The Trans-Pacific Partnership (TPP) (03312016)
The Trans-Pacific Partnership (TPP) is a free trade agreement (FTA) negotiated among twelve countries: Australia, Canada, Japan, Mexico, New Zealand, Singapore, Peru, Chile, Brunei, Vietnam, Malaysia, and the United States. According to the Office of the United States Trade Representative (USTR), the TPP agreement seeks to bring new and effective market opportunities for American goods and services exports. The benefits of the TPP will occur through a combination of tariff reduction, tariff elimination, and new tariff rate quotas (TRQS). TPP has the potential to benefit American farmers and ranchers by supporting stronger commodity prices and increasing agricultural exports, which currently represent about 20% of all farm income in the U.S., in a region that represents about 40 percent of world GDP and has nearly 500 million consumers.
The TPP agreement will increase market access for U.S. agricultural products in countries not currently having an FTA with the U.S. (Japan, Vietnam, Malaysia, New Zealand, and Brunei), while enhancing market access in countries with established FTAs (Australia, Canada, Chile, Mexico, Peru, and Singapore).
The value of U.S. agricultural exports to the 11 TPP countries in 2015 equaled $57.2 billion, or 43% of all U.S. agricultural exports ($133.0 billion) (see Table 1). Canada is the top market for U.S. agricultural products with $20.9 billion, or 15.7% of U.S. agricultural exports in 2015.
Despite significant access barriers, Japan is already the fourth largest value export market for U.S. agricultural products, reaching a value of $11.2 billion or 8.4% of all U.S. Agricultural exports in 2015. According USTR, after TPP implementation, more than 50% of U.S. agricultural products (by value) will be exported to Japan duty free.
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