Untie farmers’ hands and open world markets

As Iowa soybean farmer Jim Brown tells the story, his grandfather, who started the family business more than 80 years ago, used to pick crops with his bare hands. In those times, picking 100 bushels was a good day’s work. But now Jim’s hands are more often used to operate combines that gather 300 bushels an hour, or to tap on the keyboards of computers that provide him with critical data about seed prices in world markets.

With 95 percent of the global market beyond our shores, Iowa-based farmers like Jim know the potential value of exporting pork, soybeans and other agricultural products to new markets.

But in trying to take advantage of those markets, farmers often find their hands tied. Until now, foreign taxes in the form of tariffs and a forbidding tangle of regulations, agricultural inspections, export bans and subsidies have greatly restricted their potential to expand exports. Agricultural tariff rates average 19 percent in Japan, for example, and 16 percent in Vietnam. In other Trans-Pacific Partnership countries, some products have peak tariffs of more than 300 percent.

We know that, when the rules of the road are fair, with lower barriers to trade, and with core, enforceable labor standards, Americans can out-compete anyone in the world, hands down.

That is why the U.S. State Department has worked closely with the Department of Agriculture, the U.S. Trade Representative, and other federal agencies to open markets in the Asia-Pacific by lowering trade barriers imposed on made-in-America exports and setting better standards for the environment and for workers abroad through the Trans-Pacific Partnership.

Thanks to the successful conclusion of TPP negotiations, we are one step closer to untying our farmers’ hands, giving them access to markets in a region of roughly 500 million consumers, representing nearly 40 percent of GDP.

This high-standard trade agreement eliminates or reduces tariffs and other restrictive policies that previously undercut American exports in 11 nations: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The TPP agreement also requires its member countries to meet the highest labor standards of any trade agreement in history.

TPP will ensure that agricultural regulations and inspections are based on science, eliminate agricultural export subsidies, and minimize unpredictable export bans.  It prevents countries from subsidizing exports and will reduce unpredictable export bans on food, which undermine food security, damage world food markets, and impose high risks on the poorest countries.

Our U.S. food and agricultural exports are already on the rise, reaching a record high of more than $150 billion last year. So the potential gains from TPP’s lifting of restrictions are enormous, especially for Iowa’s two largest agricultural exports:  soybeans and pork.

In 2013, Iowa exported $2.7 billion in soybeans and $2 billion worth of pork worldwide — with tariffs up to 30 percent in TPP markets. But now, a good outcome for pork in the trade pact could increase U.S. pork exports significantly over time and help create more U.S. jobs tied to those exports, according to Iowa State University economist Dermot Hayes.

Agricultural exports help to boost farm prices and income. And they support jobs, both on the farm and in related industries such as food processing, transportation and manufacturing.

In 2013, for example, overseas sales of agricultural products supported more than 1 million full-time American jobs. And every dollar of agricultural exports stimulated another $1.22 in business activity, especially in rural communities across the country.

When we consider the nearly $63 billion in total U.S. agricultural exports that went to TPP countries last year, a remarkable sum despite tariffs and other barriers, we can conclude only one thing:  that figure can only move up.

The Economic and Business Affairs Bureau of the U.S. Department of State is doing everything possible to support American exports and agriculture. And to echo what Secretary of State John Kerry has said, I am proud of all the work that our teams in Washington and at our embassies and consulates around the Pacific have done to bring these negotiations to a successful conclusion.

It means that our farmers will be better off, and our nation will remain a strong agricultural exporter and leader in global food security efforts for the foreseeable future. And it means that Iowa and the great American heartland can continue to feed the dinner tables of the world, bring jobs to America, and speak to who we are as a people.

Ambassador Charles H. Rivkin  is assistant secretary of state for economic and business affairs. Contact: www.state.gov