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Ag deal scrapped, but relationships remain strong

A deal that stood ready to deepen trade relationships between the United States and Pacific Rim countries such as Singapore, New Zealand, Malaysia and Japan was deep-sixed last week, when the new administration in Washington D.C. officially tossed the Trans Pacific Partnership (TPP).

TPP had little chance of passing Congress, according to the Washington Post, and during the lead-up to the election last fall, Trump had promised to dump TPP. But the TPP withdrawal nonetheless prompted headlines in both the Lewiston Tribune and Idaho Statesman, with both papers highlighting the importance of international trade for Idaho agriculture.

“We in America have some of the strictest guidelines in the world for producing the commodities we produce,” Grangeville-area field service consultant and farmer Jonathan Rosenau told the Free Press Monday, Jan. 30. “We’ve proven we can make a far superior product in this area. We need trade. The relationships we’ve got, especially through the grain growers, we’re able to do a lot. People with Japan, Malaysia, Mexico, Vietnam, Peru, and Chile, come here and take tours and our trade relationships are pretty good. TPP was going to help build on those relationships. I think the things we were going for are still achievable, but you know how it goes with big government. It takes forever to get anything established.”

Rosenau is the Idaho County director with the Idaho Grain Producers Association.

Idaho exports more than $2 billion in agricultural products annually, with dairy ($460 million) and wheat ($400 million) among the biggest. About half of the wheat grown in Idaho moves to overseas markets by way of west coast export elevators, with the export share reaching the Pacific coast by rail or barge, according to the Idaho Wheat Commission.

On Jan. 23, the National Association of Wheat Growers and U.S. Wheat Associates described the TPP withdrawal as leaving American wheat growers “very much at risk” of losing Pacific Rim market share to competitors “including Australia, Canada, Russia and the European Union” in the absence of an alternative.

In place of the 12-nation agreement Congress declined before the election, Trump has pledged to negotiate numerous one-on-one agreements.

During the election, Trump also pledged to renegotiate NAFTA – the North American Free Trade Agreement. The new administration suggested last Thursday that a promised wall along the U.S.-Mexico border could be paid for by way of a 20 percent tariff on imports from Mexico.

It’s not yet clear how Mexico or Canada may respond if Congressional Republicans advance a plan the Wall Street Journal reported would involve taxing imports and removing taxes from exports. About 45 percent of Idaho’s 2015 ag exports went to Canada and Mexico.

The local timber economy also has much at risk in a less-noticed trade dispute with Canada. U.S. producers have long complained the Canadian government supplies logs at artificially low prices and on Jan. 6, the U.S. International Trade Commission (USITC) found softwood lumber products from Canada may have “materially injured” American producers.

Canadian media have reported that the BC provincial government has billed logging companies as little as 27 cents in stumpage per cubic meter (424 board feet) of wood. By contrast, Idaho Department of Lands timber sales are bid competitively and, while prices vary by species, logging companies typically bid about $200-$300 dollars per thousand board feet.

The USITC will publish a report through on Feb. 7 and the U.S. Department of Commerce is weighing action against Canadian lumber imports, with decisions due in February and May of this year.


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