THE TTALK QUOTES 

On Global Trade & Investment

 

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No. 15 of 2015 

WEDNESDAY, MARCH 4, 2015      

 

   

Filed from Portland, Oregon  

     

Click here for yesterday's quote from Prime Minister Abe of Japan.
GIVE US TPA - A PETITION FROM PORK PRODUCERS

"...TPP is the most significant commercial opportunity ever presented to the U.S. pork industry and can be expected to generate over 10,000 jobs in the U.S. pork industry alone."

The National Pork Producers Council
And the Pork Producers Organizations of 39 States,
including Oregon
March 4, 2015

CONTEXT
Earlier today, America's pork producers sent a letter to Congress - to each of the 435 members of the House of Representatives and each of the 100 Senators - urging approval of Trade Promotion Authority (TPA) legislation.  TPA is seen as the gateway to the benefits of the next big American trade deal, the Trans-Pacific Partnership.  The essence of the letter was that not just pork but American agriculture writ large needs TPP.  Here is the opening paragraph:

"On behalf of U.S. pork producers, we are writing to express our strong support for Trade Promotion Authority (TPA).  Since 1989, when the United States began using bilateral and regional trade agreements to open foreign markets, U.S. agricultural exports have nearly quadrupled in value and are now valued at a record $152.5 billion (fiscal 2014).  During that period, earnings from U.S. agricultural exports as a share of cash receipts to farmers have grown from 22 to 35 percent."

Today's quote points out how much TPP could add to that in just one sector, namely pork.   We should point out that the writers of the letter give credit for the jobs estimate to Dermot Hayes, an agricultural economist at Iowa State University.

TPP and TPA.  The TPA-TPP relationship is well known to the readers of these pages, and we will not spend much more time on it.  Our brief summary of the connection is this: 

Article 1, Section 8 of the U.S. Constitution gives Congress the power "To regulate Commerce with foreign Nations."

In addition to the famous promise of an up-or-down vote, a TPA bill would embody Congress's instructions to the Executive Branch for negotiating the next trade agreements, starting with TPP.

Finally, this is one of those situation in which perception is reality, and TPA is perceived as an absolute, sine-qua-non precondition for TPP.  As Senator Majority Leader Mitch McConnell (R-KY) put it recently,

"We all know that without trade promotion authority there will be no trade agreement, and a trade agreement is obviously in the best interest of our country."

The Oregon Connection.  We took note of the fact that one of the signatories to the pork producers' letter was the Oregon Pork Producers.  We did so because the TPA spotlight is now on Oregon or rather on Oregon's senior Senator, Senator Ron Wyden (D).  Senator Wyden is the ranking member of the Senate Finance Committee, and the effort to produce a TPA bill supported by Senator Wyden and the Committee chairman, Senator Orrin Hatch (R-UT), seems to have stalled, at least for the moment. 

That's a problem.  Senator Wyden's support is seen as essential to any TPA bill with a hope of making it to the President's desk.  That's why, for example, Senator Tester (D) of Montana-a state that lives on its agricultural exports--has described Senator Wyden as "the most important person in the [Democratic] caucus on this issue."  And that may be an understatement.  Our understanding is that Senator Wyden wants a TPA bill that would give Congress the option of not applying TPA rules to a completed agreement. For Senator Hatch that's a bridge too far. 

COMMENT
We have four.

First, A Senate Compromise.  Our impression is that Senator Wyden is extremely popular in Oregon and with good reason.  He says he believes deeply in trade and wants more of it.  And there is no reason to doubt that.  The National Association of Manufacturers has on its website a factsheet on Oregon and trade.  That tells us that exports contributed some $15 billion to the Oregon economy in 2013 and supported 71,000 Oregon jobs.  

Oregon needs trade, and we hope the leaders of the Finance Committee-Chairman Hatch and Ranking Member Wyden-can produce a TPA bill that will win a majority in both houses. 

Second, TPA an U.S. Trading Partners.  But there are other issues.  One is the question, will America's trading partners demand TPA legislation before putting their best offers on the table?  Perhaps.  Some of the evidence is hard to analyze.  In one recent report, a Japanese negotiator was credited with saying that Japan is not requiring the U.S. to have TPA first but would very much prefer it. 

The standard and largely compelling argument is that the U.S. won't get her trading partners' best offers unless those partners have some assurance that Congress won't try to pick the deal apart.  That's the context in which we read the Japanese negotiator's comment, and on that score, it seems credible.  Japan might indeed be willing to move forward even without TPA.  That scenario is plausible because so much of the hoped for deal with Japan has to do with agricultural reform, and agricultural reform is very much in Japan's interest.  For Prime Minister Abe, it is a priority.
 
However, with so many members of Congress now wanting so much from TPA-from currency provisions to non-application language-trading partners may be thinking about the potential threats of TPA as well as its assurances.  After all, TPA may be the gateway to TPP but an overzealous TPA could also be a poison pill.

Third, The Grand Debate.   The beginning of the U.S. Bill of Rights, the sacred First Amendment, guarantees the right of the people "to petition the Government," and right now, everyone is doing just that.  The AFL-CIO and associated unions weighed in with a major anti-TPA letter on Monday and lots of activity on Capitol Hill.  It should surprise no one that getting TPA introduced, much less passed, is taking longer than expected. 

Fourth, Don't Give Up. 
The trick is not to give up.  And for those who need a little inspiration, we offer the final two observations:

First, from Peter Friedmann, the Executive Director of the Agriculture Transportation Coalition:

"There is nothing we produce in agriculture or forest products in this country that cannot be sourced somewhere else in the world."

If America somehow fails to reap the advantages of TPP, then those advantages will go to other actors through other agreements.

And for people who think trade legislation has become impossible, consider the inscription on the Seabees memorial in Arlington, Virginia, which reads in part:

"With willing hearts and skillful hands, the difficult we do at once.  The impossible takes a little longer."
SOURCES & LINKS

From America's Pork Producers is a link to  the March 4 letter to Congress from the National Pork Producers Council and 39 state pork producers association, which was the source for today's quote. 


The Wyden Question is a link to a New York Times story that highlights how important Senator Wyden is to the process of developing TPA legislation. 


McConnell's Hopes is a link to the article from The Hill with the above quote from Senator McConnell.  


Editor's Note.  We recognize that in one respect this statement is ambiguous.  It is not clear whether the Majority Leader was saying there will be no TPP without TPA because our trading partners won't allow it or because Congress won't.  Politically, the ambiguity is important.  For exporters, it is irrelevant. 


Oregon and Trade takes you to the NAM fact sheet mentioned above. 


Friedmann and America's Competition is a link to the TTALK Quote of January 28, which includes this quote from Peter Friedmann, not as the quote of the day but in the body of the entry. 


TPP, TPA and Japan is an AP story that discusses the link between these three entities and includes the thought ascribed above to a Japanese negotiator.  


Abe on Agriculture takes you to yesterday's TTALK Quote on this topic. 


The Seabeas Memorial is the Wikipedia entry on this memorial.  Seabeas - the name derives from the letter CB - are the United States Naval Mobile Construction Battalion, and they are famous for taking just a little bit longer to do the impossible.  

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