Today, the United States International Trade Commission hosted a hearing entitled Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors. Kevin Kester, National Cattlemen’s Beef Association Policy Division chair, testified before the ITC, stressing the importance of TPP for the cattle industry.
"We have a very mature market in the United States, but 96 percent of the world’s population lives outside U.S. borders," said Kester, a cattle producer from California. “With a growing middle class overseas demanding a higher quality diet, we need strong trade agreements like TPP in place to level the playing field and allow us access to those consumers who are asking for our product."
The TPP is multi-lateral trade agreement negotiated by the United States, Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, Japan, Canada and Mexico. The biggest advantage for cattle producers is the increased access to the Japanese market. In 2014, the U.S. exported beef worth $1.6 billion into Japan at a 38.5 percent tariff. Once TPP is implemented that tariff rate will phase down to 9 percent over 15 years, with a significant cut in the first year.
“This agreement grants the greatest market access for U.S. beef ever negotiated into Japan,” said Kester “Since Australia implemented their own bilateral trade agreement with Japan last year, the U.S. has lost five percent of the market share, about $100 million in sales, in Japan. We cannot afford to wait on TPP or we will continue to lose market share.”
The U.S. is already one of the most open markets in the world and the National Cattlemen’s Beef Association urges Congress to pass TPP swiftly. Of the more than 260 preferential trade agreements in force worldwide, only 14 include the United States. If the U.S. does not act to expand new market opportunities in these growing economies, cattle producers will be severely disadvantaged the global market place.
Source: National Cattlemen's Beef Association