“Cut to the Chase”

Chicken Nugget Negotiations

by Garrett Hawkins

Through the rearview mirror, I watched my oldest child, Adelyn, attempt to swap her Happy Meal stuffed hamster for a dachshund that Tate, our 20-month-old, had received with his meal. She smiled sweetly and asked politely, but Tate just stared her down – and screamed when she tried to pry it out of his hands. I was about to pull the vehicle over when the unexpected happened. Our middle child, Colton, negotiated a deal. Adelyn had to throw in a chicken nugget with the hamster, but she got her dachshund.

If only all trade deals were negotiated this easily. Take the pending agreement between the United States and 11 Pacific Rim countries: Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and Japan. U.S. trade officials spent seven years in discussions to help American farmers, small businesses and manufacturers improve market access in one of the fastest growing regions in the world. Combined, these countries account for 40 percent of the global economy and 42 percent of U.S. agricultural exports.

The proposed Trans Pacific Partnership (TPP) is a big deal for U.S. farmers and ranchers – big in the sense of $4.4 billion. That’s the projected increase in net farm income annually if the agreement is implemented, according to the American Farm Bureau Federation’s (AFBF) economic analysis. When any trade agreement is proposed, our organization’s team of policy and economic analysists study the text and calculate potential gains and losses for each commodity and the entire agriculture sector.

Based on our organization’s analysis, Missouri agriculture fares well under the proposal. Net exports are projected to jump by $105.3 million a year and cash receipts by $168.2 million. About $4.1 billion in agricultural products were exported from our state in 2013. Sales are expected to increase for beef, pork, fruits and nuts, vegetables, soybeans, wheat, poultry, dairy, rice, cotton and processed food products. Corn exports decline slightly, but use and revenue rise as a result of higher feed consumption by the livestock sector.

Trade is complicated, and its benefits can be difficult to see. However, we certainly know when we lose access to a key market because it hits our pocketbooks when we sell a load of corn or calves. For agriculture and other sectors of the U.S. economy that produce or make things, it boils down to this: 95 percent of consumers live somewhere besides the U.S.

Consumers in Pacific Rim countries want more of what we produce and will be able to purchase more as their governments lower or eliminate taxes on our goods. The question is whether the U.S. will move forward and approve the TPP or watch other countries like Canada and Australia move ahead to give their farmers and ranchers the upper hand in Asian markets.

Learn more about Farm Bureau’s analysis by visiting tpp.fb.org. The TPP in its entirety can be found at ustr.gov/tpp.