US political change may slow efforts to free up agricultural trade, academic Bailey says
By Tina Morrison
May 20 (BusinessDesk) - Political change in the US may slow efforts to free up agricultural trade, impacting New Zealand which had hoped to gain better access to the world's largest economy through the Trans-Pacific Partnership agreement, according to a US academic with links to New Zealand.
US lawmakers are expected to ratify the Trans-Pacific Partnership during the so-called "lame-duck" session of Congress between the US presidential election in November and the swearing-in of a new US president early next year.
However, growing US opposition over the last 10 months could see a new US president and new Congress take the country's trade policy in a new direction from 2017, Professor Bill Bailey wrote in a note for ASB Bank titled 'Trans Pacific Partnership: A one-hit wonder?'.
Bailey was chair of agribusiness at Massey University for 13 years, a former chief economist for the US senate committee on agriculture, nutrition and forestry, and is currently dean, college of business and technology at Western Illinois University.
Bailey said the political environment in the US has changed "dramatically" since the US Congress voted on so-called fast-track rules related to enacting TPP in the US last summer, in what was seen as a shadow vote on TPP. Presidential candidates have forced a broad range of politicians to take a public stand on TPP, with an increasing number of politicians voicing opposition to the deal, he said. A split also appeared to be emerging between farmers and their Washington leaders.
The US free trade experience has been mixed "at best", with beef imports accelerating at a faster pace than exports since the North American Free Trade Agreement between the US, Canada and Mexico was signed by President Bill Clinton in 1994, Bailey said. US corn and soybean exports have been flat since 1994 while losing market share to competitors and the US has experienced a strong and growing trade deficit.
"While Congress is likely to pass the TPP, a new US President may take US trade policy in a new direction," he said. "After the swearing in, there will be a whole new posse in town, led by a new sheriff, who will deal with trade issues potentially very differently than the old sheriff. As a consequence, for NZ over coming years, these US political developments have the potential to slow the progress of freeing up agricultural trade with the US and its neighbours."