TTP

Dr. Vincent) So the agreement has been reached by the negotiating parties, and the next step is the President is going to go to Congress and tell Congress basically that he intends to sign the agreement. And as soon as that intention is communicated to Congress, Congress has 90 days to make a decision and vote up or down. The real essence of the TPP to American agriculture trade and trade in general, is very little. We have all the major agricultural trading countries, all the countries that actually have the potential to add significantly to our agricultural trade and other trade, already in agreements with us in different areas. The fundamental reason why we have to be at this table, it’s a group of countries that have come together to recognize the threat of China in the global economic environment to create a block that can resist China’s move. And so, as much as people talk about it from the perspective of trade, I see more from the perspective of a strategic positioning to resist the rapid growth that we are seeing in China in the global economic environment. If China can position itself such that its currency becomes the currency of trade, instead of the U.S. dollar, that changes the whole story. I think that it is extremely important for us to focus on the economic power that we need to exert if we are going to maintain the U.S. currency as a reserve currency. And for me that is the essence of the TPP. Right now the U.S. borrows from the world in U.S. dollars, OK? So, when people buy our treasuries they are buying it in U.S. dollars. So, the exchange rate is irrelevant. Now suppose we go and borrow in Chinese renminbis, all of a sudden, exchange rate becomes a problem when we are talking about national debt. OK, there’s a real important reason why we have to maintain the U.S. dollars as the reserve currency for global trade. So, not only are we going to be buying products in Chinese currency if China becomes the dominant economic course, in all intents and purposes they’re their own competition to the World Bank. And that has been joined by some of our partners in Europe. So, when you think about it that way, if the yuan or renminbi becomes a currency, it has significant implications across borders on national monetary policy. Having said that, trade is not the biggest part of this, it’s still a component of it. For example, we’re going to see a 50 percent reduction on tariffs on beef, which is great for us because that immediately creates a pool, new markets for our beef processors. If they can get markets in this environment, it allows us to sell more cattle, alright? We are going to see about a 388 percent decrease in pork tariffs, OK? We are going to see about 31 percent decrease on wheat tariffs, OK? So, when you take all those despite the big picture of maintaining our national leadership as a global force, the benefits to us at the micro level of agriculture is still very real, because in the long run it’s that performance that allows us to maintain our sales in U.S. dollars and therefore take the risk of currency out. Our farmers don’t have to worry about currency risk when we are trading because everybody’s purchasing in U.S. dollars.

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