Don’t Judge a Trade Agreement Before it is Negotiated
Jul 17, 2014
By Bill Horan: Rockwell City, Iowa
The Japanese call their country the "Land of the Rising Sun." Unfortunately, there are some people in the United States today who want the sun to set on trade talks with Japan before they’ve even had a chance to shine above the horizon.
This is a mistake. Nobody should reject a trade agreement they haven’t seen.
The current trouble involves the Trans-Pacific Partnership, whose latest round of ongoing talks wrapped up last week. TPP is a promising but complex negotiation that includes the United States, Japan, and 10 other Pacific Rim countries with a combined population of nearly 800 million and a total GDP of about $28 trillion. TPP nations account for about 40 percent of global trade.
At a time when the World Trade Organization warns that many countries have done more to protect their economies from competition than to open them—this was the main point of a report issued last month—the United States must push in the opposite direction, negotiating free-trade agreements that create more trading opportunities not less. Our economy may be sluggish, but we need foreign markets: Exports have driven about one-third of U.S. economic growth in recent years.
The more we trade, the more we prosper.
TPP is ambitious: "The breadth of its agenda is beyond that of any major trade negotiation ever conducted," wrote Clayton Yeutter, a former U.S. Secretary of Agriculture and U.S. Trade Representative. Talks began several years ago and they’ve already made important progress on a variety of fronts, from intellectual property to environmental regulations. It may be possible to have an excellent agreement by the end of this year.
Yet the negotiations are not complete, and a few of the really tough parts still remain on the table. The toughest of all may be Japan’s determination to protect its inefficient but politically potent agriculture sector.
Some U.S. farm groups have urged the Obama administration to exclude Japan from TPP unless it agrees to lower its food tariffs to zero. In the Capitol South Metro Station in Washington, D.C.—the subway stop that serves Congress—a poster features a picture of railroad cars. "This train doesn’t stop for one nation," it says. "Japan must accept zero tariffs or jump off."
This is a worthy goal. Under zero tariffs, the Japanese would benefit from lower food prices and greater consumer choice. American farmers would enjoy millions of new customers for beef, pork, wheat, and dairy products.
Yet we can’t let the perfect become the enemy of the good.
Japan simply may refuse to accept the complete elimination of tariffs. At the same time, our trade diplomats may win important concessions—including concessions that set Japan on a course that could achieve zero tariffs over time.
In other words, it’s possible to imagine a historic deal in which Japan opens its markets to more competition than ever before, but at the same time fails to meet an unrealistic though laudable goal.
I’m confident our trade negotiators understand that zero tariffs are an excellent objective. At the same time, their critics must accept that something short of zero tariffs could represent a good result that helps American farmers and businesses.
The wisest course right now is to impose a moratorium on criticizing the TPP talks. Many of us share the same principles, wanting an agreement that allows as much trade as possible. Now we should let our trade diplomats go to work. When they’re done, we can debate the results—and accept or reject TPP as we see fit.
Until then, let’s not attack an agreement we haven’t even seen. It’s like judging a harvest in the spring rather than the fall.
And while we are doing that, the lawmakers in the U.S. Congress must focus their energies on the one thing they can to do help TPP right now: They should approve Trade Promotion Authority, allowing Congress to hold up-or-down votes on trade deals. This would send a powerful signal to the "Land of the Rising Sun" that we want TPP to soar high and shine brightly.
Bill Horan grows corn, soybeans and other grains with his brother on a family farm based in North Central Iowa. Bill volunteers as a board member and serves as Chairman for Truth About Trade & Technology (www.truthabouttrade.org).
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