TPP Moves On Without the U.S.; Rice Negatively Impacted

Feb 02, 2018
In lieu of a better deal
 Cartoon image of Trump carrying US flag while other hands sign a trade deal
TOKYO, JAPAN – Eleven countries will sign a new version of the Trans-Pacific Partnership (TPP) in Chile next month, after successful negotiations concluded here last week.  The new deal, known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CP-TPP or TPP-11), will not include the United States.

President Donald Trump pulled the United States out of the original TPP deal in one of his first acts as President.  

Pulling out of TPP was opposed by most of U.S. agriculture, however USA Rice ultimately took no position due to the deficient market access package for rice.

But in or out of the deal, the U.S. rice industry concerns remain.  

As part of CP-TPP, Mexico will eliminate the current 20 percent tariff on rice imports from Viet Nam, a move that could negatively affect U.S. market share in the number one U.S. market.  Although Mexican consumers largely prefer U.S.-grown rice for its quality and cooking characteristics, and importers appreciate the U.S.’s reliability and logistical advantages, U.S. rice is vulnerable to cheap competition from Asia.  The elimination of the tariff will be a gradual transition, though the exact schedule has not yet been announced.  Mexico recently renewed a 150,000 metric ton TRQ for rice that could benefit Vietnamese rice immediately. (see USA Rice Daily, January 16, 2018).

A stumbling block for the U.S. rice industry on the original TPP concerned quality and quantity of access to the Japanese market and the threat of Vietnamese imports into Mexico at zero tariff.  The Trump Administration is pursuing a bilateral trade agreement with Japan and President Trump recently expressed a willingness to rejoin “a substantially better” TPP.

“USA Rice supports the Administration’s discussions with Japan and will press for an improvement of rice market access under any enhanced TPP agreement,” said USA Rice COO Bob Cummings.  

The 11 member countries - Canada, Australia, New Zealand, Brunei Darussalam, Chile, Singapore, Japan, Malaysia, Mexico, Peru, and Viet Nam - will sign the new CP-TPP March 8, 2018, at a ceremony in Chile.