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Department of Agricultural, Environmental, and Development Economics


OSU Economist: The Trans-Pacific Partnership Will Benefit the U.S. Agriculture Sector

Dec. 22, 2015

This article was originally published on the website of Ohio State's College of Food, Agricultural, and Environmental Sciences.


COLUMBUS, Ohio – The Trans-Pacific Partnership (TPP) could significantly boost the export market potential for American farmers, as well as other sectors of the U.S. economy, says an economist with the College of Food, Agricultural, and Environmental Sciences at The Ohio State University.

“TPP is important as it is the largest regional free trade agreement that has been struck in the past two decades,” said Ian Sheldon, the Andersons Professor of International Trade in the college’s Department of Agricultural, Environmental, and Development Economics (AEDE).

After seven years of negotiations, agreement on TPP was reached in early October by the partnership’s 12 signatory countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States. However, TPP is not yet official, as it has to be passed by the legislatures of the signatory countries, Sheldon said. In the U.S., the agreement has yet to be presented to Congress.

The TPP signatory countries account for approximately 40 percent of the world’s economy. The agreement encapsulates a variety of economies, including both large, developed nations, as well as fast-growing emerging economies, he said.

Sheldon spoke Dec. 7 during the kickoff to the college’s 2015-2016 Agricultural Policy and Outlook series, which is a series of local meetings held statewide through January. Dates and times for the meetings, along with more information including policy briefs and presentation files from each of the presenters, can be found at

The meetings feature presentations by experts from AEDE who discuss issues the food and agricultural community should expect this year, including policy changes and market behavior with respect to farm, food and energy resources, and the environment. 

The meetings are open to the public. A meal is provided with each meeting and is included in the registration cost.

Additionally, a new offering this year is a webinar to enable participants to join remotely from their own home or office. The webinar, which costs $10, will be held on Feb. 1 at 6:30 p.m. Register by Jan. 25 at

Sheldon noted that many institutions are forecasting impressive economic growth under TPP.

“The Peterson Institute for International Economics estimates that under TPP, $225 billion will be added to global GDP (gross domestic product) by 2025, including $77 billion to U.S. GDP,” he said.

Additionally, according to Sheldon, the U.S. Department of Agriculture’s Economic Research Service estimates that TPP will result in a 6.6 percent increase in agricultural trade by 2025.

This increase will account for an additional $8.5 billion in the agricultural marketplace, assuming the complete elimination of existing agricultural tariffs by 2025, he said.

“Agricultural products traded between TPP members are currently subject to higher tariffs on average than manufactured products, although bilateral protection varies considerably by country,” Sheldon said. “For example, average agricultural tariffs are 3.6 percent at the U.S. border compared to 23 percent at the Japanese border.”

The agreement is expected to increase U.S. access to several countries that do not currently have a free trade agreement with the U.S., he said.

Japan is one important trade partner that will be affected by the agreement, Sheldon said.

According to the USDA, TPP will affect several U.S. agricultural exports to Japan, including beef, pork, dairy products, wheat and rice.

 “In the case of Japan, 50 percent of U.S. agricultural exports will face zero tariffs once TPP is implemented,” he said. “With Japan being the fifth largest agricultural export market, accounting for over $13 billion worth of U.S. exports, reduction in their agricultural tariffs has been a long-held objective of U.S. trade policy, and one not addressed as yet in the WTO (World Trade Organization).”