The fight for free trade has taken a leap forward:
The fight for open access for New Zealand farm exports into the United States has taken a big step forward, with key American agricultural lobbies giving their backing to a comprehensive Pacific Rim trade deal with no exclusions for agriculture.
Thirty-seven of the US’s peak agricultural and farming lobbies have written to their government pledging support for the TransPacific Partnership (TPP) free-trade talks, which aim to eliminate tariffs and other barriers to trade between 12 countries.
In a letter sent to new US Trade Representative Mike Froman and Secretary of Agriculture Thomas Vilsack, the industry groups gave their backing to US negotiators to pursue a comprehensive deal, with no exclusions for agriculture in any country involved in the talks.
“There must be no product or sector exclusions, including in agriculture. Exclusions would limit opportunities in each of the member countries to reach new markets, grow business and generate economic growth and jobs,” it said.
Importantly the letter was signed by the US Dairy Export Council and the National Milk Producers Council.
Both groups have in the past been sceptical about the US joining the TPP and have highlighted the threat to American farmers from opening their domestic market to competition from NZ exports. . .
This is very good news.
Agriculture has been one of the major sticking points for US support of the TPP.
Trade Minister Tim Groser said the backing from the US dairy industry could be critical in getting a deal past American lawmakers that included agriculture and therefore was beneficial to NZ.
“The political game here is pretty obvious. The way Congress works is through these sorts of letters and people add up the number of lobbies for and add up the number against and that is the political process under way,” Groser said. . .
Fonterra, with assistance from the NZ Government, is leading efforts to get industry groups in other TPP countries to send a similar letter to their governments.
Other countries in the talks include Singapore, Brunei, Chile, Peru, Australia, Vietnam, Malaysia, Mexico, Canada, and Japan.
If all countries agree to cut tariffs to zero the benefits to the NZ economy have been estimated to be as high as $2.1b by 2025.
We have a lot to gain from the TPP but so do producers and consumers in other countries.
Trade protection ultimately benefits the few at the expense of many and the few it benefits are principally politicians who buy votes with it and bureaucrats who are employed because of it.
There is still a lot of work to be done but the support of the powerful US agricultural lobbies is a very big step towards the goal.