BILLINGS – Montana farm groups are holding onto hope that Congress will pass that Trans Pacific Partnership before President-elect Donald Trump takes office, but things aren’t looking good for free trade.
“You've read all the same reports I have from congressional leaders – many saying TPP won't be considered now until Trump gives direction,” said Lola Raska of Montana Grain Growers. “He has been very vocal about his opposition and interest in renegotiating the deal.”
The Montana Farm Bureau Federation said it also is pressing its members to continue lobbying the state’s congressional delegation for a TPP vote.
For years, Montana’s largest farm groups have urged ratification of the 12-nation TPP. Those trade partners currently buy $814 million worth of Montana merchandise annually, with petroleum and coal products topping the list.
More than 80 percent of Montana’s wheat is also sold to TPP nations in the Asia-Pacific region, including Japan, which is also a top-five consumer of U.S. beef. With more than $3 billion in annual sales, agriculture is Montana’s largest private economic sector.
However, none of Montana’s congressional delegation has committed to voting for the trade deal. Heading into the post-election lame duck session, all three lawmakers were declaring the TPP dead.
“Senator McConnell runs the floor and he has said loud and clear that TPP isn’t going anywhere this year, and President-elect Trump has repeatedly stated that he is going to scrap it when he takes office in January,” said Sen. Jon Tester, D-Mont. “But I’m going to continue to work to ensure that Montana producers and workers get a fair shake if Republicans and Democrats come up with a path forward.”
In the days leading up to the election, the office of the U.S. Trade Representative said it was hopeful TPP would be taken up during the lame duck session. Taking up the trade agreement this year would mean having the debate while President Barack Obama is still in office. TPP was crafted during the Obama administration. The U.S. Trade Representative also had concerns about how the agreement would be supported by the next president, regardless of who won Nov. 8.
Both President-elect Trump and his Democratic opponent, Hillary Clinton, had said they opposed TPP, at least as written.
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The other concern behind getting the TPP passed, said Ambassador Darci Vetter, USTR’s chief agricultural negotiator, was timing. While TPP stalled in the United States, China advanced its own trade policies, the Regional Economic Partnership and the Free Trade Area of the Asia Pacific.
Those China-led trade policies could set the table for trade talks in the Asia Pacific, becoming the foundation for any trade agreements the United States pursued bilaterally with would-be TPP nations.
And bilateral agreements would be needed, Vetter said. There’s a misconception among TPP opponents that not passing the TPP would mean keeping trade agreements as they are. But the United States is in need of new agreements with several TPP members.
Australia, which is one Montana’s biggest competitors for wheat sales in Japan, has already renegotiated tariffs lower than current tariffs on U.S. grain products. There’s concern that an agreement between Japan and China, which has a glut of wheat, would erode U.S. sales to Japan.
“We are very concerned about China leading other Asian countries in a deal that excludes the U.S.,” Raska said. “They have a lot of wheat stockpiled right now, adding to the current world glut, and, with better trade provisions, could out-compete us in Montana's most important markets.”
The U.S. House of Representatives hasn’t had the will to pass the TPP, said Rep. Ryan Zinke, R-Mont. Conditions aren’t likely to change in the last two months of the year.
“There’s just not enough votes in the House for it and there’s some fundamental issues on it that need to be addressed,” Zinke said. “It can be renegotiated fairly quickly because we’re the power in that and no one wants to see China, especially our allies in the region, have a dominance.”
U.S. Sen. Steve Daines, R-Mont., said the United States needs to flex its muscle as a primary consumer of products from other countries to leverage better terms for agriculture exports.
"We need to push other countries especially those with whom we have a trade deficit to level the playing field and open their markets to our farmers and ranchers," Daines said.