Attempting to Understand Trans-Pacific Partnership

tpp-made-in-america-logoMany voices in agriculture support TPP, but presidential candidates oppose it. Why?

Contentious issues involve agriculture, intellectual property and investments. GOP nominee Donald Trump has claimed the document is 5,600 pages long. I do not know if he is correct, but it is certainly a lengthy document with all of its annexes and side letters. It is incredibly complex, and on this point, Trump is absolutely correct.

Another aspect of TPP which concerned many parties was how the document was negotiated in secrecy.

The TPP can be found on the webpage of the Office of the United States Trade Representative (USTR). There you will find the TPP’s text which numbers 30 chapters describing general definitions, market access issues, tariff commitments for the 12 nations and identifies specific items which were negotiated. There are chapters on Textiles and Apparel; Customs Administration; Trade Remedies; Cross Border Trade and Services; Telecommunications; Transparency and Anti-Corruption…this listing goes on for 30 chapters. No chapter on agriculture. For the majority of these chapters there is simply a summary.

At the end of the 30 chapters there is a section entitled Annexes. There are four Annexes of which two have an interesting title of “Non-conforming Measures”. This raises interesting questions and curiosity.

State-owned enterprises
Annex IV deals with state-owned enterprises. The Index goes on to identify “Related Instruments”. Under related Instruments, for the first time the word “agricultural” is used involving a U.S.-Canadian letter dated February 4, 2016. This letter is an agreement between U.S. and Canada involving a litany of commitments involving customs’ tariff schedules applying to dairy, poultry, egg products and sugar which may be traded between each nation.

At the end of the letter, there is another Annex which is not decipherable and presumably includes a series of numbers relating to tariffs. One can easily see why presidential candidates such as Trump might have some suspicions regarding the TPP document.

The USTR webpage claims “The TPP levels the playing field for American workers and businesses, leading to more Made-In-America exports and more higher-paying American jobs here at home.” It also claims 18,000 different taxes have been put on by countries on American products. It says “TPP makes sure our farmers, ranchers, manufacturers, service suppliers, and small businesses can compete – and win – in some of the fastest growing markets in the world.”

This of course makes sense when it is observed that 95% of the world’s consumers live outside our borders. I do find it curious there is no agriculture chapter or timber chapter but there is a separate chapter for Intellectual Property, Environment, Government Procurement, and Electronic Commerce. You get the idea.

There is a chapter on Sanitary and Phytosanitary (SPS) Measures, and it claims the new TPP measures “…gives American farmers and ranchers a fair chance to feed the region’s people; ensures that America’s food supply remains among the safest in the world; and helps all TPP partners…”. A chapter overview of this section claims there are new rules which will help ensure science based SPS measures are used in a transparent, predictable and nondiscriminatory manner. Without being able to read the chapter in full, the Summary suggests that each nation will undertake risk assessments and risk management measures that are not more trade restrictive ”…than are required to achieve the country’s appropriate level of protection.”

The chapter goes on to indicate SPS measures will be transparent and each country will commit to explaining their measures to all the parties. The chapter also promotes the use of audits to assess the adequacy of each country’s food safety regulatory program and to determine if it is consistent with the U.S. approach. Finally, there is a dispute settlement mechanism. Clearly if the SPS section eliminates duplicative and unnecessary testing requirements, that would be positive for the American farmer and rancher. There is nothing in the summary document on TPP to provide assurance these wonderful ideas will be implemented.

Next week I will examine the Annex II Tariff Commitments agreed to by Canada, Chile and Japan.

(This article first ran in Farm Futures on July 25, 2016)
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About Gary Baise

Gary Baise is a Virginia resident and an Illinois farmer. Specializing in agricultural and environmental issues, he also serves as outside General Counsel for the U.S. Grains Council, Agricultural Retailers Association, and National Sorghum Producers.
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