Which Canadian agricultural companies stand to reap big rewards from the TPP trade deal

An article in Financial Post (April 26, 2016) titled “Which Canadian agricultural companies stand to reap big rewards from the TPP trade deal” (http://business.financialpost.com/investing/which-canadian-agricultural-companies-stand-to-reap-big-rewards-from-the-tpp-trade-deal) discusses the Canadian economic sectors that will and will not benefit from the TPP, as well as analyzes the agricultural companies that are expected to gain the most from this commercial deal. 65% of the current agricultural exports are destined to TPP members, meaning that the reduction of tariffs associated with this deal is expected to increase additional demand from these trading partners. On the other hand, the TPP is expected to have a negative impact on sectors such as textiles apparel, chemicals and metal products. The National Bank Financial has reviewed the companies in the agriculture space and has concluded that the ones that should gain the most from the TPP include AGT Food and Ingredients Inc. (AGT), Input Capital Corp., Cervus Equipment Corporation and Rocky Mountain Dealership Inc. Will the benefits of the agricultural sector outweigh the tradeoffs that this commercial deal will represent to the Canadian economy?

Will the TPP Agreement Cost US Jobs?

An article in Voice of America (October 30, 2015) titled “Will the TPP Agreement Cost US Jobs?” (http://www.voanews.com/content/will-the-tpp-agreement-cost-us-jobs/3029372.html) describes the risk that TPP represents for the unemployment rate in US. The AFL-CIO Labor Unions blames the North American Free Trade Agreement (NAFTA) with the loss of approximately 700,000 U.S. jobs since the deal took effect in 1994. Barak Obama has promised that the TPP will be different from NAFTA, since it will improve workers’ standards by having enforceable mechanisms in countries like Vietnam and Malaysia. Some people discuss that the TPP is a betrayal to the American worker, while others highlight the advantages of this commercial deal for economic sectors such as agriculture.  How will the TPP impact the unemployment rate in the U.S? If the deal is approved what actions will be performed by the Central Bank to control such unemployment rate and its impact on the economy?

Potato Growers support TPP agreement

An article in Weekly Mailer (November 17, 2015) titled “Potato Growers support TPP agreement” (http://www.minicassia.com/news/article_568ee7aa-8c92-11e5-afc5-efc25b97446a.html) describes the main benefits that the TPP deal represents for the U.S. agricultural industry, especially the potato growers. The National Potato Council has urged the Congress to quickly complete the review of the TPP deal in order to approve it. Currently 20% of the potatoes produced in U.S. are exported. Over the last 10 years the potato exports have grown 56% and were valued at $1.7 billion in 2014. The commercial agreement includes tariff reductions that support the critical growth in exports of this relevant economic sector of the U.S. How will this increase in U.S. exports affect the agricultural industry of foreign countries?

Who wins and loses in 21st century trade agreement

An article in CNBC (November 13, 2015) titled “Who wins and loses in 21st century trade agreement” (http://www.cnbc.com/2015/11/13/who-wins-and-loses-in-21st-century-trade-agreement.html) describes the controversial TPP agreement that has opened the discussion about the main benefits and trade-offs that this commercial deal represents. Tim Brightbill, who serves as vice chair of the U.S. government administrated Industry Trade Advisory Committee on Services and Finance Industries, mentioned that the tech and telecommunications sectors are beneficiaries of the deal. The TPP text explains agreements that will remove barriers to entry in the global market for technological companies. Another winner in the deal is the U.S. agriculture, considering that the TPP agreement increases access for US products abroad. On the other hand, some analysts foresee problems in terms of currency manipulation as a consequence of the TPP. Will the benefits outweigh the costs of implementing the TPP agreement? Will this advantage for technological companies boost further innovation in the coming years?

 

US corn, grain groups still like Trans-Pacific Partnership

An article in Southeast Farm Press (November 6, 2015) titled “US corn, grain groups still like Trans-Pacific Partnership” (http://southeastfarmpress.com/grains/us-corn-grain-groups-still-trans-pacific-partnership) describes the benefits that the TPP provides to the agricultural industry. The National Corn Growers Association celebrates the commercial agreement, since it will provide farmers and ranchers greater access to the Asia-Pacific region that represents 40% of the world’s economy. The TPP agreement will increase U.S. agricultural exports, which besides increasing farm incomes also generates economic development in rural communities. What other industries will perceive the greatest benefits of the TPP agreement? Which economic sectors will face a downturn due to this commercial deal?

How TPP impacts agriculture?

The U.S. Trade Representative’s office said that the agreement would eliminate or significantly reduce tariffs on U.S. products and deter non-science based sanitary and phytosanitary barriers that have put American Agriculture at a disadvantage in TPP countries in the past.

http://farmfutures.com/blogs-how-tpp-impacts-agriculture-10276

President Obama said that TPP will enable sale of more products for agriculture. Currently over 18.000 taxes and tariffs on American products will fall and most of them even to zero. The US exports of agricultural exports to the TPP countries totaled $63 billion in 2014, 42% of the total agricultural products.

Vilsack said that agriculture is going to be a big winner with TPP, and overall it is estimated that US exports could increase to $130 billion making agriculture 9% of total exports. TPP will eliminate import taxes as high as 40% on U.S. poultry, 35% on soybeans and 40% on fruit exports. USDA has done an excellent job of compiling commodity benefits at www.fas.usda.gov/tpp-benefits-us-agricultural-products. For state-by-state benefits, visit www.fas.usda.gov/tpp-benefits-us-states.

The American Soybean Association said that the agreement will eliminate tariffs and other market access barriers and substantially increase access in remaining markets. They are optimistic that soybean products will fare well in the TPP agreement. In Japan, tariffs on soybean which is 13.2 yen/kg currently are eliminated within 6 years, 34% in Vietnam eliminated in 11 years and in Malaysia the 10% tariffs will be eliminated immediately.

Also, other products like corn and wheat will have duty free exports in the TPP countries like Vietnam, Malaysia and Japan in few years.

Demands for U.S. farm and food products will be boosted by TPP

The Trans-Pacific Partnership (TPP) will boost demand for U.S. farm and food products among nearly 500 million consumers in 11 countries across the Asia-Pacific region. By reducing tariffs and opening new markets for American agricultural products, the TPP will help increase farm income, generate rural economic activity, and support local jobs.

highlights

For more information please check-http://www.fas.usda.gov/sites/default/files/2015-10/washington_0.pdf