A successfully-concluded Trans-Pacific partnership (TPP) agreement will “provide an opportunity to strengthen already-established trade relationships and expand trade” for meat, poultry, and seafood, according to a special article in the “Livestock, Dairy, and Poultry Outlook” this week from USDA’s Economic Research Service (ERS). The impact of the TPP on the U.S. meat, poultry, and seafood exports through tariff reductions “may be more promising” with some countries, such as Vietnam and Malaysia, than with others, the report noted.

The United States already has bilateral or regional trade agreements with most of the TPP economies. Harmonization through the TPP of the standards underlying  sanitary and phytosanitary (SPS) and technical barriers trade (TBT)-related actions could be a benefit for U.S. trade expansion, both directly through the agreement and indirectly through strengthened trade relationships with partner countries where meat, poultry, and seafood demand is growing, ERS explained.

The (TPP) is a plurilateral free trade agreement presently being negotiated among 11 countries including Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States. Japan is expected to officially join the negotiations in June following approval by the U.S. Congress.

In 2011, beef, pork, poultry, lamb, and seafood trade with the 11 countries accounted for about 27 percent of total U.S. exports of these products and 53 percent of total U.S. imports. While the TPP has implications for all sectors of the economy, potential outcomes for different agricultural sectors are likely to vary based on existing trade relationships and the unique issues commodities face. In general, TPP may:

• Offer little reduction in tariff levels between countries already engaged in free trade agreements (FTAs) that reduced tariffs on animal products. The United States has bilateral or regional FTAs with six of the 11 countries including Australia, Canada, Chile, Mexico, Peru, and Singapore;

• Create opportunities for expanded U.S. meat and poultry exports to fast-growing developing countries such as Vietnam and Malaysia with which the United States does not have FTAs; and

• Be used as leverage to address sanitary and phytosanitary (SPS) issues.

U.S. poultry meat exports to the 11 TPP countries in 2012 totaled $1.530 billion or over 30 percent of $5.026 billion of total U.S. poultry exports to the world. Mexico and Canada were the two major export markets in the TPP last year with $951.47 million to Mexico and $409.51 million to Canada.

The United States currently does not have a free trade agreement with either Vietnam or Malaysia, both of which are markets with growing populations of affluent meat consumers. Vietnam is a large consumer of pork, with nearly 2 million metric tons consumed in 2012, more than doubling since 2000. Broiler meat consumption was almost 0.8 million tons in 2012, less than 10 percent of which was imported. A trade agreement that phased out tariffs could offer an expansion opportunity for U.S. meat and poultry exports, given Vietnam’s current most favored nation (MFN) tariff rate of 20 percent for fresh, chilled, or frozen pork, 21 percent for fresh and chilled beef, and 30 percent for fresh, chilled, and frozen poultry and edible offal of poultry, ERS said.

Malaysia has a current MFN tariff rate of 50 percent for fresh, chilled, or frozen swine carcasses and half carcasses and 40 percent for fresh, chilled, or frozen poultry meat and edible offal of poultry. Compared with pork and beef, Malaysian consumers demand greater quantities of poultry meat, consumption of which has increased by nearly 50 percent in the last two decades. In 2012, Malaysians consumed nearly 1.0 million tons of broiler meat.

The constraints remaining to U.S. livestock, meat, poultry, and seafood trade are primarily sanitary and phytosanitary measures and technical barriers to trade. TBTs related to production practices, such as traceability or animal welfare concerns, or to slaughter practices may also be discussed in negotiations. Differences in production practices among countries and specialized demand by consumer segments in the importing country may also have consequences on the potential to expand trade volume. As one example, Malaysia has the potential to expand beef and poultry meat imports from approved halal plants, the report noted.