Who knew? Global trade is complicated | Arkansas Blog

Monday, August 7, 2017

Who knew? Global trade is complicated

Posted By on Mon, Aug 7, 2017 at 12:56 PM

Donald Trump delivered shortly after his inauguration on a promise to pull out of the Trans Pacific Partnership, a 12-nation trade pact that was supposed to end punitive tariffs on U.S. agriculture producers.

Actions have consequences.  Politico reports:

The decision to pull out of the trade deal has become a double hit on places like Eagle Grove. The promised bump of $10 billion in agricultural output over 15 years, based on estimates by the U.S. International Trade Commission, won’t materialize. But Trump’s decision to withdraw from the pact also cleared the way for rival exporters such as Australia, New Zealand and the European Union to negotiate even lower tariffs with importing nations, creating potentially greater competitive advantages over U.S. exports.

A POLITICO analysis found that the 11 other TPP countries are now involved in a whopping 27 separate trade negotiations with each other, other major trading powers in the region like China and massive blocs like the EU. Those efforts range from exploratory conversations to deals already signed and awaiting ratification. Seven of the most significant deals for U.S. farmers were either launched or concluded in the five months since the United States withdrew from the TPP.

Arkansas, you may know, has a significant agriculture sector that's interested in building overseas markets. Already, the rice industry is watching warily on Trump's pullback from trade with Cuba.

Politico also notes:

For his part, Trump once promised a slew of “beautiful” deals to replace the TPP, but his administration has yet to lay out a detailed strategy. U.S. Trade Representative Robert Lighthizer told lawmakers that an analysis is underway to determine where it makes most sense to pursue negotiations.

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