October 8, 2015
Hello everybody out there in farm country. This radio commentary is brought to you by Monsanto, and John Deere. They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you.
And now for today’s commentary—
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.
If you would like to review my radio shows going back more than 20 years, just go on-line to http://www.johnblockreports.com Have .a great weekend.
Until next week, I am John Block from Washington, D.C.