The Trans-Pacific Partnership (TPP) would benefit trade in fresh fruits, vegetables
and nuts, according to a U.S. report released in May by the U.S. International Trade Commission
(ITC). The ITC is an independent agency of the U.S. government tasked with reviewing the impact of trade agreements, as well as ongoing trade concerns.
According to the report, sanitary and phytosanitary restrictions that continue to hamper trade could be offset by new market access in Japan, Vietnam and Malaysia. The United States, which exports almost half of its fresh produce and nuts, would stand to benefit from TPP, with immediate to near-term duty-free market access for produce. A major trade agreement, TPP sets rules for trade among 12 Pacific Rim nations, removes a major part of existing tariffs, and eliminates other trade barriers to goods and services trade and investment.
Tariff concessions under TPP would benefit the fresh produce sector. Under TPP, the U.S. agreed that most fruits will enter the country duty-free. Within 10 years or less, the U.S. will eliminate other duties on produce items from TPP countries, such as dates and fresh cantaloupes, which are currently as high as 29 percent. The U.S. would end the majority of its tariffs on fresh vegetables from TPP countries immediately, while the U.S. tariffs on asparagus and mushrooms from Australia will expire in 20 years.
For its part, Japan agreed to allow most U.S. fruit and vegetables to enter duty-free. Japan would eliminate tariffs in 11 years or less on U.S. citrus, currently as high as 32 percent, and U.S. apples (17 percent). Malaysia would allow U.S. vegetables to enter duty-free and eliminate current 5-percent tariffs on most non-tropical fruit from the U.S. and eliminate tariffs on melons and tropical fruits in 11 years. Vietnam agreed to eliminate immediately or within two to six years, tariffs as high as 40 percent on U.S. citrus and eliminate 15-percent tariffs on U.S. apples and grapes within three years. With regard to fresh vegetables, Vietnamese tariffs, which average 15-20 percent would drop within four years.
The ITC report notes agricultural exports for the U.S. would rise by 2.6 percent overall under the TPP agreement, if ratified by the U.S. Congress. Twelve nations accounting for 36 percent of global gross domestic product (GDP) valued at $28 trillion, including the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, completed negotiations under the TPP agreement
in October 2015. This report was issued in response to a request from the U.S. Congress and the U.S. Trade Representative Michael Froman
for an assessment of the impact of the agreement on the U.S. economy as a whole and on specific industry sectors and the interests of U.S. consumers.
By 2032, agricultural exports from the U.S. to TPP countries would increase by $7.2 billion, with U.S. imports from TPP countries rising by $2.7 billion. These benefits are realized in increased trade with Japan and Vietnam—two countries where the agricultural sectors are currently protected by high tariffs. The ITC report also predicts an increase in U.S. employment of .5 percent.
For more information or questions about TPP or other global trade policy issues, contact Richard Owen, PMA vice president of global business development at email@example.com
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