TPP will toughen US beef industry and bolster trade with Japan

America’s beef industry has long called for TPP deal ratification to alleviate the pressure it faces exporting meat to certain countries, especially Japan, where it has to pay 38.5% in export duty. This has led to “intense competition​” with Australia over securing a monopoly on beef trade to one of the world’s largest economies.

The International Trade Commission report, published last week, concluded that TPP would improve the competitiveness of US beef, while also boosting America’s GDP by $42.7bn by 2032. Employment, too, would grow by 128,000 full-time employees once the deal was fully implemented, according to the report.

The quasi-judicial report also predicted that GDP could expand by $67bn once the fruits of a decade of TPP trade are enjoyed. 

Millions lost in tax​
 ​

The International Trade Commission (ITC) believes beef exports could be worth an extra $876m once TPP is fully implemented.

“Cattle producers rely on foreign markets and international trade to grow demand for high-quality US beef,​” said the National Cattlemen’s Beef Association (NCBA) president Tracy Brunner.

“These markets add value to every head of cattle raised and fed in the USA. In order to compete with other global beef-producing nations, we need the level playing field provided through TPP. US producers have already lost more than $140m in sales into Japan alone since 2015, due to their preferential trade agreement with Australia.​”

Import advantage​

The wide-ranging report, commissioned by US President Barack Obama, also confirmed poultry meat exports would most likely rise for the US, resulting in a slight import decrease. The rise in chicken imports would be driven by the growing Vietnamese market, with the report confirming its increased access here would “benefit​” the US.

For America’s meat industry, the main benefit of TPP is going to be the lower import tariffs it faces in Japan, with Australia enjoying a much lower tax rate.​

Beef exporters from Australia have the advantage of facing just a 29% tax duty on the meat products Japan imports, saving around 10% over exports to the US. This is due to the Japan-Australia Economic Partnership Agreement.

Estimates from the US Department of Agriculture’s Economic Research Service showed that, without TPP, exports of beef to Japan would drop by 8%.

TPP is a bold trade agreement, which those in favour say will herald new economic growth in the 12 countries involved.