Key Topic – Trans-Pacific Partnership (TPP)

Trans-Pacific Partnership (TPP) – On Oct. 5, 2015, trade ministers from the 12 participating Trans-Pacific Partnership (TPP) countries – the United States, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – announced a successful conclusion to their negotiations. The Office of the U.S. Trade Representative (USTR) has posted a brief summary of the agreement on its website.

UPDATE: The full text of the TPP agreement is available online. USMEF has posted a summary of key beef and pork trade provisions here.

UPDATE: On Nov. 6, 2015, the USMEF membership unanimously approved a resolution supporting ratification and implementation of TPP. View the resolution online.

UPDATE: On Jan. 23, 2017, President Donald Trump signed an executive order withdrawing the United States from TPP. USMEF issued the following statement from then-President and CEO Philip Seng:

USMEF remains fully committed to our valued trading partners in the Trans-Pacific Partnership (TPP) and the North American Free Trade Agreement (NAFTA). These countries account for more than 60 percent of U.S. red meat exports.

In some of these key markets, the U.S. red meat industry will remain at a serious competitive disadvantage unless meaningful market access gains are realized. We urge the new administration to utilize all means available to return the United States to a competitive position, so that our industry can continue to serve this important international customer base and further expand our export opportunities.

UPDATE: On Nov. 11, 2017, the 11 remaining members of the TPP announced plans to move forward with a modified trade agreement. If this agreement, now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), is implemented without the United States as a participant, it will create significant tariff rate advantages for competitors of U.S. beef and pork.

The U.S. has free trade agreements in place with several CPTPP countries, but the major exceptions are Japan and Vietnam. Australia, Mexico and Chile already have economic partnership agreements with Japan, but the CPTPP would provide even more tariff relief for beef imported from these countries, and would lower tariff rates on Japan’s imports of Canadian and New Zealand beef. Japan’s beef import safeguards, which are administered on a quarterly basis for countries that do not have trade agreements with Japan, would shift to annual safeguards for beef imports from CPTPP countries, making them less likely to be triggered. Under Japan’s frozen beef safeguard, the tariff rate on U.S., Canadian and New Zealand beef was recently increased from 38.5 percent to 50 percent, where it will remain through March 31, 2018.

CPTPP would provide tariff relief for Canadian pork – the United States’ largest competitor in Japan’s imported chilled pork market. Pork from Mexico and Chile would also make market access gains beyond their current economic partnership agreements with Japan. Perhaps the largest breakthrough in the CPTPP’s pork provisions is Japan’s gradual elimination of tariffs on processed pork products – something Japan has never previously included in a trade agreement. While the European Union is not included in CPTPP, the EU and Japan are expected to finalize an economic partnership agreement by the end of 2017 or in early 2018, which includes similar terms. This would leave the United States as the only major pork supplier to Japan without a trade agreement in place.

UPDATE: On Jan. 23, 2018, The 11 remaining members of the TPP announced that they have reached an agreement in principle on CPTPP. The agreement in principle was signed at a March 8 trade ministers meeting in Chile.

UPDATE: On April 13, 2018, national news outlets reported that President Donald Trump has instructed U.S. Trade Representative Robert Lighthizer and National Economic Council Director Larry Kudlow to study the possibility of reentering TPP. President Trump commented on TPP in an April 12 meeting with farm-state lawmakers. In response to media inquiries, USMEF President and CEO Dan Halstrom issued this statement:

USMEF members strongly supported the TPP agreement that the United States signed in 2015 because of the significant market access gains it created for U.S. red meat exports – especially in Japan and Vietnam. In fact, our membership unanimously approved a resolution in support of TPP.

Beyond the specific benefits in Japan and Vietnam, rejoining TPP would strengthen U.S. economic ties with many of the other leading trading countries in the Asia Pacific region – which also would benefit the U.S. beef, pork and lamb industries. Therefore we are encouraged by President Trump’s directive to take a second look at TPP, and we look forward to hearing more from the administration on this issue.

UPDATE: In subsequent interviews, Trump administration officials lowered expectations about rejoining TPP, reiterating the administration’s preference for a bilateral trade agreement with Japan.

UPDATE: Mexico, Japan and Singapore have ratified CPTPP. Legislation to ratify CPTPP has also been filed in other participating countries’ parliaments. CPTPP requires six participants to complete ratification procedures, then the agreement enters into force after 60 days.