A new trade treaty among 11 nations that doesn’t include the United States leaves worried American farmers to face significantly stiffer international tariffs than their competition.
The new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) treaty goes into effect Sunday. It will slash tariffs across much of the Pacific rim region — but not for the U.S. since Trump administration officials pulled out of negotiations last year.
Investment bank HSBC said in a statement that 90 percent of tariffs on goods in the first six countries — Canada, Japan, Australia, New Zealand, Mexico and Singapore — will immediately be removed in the first round of cuts, Reuters reported.
Cuts will also be implemented in Vietnam, Brunei, Chile, Malaysia and Peru in early 2019. Japan has also worked out a similar tariff deal with the European Union that will go into effect Feb. 1, according to CNN.
The treaty is expected to hit American wheat farmers particularly hard as tariffs on wheat from Canada and Australia will immediately drop seven percent. By April, tariffs on wheat from those nations will be cut 12 percent.
“Our competitors in Australia and Canada will now benefit from those provisions as U.S. farmers watch helplessly,” U.S. Wheat Associates President Vince Peterson said at a hearing held earlier this month by the U.S. Trade Representative.
“Japan is generally a market where we seek to maintain our strong 53 percent market share, but [now] we face an imminent collapse,” he said.
Officials representing Tyson’s pork, Welch’s grape juice, the California almond industry and American beef industry, among others, have also complained that they face major losses as the U.S. misses out on the treaty benefits, reports CNN.
The Obama administration had hoped to win similar concessions for American producers when officials began negotiating the Trans-Pacific Partnership. But President Donald Trump shut down the negotiations for TPP — which he termed a “disaster” for American workers and producers — in favor of a strategy of working out one-on-one agreements. That approach resulted in a trade war with China.
Trump, meanwhile, tweeted Saturday that he spoke on the phone with Chinese President Xi and “big progress” was made in trade talks, but he provided no other details.
Chinese state media confirmed that Trump and Xi spoke, and quoted Xi as saying that teams from both sides are working to forge an agreement.