De Young believes the TPP’s reduction and elimination of tariffs will open the door for consumers in North America and Asia to see what they’ve been missing: a wide assortment of fruits, vegetables, and cuisines, and for growers to tell their stories. “Leveling the playing field allows us to communicate the many positive attributes of our clients’ products. Every region of the world utilizes fresh produce in different ways; we help to showcase unique, new methods of using U.S. agricultural products, often in ways people may never have thought of.”
VIETNAM – AND BEYOND
Like other U.S. agriculture sectors (especially meat and dairy), the produce industry has its eye on Vietnam. “For us, the jewel is really Vietnam. They take high quality product and pay good money for it,” says Powers.
Vietnam’s consumer market is projected to keep growing, according to the USDA attaché in Hanoi. The U.S. share of Vietnam’s consumer-oriented agricultural imports increased astonishingly in the last decade through 2014, from $20 million to $879 million. This is still only a 3 percent market share of Vietnam’s agricultural, fish, and forestry imports—which are considered notoriously difficult to estimate due to “Vietnam’s porous borders and endemic under-invoicing,” as described by USDA’s Hanoi office.
Access to the Malaysian market, where produce tariffs are not as high, is also an upside. Malaysia’s tariff on most fruit crops is 5 percent; kiwifruit from Chile is 15 percent. Both Chile and Peru are expected to increase produce exports to Malaysia and Japan as the result of TPP, according to Produce Marketing Association analysis. This could take some export market share from China, the dominant player in fruit exports to many Pacific Rim countries.
The market growth may not stop there, for other Asian countries are likely to sign onto TPP after approval from the initial members. Indonesia and Thailand are both promising produce markets for Western exporters, and often mentioned as future TPP members.
A LEVEL PLAYING FIELD
The TPP has broad implications beyond tariff reductions. “TPP will provide a sense of transparency in how you do business in a region,” says the Produce Marketing Association’s Owen. Customs, trade regulations, and rules of origin will be streamlined between member countries. Partnership members will also be required to report illegal trade goods—even if these shipments originate in, or are headed for, a non-TPP destination. This in turn will discourage trade in cheaper goods, including illegally-harvested fruits and vegetables.
Also of interest to produce suppliers, TPP members will be committed to fundamental labor rights and environmental protection. These conditions could help the United States, Canada, and Japan build trade advantages with TPP partners over other partners (like China) that are not yet committed to maintaining the same level of workforce or eco-friendly protections as TPP members.
