John Block: TPP

By former USDA Secretary John R. Block

After six years of negotiations with 11 Pacific Rim nations, the Trans-Pacific Partnership (TPP) trade agreement has been approved. Regulations will be harmonized and tariffs reduced. Trade will expand between the countries. The nations involved represent 40 percent of the global economy. That is huge.

However, it’s not done yet. Remember the “knock down drag out” fight in our Congress just to authorize the Obama Administration to negotiate the agreement. Now that it is negotiated, the Congress will be asked to pass it – (no amendments allowed) – take it or leave it.

Can this deal be sold to the Congress? There are a lot of skeptics. There are provisions in the bill that encourage countries to regulate tobacco. The U.S. tobacco industry is not happy about that. There was an effort to include rules to forbid currency manipulation. Countries push the value of their currency down to make their exports less expansive. But currency rules could not be agreed upon and are not in the TPP. Our dairy farmers and sugar farmers are not happy with the agreement. Environmental groups like the Sierra Club and some labor unions will oppose the deal.

On top of the above concerns, we hear the loud voices of Donald Trump and Bernie Sanders calling TPP a “disaster.” That whole process could become a political football.

But the critics may not win in the end. This agreement will open the door for a major expansion in agricultural exports. Just take Japan as an example. They currently have a 38.5% tariff on beef. The trade agreement pushes that down to 10% over a 10-year period. The door will be opened for more pork exports also. We will benefit, if we can tear down trade barriers.

President Obama has said that he wants to “pivot” to Asia. I say “yes.” Get away from the Middle East – that hopeless inferno. This agreement is far better than no agreement. Is it perfect? No, but it is a big giant step toward free and open markets.

The vote in Congress will probably be early next year. Stay tuned. We need to get this done.

John Block was Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill.  If you would like to review his radio shows going back more than 20 years, visit johnblockreports.com.

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