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US Poultry Producers Outline Possible Economic Benefits of TPP

18 January 2016

US – US poultry producers used a US International Trade Commission (USITC) hearing last week to both express support for the Trans-Pacific Partnership (TPP) and to highlight mixed experiences with past free trade agreement negotiations.

National Chicken Council President Mike Brown, on behalf of NCC and the USA Poultry & Egg Export Council (USAPEEC), delivered testimony at a USITC hearing addressing the likely economic impact of the TPP on the US poultry sector, should the deal be fully implemented.

The TPP is a trade agreement between Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Viet Nam. Negotiations concluded last November, and now the agreement must be ratified by each country and, in the US, debated and passed by Congress.

Both NCC and USAPEEC have supported TPP, continuing 30 years of unwavering support for free trade and trade liberalisation initiatives. Though the US poultry industry has been in support of free trade, the industry’s experience with the results of free trade agreement negotiations has been mixed. During past negotiations, poultry has often been denominated a “sensitive product” and typically receives less-favourable access than other products.

US poultry exporters disappointed at lack of Canadian access

Mr Brown stressed that poultry once again faced mixed results in the TPP negotiations. “Our very frank assessment of the TPP provisions is that this agreement, on its current terms alone, will provide opportunity for moderate improvement for US exports of poultry products in three of the 11 markets,” Mr Brown said.

Mr Brown said a key point is the lack of meaningful increases in access for US poultry to Canada. “While virtually all other commercial sectors have been able to play the NAFTA game for the past three decades, US poultry has been relegated to the sidelines,” he added.

Under TPP, US poultry’s access to the Canadian market will only grow through small increases in quotas over a long period of time rather than truly free trade. “The TPP was the opportunity to correct a 30-year-old mistake, and very frankly, the results of this negotiation are disappointing in that regard,” Mr Brown told the commission.

Mr Brown also took the opportunity to thank USTR for its tremendous effort on behalf of all agriculture; especially its work in developing improved sanitary and phytosanitary (SPS) provisions. These could provide the initial boost needed to place more emphasis on SPS in all trade discussions.

As the 2015 outbreak of highly pathogenic avian influenza (HPAI) in the US showed, SPS barriers can cause great damage to trade. Though the HPAI detections were regional and contained, some trading partners placed bans on poultry from the entire US for much longer than justified, Mr Brown said. During the first 10 months of 2015, unjustified non-tariff trade restrictions cost the poultry and egg industry over $3.3 billion in lost income.

TPP gives improvements for US traders in some markets

Mr Brown also pointed out key moderate improvements afforded through TPP. “Our assessment is that TPP will allow us to make some modest inroads in Japan and hopefully in Viet Nam; but we do not believe the TPP, as currently negotiated, will provide our industry with any actual market access in Malaysia.”

The US exported $128 million of poultry and poultry products to Japan in 2014. Japan’s tariffs are currently as high as 21.3 per cent, or 48 yen per kilogram, whichever is greater (approximately 24.1 per cent ad valorem equivalent). Under the TPP agreement, tariffs on all poultry, eggs, and egg products will be eliminated in six to 13 years.

The United States exported $92.7 million of poultry and poultry products to Vietnam in 2014. Vietnam’s tariffs on poultry and poultry meat, currently as high as 40 percent, will be eliminated within 13 years. This includes tariffs on frozen chicken cuts and offal, which will be eliminated in 11 years.

Brown concluded, “We are wholeheartedly supporting TPP, as we did all the other free trade agreements and fully support passage and implementation by Congress.”

Brown’s full testimony as submitted to the USITC, which includes comments on turkey and egg exports, can be read here.

ThePoultrySite News Desk

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