Fed report predicts small benefits from TPP
May 19, 2016
USITC report predicts exceedingly small benefits for U.S. Beef Packers while failing to address impacts to the U.S. cattle supply chain
Billings, Mont. – Today the U.S. International Trade Commission (USITC) issued findings from its investigation into the likely impacts the proposed Trans-Pacific Partnership (TPP) free trade agreement will have on the U.S. economy and on specific industry sectors (the report). R-CALF USA actively participated in the USITC's investigation by submitting written briefs and delivering oral testimony during the USITC's hearing held in January. R-CALF USA was the only witness representing the U.S. cattle and sheep industries that opposed the proposed pact.
The report estimates that net exports of beef by year 15 of the pact will be only $457.1 million more than if the TPP was not implemented, with most of the increase attributable to Japan. Using data from the U.S. Department of Agriculture, R-CALF USA CEO Bill Bullard put this amount into perspective by explaining that the 2015 retail value of beef produced by a choice steer was $3,144.50, and it would take only 145,365 animals to produce the beef needed to achieve this estimated increase.
"This means that even under the USITC's overly optimistic estimate, the best our industry can hope for is that in 15 years we will market barely over one day's kill in additional cattle given that the U.S. is presently slaughtering approximately 120,000 cattle per day in U.S. slaughtering plants.
"This exceedingly small economic benefit does not outweigh the huge concessions our industry will be forced to make if the TPP is passed," Bullard said.
Bullard said the report fails to address the impact that the TPP will have on the U.S. cattle supply chain comprised of the nation's 729,000 remaining farmers and ranchers that raise and sell cattle. Instead, he said the report assumes that the small increase in net beef exports will trickle down to cattle producers.
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According to Bullard there is no justification for this assumption because the TPP grants multinational meatpackers their wish for lower cattle prices by destroying the competitiveness of U.S. cattle producers, prohibiting marketing claims that suggest U.S.-produced beef is safer and more wholesome, and eliminating the competitive forces that drive the U.S. cattle cycle.
"This is a corporate give-away," said R-CALF USA CEO Bill Bullard adding, "The TPP allows multinational packers to use a "Product of the USA" label on cattle sourced from anywhere in the world, which effectively ends all competition between U.S. cattle producers and their foreign competitors.
"The sanitary and phytosanitary measures contained in the pact ensure the U.S. cattle industry cannot make marketing claims that U.S. beef is safer and more wholesome without being subjected to costly and protracted World Trade Organization (WTO) complaints. This will have a chilling effect on the U.S. cattle industry's ability to compete with imports in the domestic market.
"To top it off, because the pact allows USA labels on beef from animals sourced anywhere in the world, multinational meatpackers can put an end to our competitive U.S. cattle cycle simply by sourcing cattle from other countries whenever they believe domestic cattle prices are too high or domestic cattle supplies too tight.
"Like NAFTA (North American Free Trade Agreement), the TPP will help multinational meatpackers capture even more control of the U.S. live cattle supply chain away from independent U.S. farmers and ranchers, relegating them to nothing more than a cog in the big meatpackers' global supply chain," Bullard concluded.