Economist: New trade agreements hard to achieve
February 17, 2014
SCOTTSDALE, Ariz. — New trade agreements could increase U.S. agricultural exports slightly, but are getting harder and harder to finish, a prominent California agricultural economist told the nation's crop insurers here this week as there were similar signals from Washington.
The Trade-Pacific Trade Partnership and the Trans-Atlantic Trade and Investment Partnership negotiations would both provide "marginal increases but increases all the same" to U.S. exports, said Mechel Paggi of the Center for Agricultural Business at California State University Fresno.
But he added, "You have to get real — trade agreements are a really hard sell here and in other countries."
Paggi also noted that the United States already has agreements with most of the countries in the TTP and that Japan would be a big potential market if it agrees to go against tradition and liberalize agriculture.
He also noted that agriculture is divided on trade agreements, and that the National Farmers Union and Ja Zenchu, the Japanese agricultural co-op, have signed an agreement that says they believe agriculture should be treated differently that other sectors in trade agreements.
Paggi said the biggest accomplishment of TPP might be its contribution to political stability in the region.
Recommended Stories For You
The European Union market offers potential for growth if the T-TIP succeeds, Paggi noted, but he added that the competition for the European markets will be intense.
Keith Collins, a former USDA chief economist who is now a consultant to the crop insurance industry, said on the same panel that trade offers "promise" because 95 percent of the world's population lives outside the United States.
But, he said, "The hope for multilateral trade negotiations has waned dramatically." Collins said he has learned how difficult it is to build foreign markets due to cultural resistance and "innate protectionism."
The current conflict with China over corn blocked due to concerns about biotechnology is an example, he said.
Meanwhile, in Washington there were signs that the prospects for President Barack Obama getting trade promotion authority this year to finalize these agreements are lessening.
House Minority Leader Nancy Pelosi, D-Calif., joined Senate Majority Leader Harry Reid, D-Nev., in expressing a lack of enthusiasm for trade promotion authority, at least as it is currently introduced.
Pelosi told a union rally Wednesday that she does not favor the trade promotion authority bill introduced by former Senate Finance Committee Chairman Max Baucus, D-Mont., and House Ways and Means Committee Chairman Dave Camp, R-Mich. She later told reporters that she supports Obama's trade agenda, but not Baucus-Camp as written.
Pelosi also said the administration should deal with currency manipulation.
Earlier this month Reid said he is "against fast-track," using the old term for trade promotion authority.
Reid, who is concerned about Democrats' chances in this year's mid-term elections, urged advocates not to push TPA "just now."
Baucus's departure to become U.S. ambassador to China, pending Senate confirmation, may also slow down consideration of TPA. Incoming Senate Finance Committee Chairman Ron Wyden, D-Ore., said this week that he sees no reason to move on TPA until he has had time to discuss it with his committee members, Washington Trade Daily reported.
–the Hagstrom Report