US cattlemen: TPP vital to reach world’s middle class

NCBA policy division chair and California cattle rancher Kevin Kester spoke on behalf of the US International Trade Commission on Thursday 14 January to stress the benefits of the TPP​ free trade agreement.

And after it was announced the 12 members of the TPP deal hoped to sign a document in February​ to verify the wording of the historic trade deal, focus has now shifted onto how states can capitalise on the deal.

Beef is an industry that can make significant inroads once the TPP deal has been finalised.

In 2014, the US exported $7.13bn worth of beef, according to data from the US Meat Export Federation, but demand for American beef keeps rising.

Level playing field ​

“We have a very mature market in the US, but 96% of the world’s population lives outside US borders,​” said Kevin Kester.

“With a growing middle class overseas demanding a higher-quality diet, we need strong trade agreements like TPP in place to level the playing field and allow us access to those consumers who are asking for our product.​”

The global middle class is expected to hit 3.2bn in 2020 and climb to 4.9bn by 2030, according to data from the Organisation for Economic Cooperation and Development (OECD).

A rich market​

Japan, with an economy that grew by 1% in the third quarter of 2015 and a burgeoning middle class, represents a rich market for US beef exporters. In 2014, the US exported approximately $1.6bn-worth of beef into Japan, but was hit with a hefty tariff of 38.5%. Once the TPP pact is implemented, tariffs on beef exports will be gradually reduced over a period of 15 years.

“This agreement grants the greatest market access for US beef ever negotiated into Japan. Since Australia implemented its own bilateral trade agreement with Japan last year, the US has lost 5% of the market share, about $100m in sales, in Japan. We cannot afford to wait on TPP or we will continue to lose market share,​” added Kester.