Panel Discussion Examines TPP, other Key Trade Issues at Cattle Industry Summer Business Meeting

Thursday’s general session of the Cattle Industry Summer Business Meeting in Denver featured a panel discussion of several key trade issues that will greatly affect the future success of U.S. beef in international markets.

USMEF Senior Vice President for Trade Access Thad Lively was joined on the panel by Kent Bacus, National Cattlemen’s Beef Association (NCBA) director of international trade, and Bill Westman, senior vice president of international affairs for the North American Meat Institute (NAMI). The panel was moderated by longtime farm broadcaster Ron Hays, director of farm programming for Radio Oklahoma Network.

(from left) Ron Hays of Radio Oklahoma Network moderates a trade panel discussion featuring Thad Lively of USMEF, Bill Westman of NAMI and Kent Bacus of NCBA

Hays opened the session by recapping the tremendous setback the U.S. cattle industry faced upon confirmation of the first U.S. BSE case in December 2003. He noted that nearly all international markets closed to U.S. beef, but among the first to reopen were Canada and Mexico. This helped underscore the importance of the North American Free Trade Agreement (NAFTA), which eliminated tariffs and other trade barriers for U.S. meat entering these two key markets. The panelists noted that while NAFTA is often criticized, was very beneficial to the U.S. beef industry as it began the long climb back from BSE, and even with most markets now reopened to U.S. beef, Mexico and Canada are still among its top destinations.

Turning to the Trans-Pacific Partnership (TPP), Lively noted that the beef industry is one of the U.S. agricultural sectors with the most to gain from TPP, especially due to the tariff reductions offered in Japan.

“I personally never thought the U.S. would be in a position to have a trade negotiation that would permit us to bring down the tariffs that we pay on products entering Japan – that just seemed like something that would never happen,” Lively said. “Because of TPP, it has happened. And if you take that tariff – that tax – and drop it from where it is today at 38.5 percent and drop it to 9 percent, that’s going to make a huge difference. Japan is already our highest-value market, but there is great upside potential for future growth.”

The panel also noted that TPP offers significant tariff reductions for U.S. beef entering Vietnam, and that other countries such as Taiwan, Indonesia and the Philippines have expressed strong interest in eventually joining the agreement. But despite these benefits, gathering enough support for congressional approval of TPP is proving to be a formidable task. “TPP is something that the United States drove to its conclusion at the negotiating stage,” Lively explained. “If the other 11 TPP countries feel that this whole thing is going to fall apart because the United States is holding an election, that sends the wrong message to the rest of the world.” Adding a further sense of urgency for the beef industry is that fact that Australia – the primary competitor for U.S. beef in Japan and other key Asian markets – has already moved forward with a bilateral agreement with Japan, giving Australian beef a significant tariff rate advantage. With members of Congress preparing to return home for their August recess, Hays asked the panelists to give cattle producers a succinct message that might help convince legislators to support TPP. “I think we just need to be very clear – TPP is not President Obama’s trade deal, it’s our trade deal,” Bacus said. “This is about our jobs and our future, and we need you to support us.” The panelists also discussed the lack of progress in the Transatlantic Trade and Investment Partnership (TTIP) negotiations between the United States and the European Union. They noted that the chances of completing the TTIP talks by the end of President Obama’s term were already growing very narrow, and the referendum calling for the United Kingdom to the leave the EU could make this even more difficult. Efforts to regain access for U.S. beef in China was also discussed, as China is one of the few major markets that never reopened to U.S. beef following the 2003 BSE case. The panelists noted that this has been a top priority for U.S. trade and agricultural officials, but negotiations with China continue to suffer setbacks. Lively said despite these frustrations, it is important that the U.S. beef industry remains steadfast in its efforts to reenter China. “There is huge demand for beef in China and there is definitely demand for our product,” he said. “So we need to keep working at this, because this is a market that we definitely need to be in.”