There’s been a large amount of discussion surrounding TPP and how it will influence trade between the United States and other countries. Yet, still many don’t understand what this piece of legislation is other than a fun acronym our presidential candidates have been throwing out occasionally. It can be difficult to keep up with what this agreement entails and this is why I’ve chosen to blog about it. I want you to understand how it will have an impact here at home on those who produce our food.
What is TPP?
TPP is the acronym utilized referring to the Trans Pacific Partnership which is an agreement focusing on trade and investment between the United States and eleven other countries. They include New Zealand, Australia, Canada, Mexico, Chile, Japan, Malaysia, Peru, Singapore, Vietnam and Brunei Darussalam. If ratified TPP will help reduce barriers American farmers see in trade regarding the export market.
Why is TPP being considered?
The United States does already hold trade arrangements with six of the countries that would be part of TPP independent of this agreement. However, market access can be improved by negotiating better terms for those that we already do have trade agreements with and to initiate positive trade agreements in countries that would only be held via TPP. The Trans Pacific Partnership was something that the United States was formerly a part of until the agreement expired last October.
What barriers to trade exist?
International trade is something many of us don’t consider on a daily basis, however this does not change the fact that it does impact what is available on our plates each meal just as it does for people in other countries. There is a demand for American food products worldwide, specifically for animal protein. This is because we historically have a food system composed of people who are dedicated to providing high quality products that are known for being safe.
It is not uncommon for other countries to institute agricultural tariffs for the products they import from the United States which in turn affects demand negatively for those exporting. Tariffs are essentially a tax on a product. Tariff rate quotas can also have a negative impact on those wishing to export their product to another country as not only is there a tax on an item through a tariff but also a specific quota in which the country will choose not to import a specific product. When tariffs are especially high this can be difficult for those wanting to export. For instance, Japan has a tariff of 38.5% on beef currently but if the TPP agreement is signed the will decrease it to 9% over the next 15 years.
How will it affect farmers?
The Trans Pacific Partnership is an opportunity to have a positive impact in the lives of our farmers by further opening up markets so they can export more freely. The American Farm Bureau Federation estimates that net farm income will increase 4.4 billion. As farmers rely on the market to set the price for a commodity this will hopefully allow them to enjoy a larger economic advantage to continue to do what they love. TPP is also projected to create more than 40,100 new jobs in correlation with farming and ranching. This is huge!
Does TPP impact New Mexico?
It’s easy to see how TPP would impact agriculture from a national standpoint but it’s also important to note that it would have positive effects in our own state. Ratifying the Trans Pacific Partnership would provide 225 new jobs in New Mexico alone and as a college student getting ready to graduate this absolutely warms my heart. Each of those jobs in turn affects a family positively because they can provide a better life for themselves and those in those in their care. We have 155 dairy farms in the Land of Enchantment and this agreement if ratified would increase dairy cash receipts in our state by $9.6 million annually. There are approximately 6,800 beef and sheep producers in New Mexico and TPP would in turn provide an increase of beef cash receipts in New Mexico by $9.4 million annually.
I personally am in favor of ratifying TPP because of what I believe it can do for our farmers. Ninety seven percent of farms in the United States are family owned and operated and I am proud to have heritage that is a part of this long standing tradition. My grandfather and his family ranched in this great state and my grandmother grew up on a dairy. I know if they were still active in the agriculture sector would be absolutely thrilled that ratifying TPP would grant more access to dairy and ranch families to sell their products.
You can read more information about how TPP will impact farmers in the United States here.
Thanks for reading!