TPP and Illinois Agriculture

Background

• TPP is an agreement between the U.S. and 11 Asian-Pacific Region nations accounting for 40% of the world’s economy and $36 trillion of the world’s GDP.
• The TPP will boost demand for U.S. agri-food products among the 500 million consumers in the 11 Asian-Pacific partner nations in the agreement.
• With some of the world’s fastest growing economies and populations, this dynamic region offers key access to other expanding Asian nations.
• Our competitors, including the EU, are increasingly active in the region. The TPP will help improve the competitiveness of U.S. farmers while improving strategic partnerships.

 TPP and Agriculture

•  Partners in the TPP currently import nearly 42% of all U.S. agricultural exports.
• U.S. agricultural exports to TPP nations totals around $63 billion.
• Foreign taxes/tariffs on U.S. agricultural exports to some TPP partners are very high. TPP requires our partners to reduce tariffs on U.S. agricultural and other exports.
• TPP partners also have non-tariff barriers not based on science that restrict our market opportunities – the TPP will eliminate those.
• Generally, the TPP agreement signed in February 2016:
  
  • Eliminates tariffs on a majority of U.S. exports of agri-food products.
  • Provides new market access through tariff reductions or preferential quotas.
  • Requires TPP countries to eliminate all agricultural export subsidies.
  • Discourages countries from imposing export restrictions on agri-food products as a means of protecting their domestic market from changes in the world market.
  • Ensures food safety, animal health and plant health measures are developed and implemented transparently and in a science-based manner based on risk.
  • Improves transparency in state traders of ag products to avoid trade distortion.
    

TPP and Illinois Agriculture

• 33% of Illinois farmer income is attributable to agricultural exports.
• Ag exports help support rural communities and promote job growth in Illinois and the U.S.
• Illinois agri-food exports to TPP nations are $3.9 billion annually supporting 29,000 jobs.
• When fully implemented, TPP will add
• $300 million/year to Illinois agricultural cash receipts
• $127 million/year in net agricultural exports from Illinois
• The TPP will help expand existing trade between Illinois and 6 current FTA partners, which will support economic and job growth in Illinois.
• Reduced tariffs on pork and beef and increased access for dairy and other products will enhance Illinois sales of those products (as well as of corn and soybeans) to the region.
• Market access for wheat will be improved and existing tariffs on products containing processed wheat (like cookies and crackers) will be eliminated.

Sources:  American Farm Bureau Federation, Business Roundtable, Illinois Farm Bureau, USDA and USTR.

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