TRANS-PACIFIC PARTNERSHIP Benefits to U.S. Agriculture

An article published on October 16th, 2015 by the United States Department of Agriculture, http://www.fas.usda.gov/sites/default/files/2015-10/tpp_details_alcohol_10-16-15.pdf, describes how the TPP will provide significant new market opportunities for United States exporters. The TPP will promote economic growth in the Asia-Pacific region, which will increase the demand for U.S. food and agriculture products. In specific, the TPP strengthens trade rules and provides new market access for US exports to Japan, Malaysia, Vietnam, New Zealand, and Brunei. Without the TPP, US alcohol exports to the TPP region face a competitive disadvantage and are subject to many duties and tariffs. The US exported $579 million of wine, $359 million of beer, and $539 million of distilled spirits to countries in the TPP region in 2014. Of that, the US exported $2.9 million in alcoholic beverages to Malaysia. Malaysia’s current import duties for wine range from $2.08-$25.58 per liter, for beer are $1.18 per liter, and for distilled spirits they range from $0.71-$22.04 per liter. Under the current agreement, all of the import duties for alcoholic beverages entering into Malaysia will be eliminated 16 years after the agreement is ratified. This could have a significant impact not only on the Malaysian and the United States economy, but also on all of the other countries that Malaysia imports their alcoholic beverages from.

What impact will this have on Malaysia’s economy? How will Malaysia’s domestic alcohol industry be affected by the TPP? Will the US and other countries have an opportunity to export significantly more alcohol to Malaysia?

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