Is the TPP nothing more than international TP?

The Trans-Pacific Partnership (TPP) will create the most powerful and lucrative trading bloc since the inception of the European Union. Or maybe not. To paraphrase Donald Rumsfeld, we should worry about the unknown unknowns, an awkward phrase that says a lot about blindly tap dancing across political mine fields. The TPP most likely will have a positive impact on America’s meat business and a negative impact on several other of our industries. Until we fully understand the fine print in the agreement which seems to have been written in invisible ink, we can’t be sure.

Until we can find a way to read that invisible ink, we will have to take the USDA’s Foreign Agricultural Service at its word. They have published these market benefits  – some taking as long as 10 years to fully materialize – for American produced meat products:

Pork

• Japan will eliminate duties on nearly 80% of tariff lines, including processed pork. Remaining tariffs will be cut and the “Gate Price” system significantly altered.
• Nearly all Malaysian tariffs will be locked in at zero percent.
• Vietnam will eliminate tariffs currently as high as 34% in five to 10 years.
• Brunei will eliminate all tariffs immediately.

Beef and veal

• Japan’s beef tariff, currently as high as 50%, will be reduced to 9%.
• Japan will eliminate duties on 75% of tariff lines, including processed beef products.
• Vietnam will eliminate tariffs currently as high as 34% in three to eight years.
• Malaysia will lock tariffs in at zero percent.
• Brunei will eliminate all tariffs immediately.

What made it imperative to the Obama administration was the opportunity to counter the rapid expansion of Chinese economic influences in the Pacific. Their growing power as a regional trading partner, coupled with recent military chest-thumping, made a pivot toward the East and away from our traditional focus on Europe mandatory. Over the next half century, the world’s economic center will slowly transition from London to Beijing.  The American economy will be forced to follow.

The tipping point for the U.S., though, was Japan’s entry into the Partnership. They are still the dominant economy in the region, at least for a few more years. Adding the expanded trading opportunities with that country to the markets offered by Canada, Mexico, Australia and seven other nations means we’re still sitting at the head table instead of standing out in the cold with our noses pressed against the window, tying to stave off economic frost bite.
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Read the full article on the Daily Herd.