Joining CPTPP Would Boost Pork, Ag Exports to Pacific Rim Region
Some six years ago, a dozen countries, including the U.S., signed the Trans-Pacific Partnership (TPP) trade agreement only to have then-President Trump withdraw America from the deal in January 2017, before it was ratified.
After more than eight years of negotiations, it was a big blow to U.S. agriculture, particularly pork, soybeans and wheat, which had been exporting increasingly more product to the Pacific Rim countries that made up the TPP. The trade bloc would have been the largest in the world, with 793 million consumers and 40% of global GDP. Compare that with the European Union’s 448 million consumers and 16% of GDP.
Not only did America’s farmers lament a lost opportunity but soon suffered lost market share in the region as other countries filled the void created by the diminished presence of the U.S. The EU, for example, quickly concluded trade agreements with Japan, Singapore and Vietnam and began negotiating deals – talks are ongoing – with Australia and New Zealand.
Those five nations, along with Brunei, Canada, Chile, Malaysia, Mexico and Peru recrafted the TPP into the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which the 11 countries signed in March 2018.
Now, other countries in the region, including Indonesia, the Philippines, South Korea and Thailand, are lining up to join the still-formidable bloc of half a billion people and $13.5 trillion of GDP. Even China is making rumblings about joining.
The U.S., however, largely has remained on the sidelines. It is considering talks on an Indo-Pacific economic framework and did recently negotiate market access deals with Japan and Vietnam. But tariffs on American goods going to those two countries are higher than they are for other CPTPP countries and nations that have free trade agreements with them, such as the EU and Russia.
That’s why the National Pork Producers Council, which was a leading agricultural voice in support of the TPP, calling it the “biggest commercial opportunity ever for U.S. pork producers,” is urging the Biden administration to join the CPTPP.
As an added incentive for the U.S. re-engaging, the Regional Comprehensive Economic Partnership took effect for 10 of its 15 member countries on Jan. 1, 2022. (The other five are expected to ratify the deal soon.) The China-led RCEP includes seven of the CPTPP nations and accounts for about 30% of the world’s population (2.2 billion people) and 30% of its GDP – the largest trade bloc in history.
A CPTPP that includes the U.S. could supplant the RCEP, reassert American hegemony in the Asia-Pacific and be the world’s de facto governing trade body, setting the globe’s trade rules. The benefits to U.S. exports would be significant. According to a 2016 U.S. International Trade Commission report on the TPP agreement – when the U.S. was part of it – it would create almost 128,000 American jobs and grow annual U.S. GDP by nearly $43 billion. U.S. agricultural exports would rise by about $7.2 billion a year.
It’s time for the U.S. to (re)join the CPTPP.
Maria Zieba is assistant vice president of international affairs for the National Pork Producers Council.
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