Economic Tidbits

U.S. Withdrawal From TPP Costly

A report by the Purdue University Global Trade Analysis Project shows the President Trump’s decision to withdraw from the Trans Pacific Partnership (TPP) has cost the nation’s farmers and agricultural industries $1.8 billion per year in lost exports. The report also notes the other TPP participators have decided to move forward with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), giving several U.S. agricultural competitors better access to key export markets. Countries participating in the CPTPP will increase trade with each other and U.S. exports will suffer. The analysis shows the pork, poultry, and dairy sectors will be most impacted.

For Nebraska, the beef sector is most at risk from the U.S. not participating in the CPTPP. Competitors to the U.S. in Japan, the largest beef import market for the U.S., have a competitive advantage under the CPTPP. According to the Nikkei Asian Review, Japanese beef imports this year from the U.S. have increased 21 percent, but the U.S. share of the Japanese beef market has declined 6 percent. This is because Japanese imports of beef from Australia, Canada, New Zealand, and Mexico, participants in the CPTPP, have increased 56 percent.

If the U.S. were to join the CPTPP, it could boost U.S. farm exports by $2.9 billion a year according to the report. Dairy products would experience the largest gain, with exports increasing $1 billion. An analysis by the American Farm Bureau in 2016 showed Nebraska beef exports would have increased $139 million and pork exports by $45 million with U.S. participation in TPP. Similar positive benefits could be expected from U.S. participation in the CPTPP.    

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