The Effects of TPP on
Agriculture Trade
By: Solomon
Will TPP cut or adjust agricultural tariffs and quotas, and what are the positive and negative
effects of TPP on agricultural trade?
TPP will probably not adjust agricultural tariffs
and quotas significantly, because of the
unwillingness of major consumers to import too
much more than they produce for themselves.
Australia is having trouble exporting sugar
and cattle to the United States, because the
US is refusing to cut import taxes and quotas
Farmers in the United States have lobbied
against cutting import taxes, so in the final
phases of TPP, the US has been reluctant to
change regulations in the agricultural
division.
With the current rules, the United States produces
at least 85 percent of the sugar it consumes.
Obviously, this creates a lot of jobs and business
for the US, so it doesn’t have much incentive to
leave this deal. Australia, which believes in a
free-trade world economy with little to no
restrictions, only sells 87,000 tons of sugar to the
US. The US is not inclined to give up their quotas
and tariffs because of the benefit they give to the
US’s economy.
Some Americans, namely candy makers and
personal consumers, are supportive of TPP
and cutting tariffs because sugar that is
imported from foreign countries would be
cheaper, so the input costs for making candy
would be cheaper, and personal consumers
would enjoy cheaper sugar and possibly
cheaper candy.
According to a report from October 2014 by the
According to the report, getting rid of tariffs
Economic Research Service, writing for the
would have no, or very small, positive
USDA, the value of US agricultural exports will
effects on the members’ real GDP. The
be 5% higher in 2025 than they are now. Japan is
study suggests that the US real GDP will not
predicted to have 14% percent more value of
change under the current TPP rules. The
agricultural imports than they do now. The
increases are not supposed to be as a result
largest increases in value will be in the rice,
of more trading within TPP and less trading
sugar, and animal fats and oils.
to the rest of the world, but rather just more
trading worldwide.
Intra TPP trade will be increased most
The US should agree to the agricultural TPP
significantly in terms of meats, which will
regulations not because the regulations are
account for over 43 percent of the increase in
very beneficial, but rather because it will
trade. Agricultural output from the United States
help other countries agree with TPP, that has
will increase in most sectors, in particular cereals,
regulations that are helpful to the US.
dairy products, and meat.
Send Any Questions and Comments to Fricket@arps.org
Responses
6/14/15
Solomon: Great graphics! In terms of agriculture, aren't there real winners and losers in the US even if
overall US GDP would not change much? If so, how should we evaluate the effects? Is it OK if the sugar
producers lose and the meat producers win? Should it be all about which lobbyists are most powerful?
Or which employ the most workers, or realize the higher profits? It's a complicated story.
6/15/15
Can you clarify what you're saying in your conclusion (last box)? Be more specific, or give an
example for when you say, "but rather because it will help other countries agree with TPP" Why
will it help them agree?
6/15/15
How do changes in the meat market and growth in agriculture in
Japan/US relate to TPP?
I do not understand "The US should agree to the agricultural TPP
regulations not because the regulations are very beneficial, but rather
because it will help other countries agree with TPP, that has regulations
that are helpful to the US." Does this mean the US should agree to TPP
regulations because they benefit other countries without harming the
US? What is your justification for this?
Will the TPP have stronger effects on agriculture in developing Asian
(sugarcane-growing) countries? Will it help them export?
Oscar
6/15/15
Nice work exploring the potential impact in the sugar markets in particular. You might also
want to consider the long term implications of increased agricultural trade in light of climate
change. Will a more globalized food supply be more less resilient to the anticipated impact of
climate change?
6/15/15
The purple was a bold choice - nice! The text was very clear (even if in yellow), and the flow of
the page was very nice and easy to follow. I liked how the text and pictures generally switched
sides every row.
I'd like to challenge your first piece of evidence, as I found an article saying that Japan will
accept an unlimited amount of GMO food under TPP rules, which directly contradicts your
claim. If that wasn't what you meant, you should be a little more clear when you say tariffs and
quotas.
In terms of sugar and Australia - would a lack of sugar exports to the US be detrimental? Has
limited sugar trade been longstanding or is the TPP changing Australia's ability to export? Also,
how does Australia expect to make up for this lost opportunity?
According to your report, intra-TPP trade will have very few benefits for any country's economic
standing. Therefore, why do you suggest that the US accept the agricultural regulations and start
trading more? Is the US obligated to trade to other nations that can't develop as much
agriculture?
Ben
6/15/15
Solomon, this was a fun post, engaging and easy to read. However, it got
just a little confusing at the end when there were no pictures (I couldn’t
tell at first which order the boxes were in.
I am curious about the effect of a tariff on the US economy. In the third
box you say that the tariffs benefit the US economy. In the long term
couldn’t cutting tariffs cause more economic growth? What if we took
the cheap sugar and used the profits for growth in the long term?
You don’t mention the workers in the agriculture sector at all. Will they
lose jobs? Could the workers from the dying sugar industry move to the
growing meat industry?)
Jacob
6/17/15
Just a clarification for those who were confused about the
last paragraph. Even if TPP does not benefit the US in
terms of agriculture, TPP affects many other sectors of the
United States economy, which may be benefitted. If the
agricultural parts of TPP encourage other countries to
agree to terms of TPP, and TPP benefits non-agricultural
sectors of the United States economy, TPP is beneficial to
the US because it is not giving anything up in the
agricultural sector.
Jacoby—that may indeed be true, but it’s unlikely that the
profit will go into the hands of anyone besides the
corporation owners, who would not help boost the
economy, as they would just stuff the money in their
pockets and not spend.
Ben—TPP could change Australia’s exports, but the
statistics above are under the current rules and tariffs. So,
they are hoping the tariffs and quotas will be lowered
under TPP.
First Comment—if sugar tariffs are lowered under TPP,
American sugar manufacturers will lose. However,
opening up more trade with Canada and Japan will benefit
dairy farmers. This shouldn’t matter to the US economy
as a whole, only the individuals and the individual
corporations in these sectors.