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Ag Groups Welcome TPA Signing

President Barack Obama signed fast track trade legislation Monday that most farm groups hope will lead to lower tariffs on U.S. ag exports to Pacific Rim nations and Europe.

Obama signed two bills into law. One gives him Trade Promotion Authority (TPA) that allows the administration to fast track any trade agreements through Congress, with only up or down votes allowed with no amendments. The second law renews and expands the Trade Adjustment Assistant (TAA) program that offers training to workers displaced by trade agreements.

“The trade authorization that’s provided here is not the actual trade agreements,” Obama said at a White House signing ceremony. “So we still have some tough negotiations that are going to be taking place.  There has always been concern that people want transparency in those agreements -- under this authorization, these agreements will be posted on a website for a long period of time for people to scrutinize, and take a look at, and pick apart.”

The Obama administration is wrapping up negotiations on the Trans-Pacific Partnership (TPP), a trade deal most ag groups will likely back.

They, and everyone else, will finally get a look at the highly secretive TPP deal. The TPA law requires disclosure of any agreement 60 days before it’s signed and long before Congress votes on it.

“For the United States, TPP is potentially the biggest trade deal in decades,” said Floyd Gaibler, U.S. Grains Council director of trade policy and biotechnology. “The 12 countries that are involved account for 40% of the world’s gross domestic product,” Gaibler said last week after the Senate passed a final version of the bill. “A comprehensive, high-quality deal is critical for U.S. agriculture, which is a consistent leader in exports. An agricultural free trade zone encompassing much of the Pacific Rim also promises to be a powerful tool for projecting exports well beyond the circle of TPP signatories.” 

Other groups were also hopeful that the TPP deal and another potential agreement with Europe will spur trade of U.S. commodities.

“President Obama’s signature today opens the door to creating new trade partnerships around the world that will drive American business forward in the international marketplace,” said American Farm Bureau Federation president Bob Stallman.

“U.S. agriculture is ready for ambitious trade agreements that break down barriers to products grown and made in America, so our trading partners know we mean business,” Stallman said.

“TPA was a key priority for the American Soybean Association (ASA) in the 114th Congress,” the group said in a statement. “The bill gives the U.S. Trade Representative (USTR) the ability to get the best deal possible, and it provides Congress the oversight it needs to ensure every agreement will work for American farmers.”

ASA said hundreds of farmers had contacted their lawmakers in recent months over TPA.

The reality of a TPP could be modest, though, as computer modeling by USDA’s Economic Research Service (ERS) showed last year. 

ERS economists haven’t seen the Pacific trade deal, either. Instead, in 2014 they projected a best-case scenario. If the TPP eliminates all tariffs and quotas, it “will increase the value of agricultural trade among TPP countries by 6%, or about $8.5 billion” by 2025 over 2007, says the report, Agriculture in the Trans-Pacific Partnership.

U.S. ag exports grow 5%, or $2.8 billion. Japan will account for 70% of the ag trade expansion. U.S. commodities gaining the most will be cereals (1%), dairy (0.5%), and meat (0.4%).

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