TPP-11 talks draw concern for U.S. wheat industry

ARLINGTON, VIRGINIA, U.S. — A year after U.S. President Donald Trump withdrew from the Trans-Pacific Partnership (TPP) eleven other countries moved forward and continued the talks.

Talks concluded on Jan. 23, drawing concern from the U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG). Both associations are expressing alarm that a revised TPP that excludes the United States puts overseas demand for U.S. wheat at serious risk.

“On Jan. 23, 2017, exactly one year ago, President Trump announced the United States would pull out of the TPP,” said Ben Conner, director of policy at USW. “The announcement today that the 11 remaining TPP members have concluded talks on a revised deal without us sends another discouraging signal to our long-time wheat importing customers in Japan.”

According to a U.S. Department of Agriculture (USDA) report, Japan produces only about 10% of the food wheat that it consumes, and imports the remaining 90%. The imports primarily come from the United States, Canada and Australia, the agency noted. Japan imported $1.4 billion of wheat from the United States in 2016.

The USDA noted that Japan uses its imports to produce approximately 4.7 million tonnes of wheat flour, 40% of which is used for making bread, 34% for noodles, 11% for confectionery products, and 3% for retail sales.

Both wheat organizations noted that after full implementation of the new TPP, Japan’s import tariffs on Canadian and Australian wheat would drop by about $65 per tonne.

“That would put U.S. wheat producers at a total price disadvantage of more than $200 million per year from TPP alone,” Conner said. “As the agricultural community warned when the president made the announcement, withdrawing from TPP was shortsighted and unnecessary, and now U.S. wheat farmers could take the hit.”

Gordon Stoner, president of NAWG

“As expected, the remaining members of TPP are moving forward without the United States,” Gordon Stoner, president of NAWG. “If nothing else, this announcement should serve as a rallying cry for farmers, ranchers and dairy producers calling for the new trade deals we were promised when the president walked away from TPP. The heat needs to be turned up on the administration and on trade negotiations with Japan. An already stressed agriculture sector needs the benefit of free and fair trade now.”

The TPP-11 countries include Canada and Australia, which are major competitors to the United States in the Japanese wheat market. Other TPP countries with rapidly growing demand for imported wheat include Mexico, Vietnam, Malaysia, Chile and Peru. Singapore, Brunei and New Zealand round out the remaining TPP partner countries.