP will encourage companies based in TPP countries to increase their business investment in Tennessee, supporting economic growth and jobs throughout the state."
According to Iowa State University Agricultural Economist Dermot Hayes, the TPP would cause exponential growth in U.S. pork exports to the TPP countries and generate 10,000 U.S. jobs tied to pork exports.
