TPP Customs Provisions Would Improve Efficiency in Agricultural Goods Trade, Says Cutler

The Trans-Pacific Partnership (TPP) customs and trade facilitation chapter would ensure U.S. agricultural goods, including perishables, enter Asian-Pacific markets more efficiently and faster, said acting Deputy U.S. Trade Representative Wendy Cutler at a May U.S. Chamber of Commerce event on agriculture trade policy. The chapter has not been made public to date. The intellectual property chapter also seeks to protect agricultural trademarks, while the chapter on sanitary and phytosanitary (SPS) measures aims to guarantee transparency and accountability in SPS risk determinations, added Cutler.

Tariff elimination and reduction in partner markets would bolster such TPP rules provisions, along with others, said Cutler. “TPP also gives us an opportunity to negotiate increased access to dairy, poultry and eggs into Canada, products that Canada excluding from liberalization during the NAFTA negotiations,” said Cutler. “Agriculture market access in Japan is a critical part of the TPP negotiations. Japan is already a top market for U.S. agricultural products, ranking as our fourth largest overseas market in 2013.” The U.S. is continuing to negotiate TPP with the 11 other partner nations, as TPP ministers prepare to convene in Singapore from May 19-20.

The Japanese currently levy tariffs up to 778 percent on U.S. rice, while maintaining a complex pork import duty system and a complicated import license framework for dairy, said Cutler. But agriculture concessions continue to be a sensitive political issue for Japanese Prime Minister Shinzo Abe. “Agriculture has always been Prime Minister Abe’s most difficult political issue in the economics sphere,” said Cutler. “And members of his own party, as well as members in the opposition, have called upon them to refuse to negotiate tariff elimination.” Nonetheless, U.S. negotiators are working “around the clock” on TPP negotiations, and headway has been made with the Japanese, said Cutler. The two sides are negotiating market access for rice, beef and pork, wheat, dairy and sugar. The U.S. and Japan recently cemented dispute settlement provisions in bilateral negotiations on the automotive sector, said Cutler.

But despite the dedication of the Office of the USTR to pursue TPP and the Transatlantic Trade and Investment Partnership, the Obama administration remains in a trade policy “stupor,” worsened by nationwide political “inertia,” said Rep. Charles Boustany, R-La., also speaking at the event. “We’re caught in gridlock. We have an administration that has given lip service to how important this is but we have not seen the follow through,” said Boustany. “We have to get Trade Promotion Authority done … the trade priorities act of 2014. It’s a good bill. We need to get our troops marshaled around that and push Harry Reid in the Senate to make this happen.”

Democrats in both chambers, including Senate Majority Leader Harry Reid, D-Nev., and House Minority Leader Nancy Pelosi, D-Calif., in recent months rejected the Bipartisan Congressional Trade Priorities Act of 2014 (see 14013025). About 50 House Democrats need to vote for the bill in order to counteract far-right opposition, said Boustany, echoing earlier statements made by Speaker of the House John Boehner, R-Ohio. Bipartisan support for Trade Promotion Authority is also necessary to illustrate commitment to trade partners, said Boustany.

The Obama administration and many members of Congress remain intent on securing comprehensive tariff elimination in TPP negotiations. Boustany said, however, sugar will not be on the table in TPP, because the deal does not include top global producers. The U.S. needs to pursue a global strategy to address sugar in order to prevent countries like India from flooding markets in the event the tariff-rate quota (TRQ) system is removed. “I think they would be willing to get away from the tariff-rate quota system if we had a level playing field where these countries are not heavily subsidizing their sugar production at the expense of our guys,” said Boustany. “Trying to put it on the table with TPP is not a satisfactory solution at this point. We need a more global arrangement on the sugar piece.” Mexican sugar dumping recently forced TRQ countries out of the U.S. market, according to some critics of the Mexican sugar industry. -- Brian Dabbs