Trans Pacific Partnership Gives Momentum to Other Trade Agreements

January 26, 2014 04:53 PM

Progress and passage of the Trans Pacific Partnership (TPP) is not only critical to advancing U.S. trade interests in and of itself, it might be the lynch pin to jump start other trade negotiations with the European Union and even China.

The TPP trade talks involve Pacific Rim nations including the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Ambassador Ron Kirk, the former U.S. Trade Representative under President Obama who negotiated deals with South Korea, Columbia and Panama, says TPP passage puts pressure on other countries to move forward with deals of their own. He spoke Sunday as the opening "Chairman’s Lecture" at Dairy Forum 2014 here in Palm Springs, Calif.

Before TPP passes, Congress must first pass Trade Promotion Authority, which forces Congress to vote up or down on trade agreements without amending them. Failure to pass such authority means no other country would conclude trade agreements with the United States. "There’s been more misinformation about trade promotion authority on the internet than anything else," says Kirk.

With Trade Promotion Authority in hand, Congress has never failed to pass a trade agreement, says Kirk. Even the North American Free Trade Agreement, which was highly controversial at the time, passed by one vote, he notes. It has proved to be a tremendous trade asset, with Mexico now the number one market for U.S. dairy exports.

And with 15% or more of U.S. milk solids now being exported globally each month, it’s critically important for dairy farmers, processors and their employees to understand the importance of trade. "Employees need to know how much of their production is dependent on trade," Kirk says.

Once the Trans Pacific Partnership passes, it puts added pressure on both the European Union and China to negotiate better terms of trade. Neither wants to be left behind, says Kirk. China, for example, must create 30 to 40 million jobs annually to keep its burgeoning population and rising middle class employed. And they won’t be able to do that with low-wage jobs making t-shirts or sandals.

Kirk believes passage of TPP is possible yet this year, though it won’t come in the first quarter of 2014 as some had predicted. "There’s a pretty good chance of getting it done," he says.

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