Farmers concerned about dead-duck TPP trade pact

Manawatu farmers are worried about what the United States withdrawal from the controversial Trans-pacific Partnership trade agreement will mean for them.

As expected, newly-inagurated US president Donald Trump has withdrawn from the deal, which was now effectively a dead duck.

Federated Farmers Manawatu spokesman James Stewart said one of the biggest of the 12 TPP nations pulling out raised doubts over the agreement’s future.

The agriculture industry would do well out of the agreement, officials say. The Ministry of Foreign Affairs and Trade estimated the industry would save $205 million a year in tariffs under the TPP.

Stewart said Kiwi farmers were reliant on trade and had to compete globally, so they were in favour of anything that lowered tariffs on their products.

They got limited government assistance and subsidies compared with most of New Zealand’s trading partners. And, in other places, agricultural exporters had lower costs, with cheaper labour and lax environmental laws giving them an economic advantage, he said.

‘‘It puts us on a back-foot, so we have to be more efficient and innovative. We’re very competitive, but we’d prefer a more level playing field.’’

The TPP promised a more even footing for Kiwi agriculture and farmers were concerned renegotiating one-on-one with the US, and any country that followed them out, wouldn’t turn out as well, he said. ‘‘I know Japan was a tough one to crack, for example.’’

Japan was a critical market for the beef industry, where beef tariffs would drop from 38.5 per cent to 9 per cent over 15 years under the TPP. This would ensure New Zealand was not at a disadvantage to Australia, which has a freetrade agreement with Japan.

Massey University economist Professor Christoph Schumacher said the US abandoning the TPP ship was unlikely to sink it completely. ‘‘As long as there are some countries involved, it will still have some value... It just might not be as valuable as was initially hoped.’’

Te Aro Pritchard, one of the organisers of the Palmerston North TPP protests over the past two years, said the US withdrawal was an encouraging move for the anti-tpp movement. ‘‘It’s very good news. We were hoping [Trump] would follow through on that promise.’’