TENSIONS have flared over the Trans Pacific Partnership’s future (TPP) ratification in Australia as a potential threat to billions of dollars in global farm exports, heading into US President-elect Donald Trump’s inauguration on Friday US-time.
Mr Trump is set to take-over the US President’s office after his official swearing in ceremony in Washington DC, following his upset election last November, for the Republican Party.
While his campaign offered few material policy commitments for the US farm sector, outside of a hefty advisory committee, he did pledge to re-visit multilateral trade deals like the TPP to deliver greater domestic benefits for sectors like manufacturing.
Farm groups however remain anxious that the new US administration will follow through on its hard-line protectionist promises, given the 12-nation TPP delivers big cuts for tariffs that limit major agricultural exports like beef and dairy.
Mr Trump issued a statement on his core policy commitments shortly after the US election where he signalled the TPP would not be ratified, once he took over office.
“On trade, I am going to issue a notification of intent to withdraw from the Trans Pacific Partnership, a potential disaster for our country,” he said.
“Instead, we will negotiate fair bilateral trade deals that bring jobs and industry back onto American shores.”
Fears about the lack of priority for US agriculture in the new administration have also been heightened by Mr Trump’s failure to appoint an Agriculture Secretary to replace Tom Vilsack who held the role for the eight years of Barack Obama’s presidency.
The cabinet role oversees the powerful USDA – but leading into his inauguration ceremony it was only post in Mr Trump’s senior team, without a nominee.
The TPP’s negotiations were concluded in October 2015 between the US, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam but the historic trade deal is yet to be formally ratified; largely due to the prolonged US election.
According to the USDA’s summary of the agreement, the TPP grants new and enhanced market access for the US in Japan, Vietnam, Malaysia, NZ and Brunei; countries where the it currently doesn’t have a free trade agreement (FTA).
It also expands market access into Canada where the US already has an FTA.
But the summary says if the US fails to implement the TPP agreement, it would likely lose market share on farm exports to competing nations.
“Australia, Chile, Mexico, Vietnam and other countries already have preferential market access with Japan through their existing bilateral trade agreements,” the summary said.
“Additionally, the European Union is negotiating free trade agreements with many of the TPP countries.
“If the US does not ratify the TPP agreement, other TPP members such as Canada may ratify a similar agreement without us - the TPP agreement is necessary for US exports to remain competitive.”
The USDA said in the TPP agreement, countries had committed to provide “substantial market access” for US agriculture - where exports totalled more than US$133 billion in 2015 supporting more than one million American jobs - by either phasing out most tariffs (many immediately), enacting meaningful tariff reductions, or allowing a specific quantity of imports at a lower duty (generally zero) where tariff elimination is not possible.
For example, it said Japan’s 38.5 per cent tariff on fresh, chilled and frozen US beef would be cut by 77pc over 15 years and that country would also eliminate almost 60pc of its pork and pork product tariffs within 11 years and on nearly 80pc within 16 years.
The USDA said Vietnam’s tariffs on US beef, pork and poultry meat imports would be eliminated within five, 10 and 13 years respectively, while Malaysia and Vietnam would eliminate tariffs on rice immediately upon entry into force.
“For dairy products, Malaysia will immediately eliminate most tariffs and Vietnam will eliminate all tariffs within five years - Japan will eliminate many of its tariffs on cheese in 16 years and all tariffs on whey in 20 years,” the USDA said.
National Farmers’ Federation CEO Tony Mahar said his group was encouraged by the weekend’s discussions between Japan’s Prime Minister Abe and Australian Prime Minister Turnbull, surrounding the TPP.
Mr Mahar said the NFF particularly welcomed Mr Turnbull’s commitment to ratifying the deal; despite the uncertainty generated by the US election result.
He said the Joint Standing Committee on Treaties (JSCOT) recommended that Parliament ratify the TPP deal; in part because of the significant benefits it would deliver for Australian agriculture exports.
Mr Mahar said the TPP provided preferential arrangements, not available through the current Regional Cooperative Economic Partnership.
He said those benefits included; greater access for red meat to Japan, Mexico and Canada; higher quotas for Australian wheat and barley to Japan; a new quota access system for roasted malt exports; enhanced access for sugar to Japan and the US; the elimination of tariff in all TPP countries except Mexico for Australian sheep-meat; and elimination of tariffs in all TPP countries for raw wool and cotton.
“Trade is good for the economy – Australian agricultural exports are our second biggest industry - second only to iron ore,” he said.
“We must have bipartisan support for trade and any move away from this will be detriment to Australia’s national interest.
“We look forward to the Government’s progressing the ratifying the TPP in the 2017 Parliamentary year as a matter of priority.”
Yesterday, Opposition leader Bill Shorten attacked the Coalition’s support of the TPP’s ratification saying the government go was worrying about things they can't affect, like the TPP.
“Donald Trump, now President, has made it clear he's not going to ratify the Trans-Pacific Partnership, so why on earth is Malcolm Turnbull taking us down a frolic on a treaty which the Americans are never going to sign?” he said.
“We should be pursuing trade agreements - trade is vital to Australia as a trading nation - but why on earth Mr Turnbull wants to tee off his year on a trade treaty with Donald Trump who said that he's not going to sign it is beyond me.
“It is a waste of time.
“We can worry about what Donald Trump does or doesn't do, but in the meantime, we need to focus on Australian jobs.”
But Mr Turnbull said the government was committed to ratifying the TPP and would be talking to the other parties in the Senate in order to achieve passage of the legislation.
“As I discussed with the Japanese Prime Minister on the weekend, the Trans-Pacific Partnership is a very important element in continuing to build those open markets and free trade in our region,” he said.
“I know protectionism is popular in some quarters - I have seen Bill Shorten out there trying to turn himself into a protectionist.
“Really, Hawke and Keating would be ashamed, absolutely ashamed, of that type of populism.
“Let's be quite clear the big open markets, the big free trade agreements that the Coalition has delivered, have created and are continuing to create jobs right across Australia.”
Mr Turnbull said historically, American Presidents had campaigned against free trade deals like President Obama and President Clinton but then in office had generally supported them.
He said the 12 TPP countries had also given “active consideration” to how the TPP agreement can proceed, without the US or how to proceed pending the US making a decision.
“We all recognise we have a vested interest in continuing to support open markets,” he said.
“People can talk about protectionism as a global issue - and it's a big threat frankly to the global economy - but it's very clear right here in Australia our interest as Australians, as Australian hardworking families, is to have access to more of those big markets.”
Transport Minister Darren Chester said there was “no question” the TPP and providing stronger and open market access for Australia throughout the region was important to creating more opportunities to trade into the world.
“Prime Minister Abe has been in Australia this week meeting with Prime Minister Turnbull, and reinforced the need for our region to be open and providing that market access which is so important for growth, particularly in our regional communities,” he said.
“It is not for me to second-guess what President-elect Trump may do.
“It is in Australia’s interests to pursue these open trade policies, to pursue these open markets.
“I’m just surprised that Bill Shorten is giving up on Australian jobs, while we are working very hard to see this TPP ratified because we recognise the benefits it’ll provide, not just in our cities, but right throughout regional Australia.”
Greens SA Senator and trade spokesperson Sarah-Hanson Young called on Labor to end its “cat and mouse game over the TTP” and declare how the opposition would vote when the implementing legislation was ultimately presented to Parliament.
“Hiding behind Donald Trump is simply not good enough - instead of playing cat and mouse games, the Australian community needs clear and confident opposition to the big business trade deal, that if realised will leave ordinary Australians worse off,” she said.
Asked how his party would vote, Labor trade spokesperson Jason Clare said if the government introduced legislation to ratify the TPP, it would then go to Shadow Cabinet and “we’ll make a decision then”.
But he said the TPP was “”dead because Donald Trump has killed it”.
“The way this agreement works is unless the US ratifies the TPP, there is no TPP - there is no agreement,” he said.
“The real question here is, why is Malcolm Turnbull distracting the Parliament by introducing legislation to implement a dead agreement?”