Reentering TPP 'Can't Happen Fast Enough,' Industry Officials Say
Although U.S. traders would widely welcome the U.S. rejoining the Trans-Pacific Partnership, industry officials are disappointed with the country’s lack of urgency on the trade pact and don't expect the Biden administration to prioritize the deal before its term ends. While they said mini trade deals, such as the 2020 agreement with Japan (see 1912050058), can serve as “short-term” bandages, they aren’t nearly enough to make up for the benefits U.S. traders would have received under TPP.
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“There is no substitute for TPP and there is no short workaround for it,” Charles Freeman, senior vice president for Asia at the U.S. Chamber of Commerce, said during an Oct. 5 event hosted by the Global Business Dialogue. He said the administration may “approach” rejoining the deal in several years, but “if not, we're not sure what will happen thereafter.”
Freeman and others agreed the U.S. needs to rejoin the deal as soon as possible. Nick Giordano, who oversees government affairs for the National Pork Producers Council, said reentering the deal is “inevitable,” partly because the Comprehensive and Progressive Agreement for Trans-Pacific Partnership will continue to expand and the administration will realize there are no long-term “workarounds” for the agreement. “The United States has got to rejoin, and we've got to lead,” Giordano said. “As far as the people I represent, it just can't happen fast enough.”
Although both Republican and Democratic lawmakers believe the U.S.’s withdrawal from the TPP was a tactical mistake, experts believe entering the existing deal would be difficult (see 2106220054). The White House has said President Joe Biden is not interested in reentering the TPP without changes (see 2109170052).
The U.S. has tried to negotiate mini trade deals to regain some of the benefits it lost, but Sarah Thorn, global government affairs director for Walmart, said “there really isn't any substitute in the mini deals. They're just short-term Band-Aids, because they don't address the comprehensive nature” of large agreements. Thorn said Walmart would have benefited significantly from TPP because it captured portions of its retail markets in Canada, Mexico and Japan. “We saw it as a tremendous opportunity both for imports as well as exports,” she said. “We were looking for those lower duties in our markets.”
While the U.S-Japan mini trade agreement eliminated nearly 250 tariff lines of Japanese imports into the U.S. and lowered Japanese tariffs on hundreds of U.S. exports, including food and agricultural goods (see 1912040008), it fell short of what U.S. traders needed to compete, Freeman said. He said comprehensive deals are more likely to force the “concessions and market access openings that all of us really want” and mini deals don't achieve much “genuine” progress. “We were big supporters of the Japan phase one deal,” Freeman said, “but only because we didn’t really have a choice.”
Pork exporters experienced the Japan deal differently, Giordano said, partly because Japan is a crucial market for U.S. pork. “The sting isn't probably quite as bad for us as some,” he said. But Giordano said pork exporters haven’t been able to make up lost market access in other CPTPP countries, such as Vietnam. “They eat a lot of pork over there, and we were really competitive,” Giordano said. “We can't have one hand tied behind our back, and that's our situation now selling into Vietnam.”
The U.S. faces a range of challenges to reenter the deal, Freeman said, particularly because it has lost “credibility” with its trading partners about whether it can follow through on a trade agreement. He said U.S. allies are concerned about the hurdles such a deal would face in Congress and whether “the political winds might change in a matter of months” and disrupt negotiations. “It makes life for future negotiations that much more difficult,” Freeman said.