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Vilsack Travels to Vietnam; Arkansas Agri Could See $148m Benefit

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The United States continues to work with other countries in ironing out the details of the Trans-Pacific  Partnership agreement.  On Monday,  Tom Vilsack,  U.S. Secretary of Agriculture, met with agricultural leaders in Vietnam to discuss the agreement.  

Vietnam is one of 12 countries involved with the TPP and is considered as one of the fastest growing agricultural markets for the U.S.  Some of the top products for the Vietnam market are grown in Arkansas, such as cotton, rice, and soybeans.  

Wes Ward, state Secretary of Agriculture, said Arkansas will see a great economic benefit entering into the agreement.  He said according to projections from U.S. trade representatives, the Peterson Institute, and the American Farm Bureau Arkansas could receive an economic benefit of about $148 million.

"That's across a broad range of agricultural products," Ward said.  "Some of those benefit more than others.”

One of the benefits of the agreement is the gradual elimination of tariffs on various agricultural products in Vietnam. The U.S. exported $2.5 billion to Vietnam in 2015.  

However, Ward said rice producers have not been too thrilled with some of the outcomes of the agreement.  He said the agreement could pose a threat to relationships the U. S. currently has with some of its greatest rice consumers, such as Mexico and the Caribbean.

“TPP is predominantly Asian countries.  They are rice producing countries as well.   If they are giving unlimited market access to some of these countries we're currently in, that's part of the big concern ," Ward said.

However, Ward remains confident in the U.S.'s ability to compete.

“One thing we can always say on our end is we produce high quality products and that's something we can say that other counties can't," Ward said.

Ward said that the competing counties still do have a small chance to get a share of the market if consumers want a lower quality product.  Arkansas is the leading rice producer in the nation.

Here are numbers from a USDA press release about trading with Vietnam in the TPP.

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Credit United States Department of Agriculture

  Livestock Products

  • Beef: The United States exported $32.3 million of beef and beef products to Vietnam in 2015. Under the TPP agreement, all of Vietnam's tariffs on beef and beef products, currently as high as 34 percent, will be eliminated in 3-8 years. Tariffs on fresh and frozen beef muscle cuts will be eliminated in three years.
  • Dairy: In 2015, the United States exported $168 million of dairy products to Vietnam, more than three times the value a decade ago. All of Vietnam's tariffs on dairy products, currently as high as 20 percent, will be eliminated within five years. Tariffs on cheese, milk powder, and whey will be eliminated immediately.
  • Pork: The United States exported $3.8 million of pork and pork products to Vietnam in 2015. As a large consumer of pork, Vietnam provides significant potential for U.S. exporters. Under the TPP agreement, Vietnam will eliminate tariffs on pork and pork products, currently as high as 30 percent, in 5-10 years. Tariffs on frozen cuts and shoulders will be eliminated in eight years and on preserved pork, fresh pork cuts and shoulders, and fresh and frozen carcasses in 10 years.
  • Poultry and Eggs: The United States exported nearly $100 million of poultry and poultry products to Vietnam in 2015. Vietnam's tariffs on poultry and poultry meat, currently as high as 40 percent, will be eliminated within 13 years. This includes tariffs on frozen chicken cuts and offal, which will be eliminated in 11 years. Vietnam will eliminate in-quota tariffs for eggs within its WTO tariff-rate quota (TRQ) in six years. According to Vietnam's WTO commitments, this TRQ will continue to grow in perpetuity by five percent per year.

Horticultural Products

  • Fruit: The United States exported $58.6 million in fresh fruit to Vietnam in 2015. Under the TPP agreement, Vietnam's tariffs on fresh fruits, which are currently as high as 30 percent, will be eliminated within four years.  The United States exported $24.2 million of processed fruit products, including juices, to Vietnam in 2015. Under the TPP agreement, Vietnam's tariffs on processed fruit products, currently as high as 40 percent, will be eliminated within eight years.
  • Tree Nuts: The United States exported more than $274 million of tree nuts to Vietnam in 2015. Vietnam's tariffs on tree nuts, currently as high as 35 percent, will be eliminated in 3-6 years.
  • Vegetables and Pulses: The United States exported $4 million of fresh and processed vegetables (excluding potatoes) to Vietnam in 2015. Vietnam will eliminate tariffs on all fresh and processed vegetables, currently as high as 40 percent, in 11 years or less, with tariffs on many products eliminated immediately.
  • Potatoes: The United States exported $5.1 million of potatoes and potato products to Vietnam in 2015. Under the TPP agreement, Vietnam will eliminate tariffs on all potatoes and potato products, currently as high as 34 percent, within six years. It will eliminate the 13-percent tariff on frozen French fries in four years.

Grains and Oilseeds

  • Barley: The United States did not export barley to Vietnam in 2015. Under the TPP agreement, Vietnam's tariff on barley will be locked in at zero percent and its 15-percent tariff on milled barley will be eliminated in four years.
  • Corn: The United States exported $190 million of corn and corn products to Vietnam in 2015. Under the TPP, all of Vietnam's tariffs on corn and corn products, currently as high as 30 percent, will be eliminated in 4-7 years.
  • Peanuts: The United States exported $24 million of peanuts and peanut products to Vietnam in 2015. Under the TPP agreement, Vietnam's tariffs on peanuts and peanut products, currently as high as 30 percent, will be eliminated within eight years.
  • Rice: The United States exported $140,000 of rice and rice products to Vietnam in 2015. Under the TPP, Vietnam will immediately eliminate its current 40-percent tariff on rice and will eliminate tariffs on rice products, currently as high as 35 percent, within eight years.
  • Soybeans: The United States exported more than $407 million of soybeans and soybean products to Vietnam in 2015. The current duty-free access for soybeans will continue under the TPP. Vietnam's tariffs on soybean products, currently as high as 33 percent, will be eliminated in 3-11 years.
  • Wheat: The United States exported roughly $67 million of wheat and wheat products to Vietnam in 2015. Vietnam's tariffs on wheat and wheat products, currently as high as 35 percent, will be eliminated within four years.

Other Products

  • Cotton: Vietnam was the United States' second-largest cotton market in 2015, with exports reaching a record $624 million. Vietnam's large and growing textiles industry offers significant opportunities for U.S. cotton exporters. Under the TPP agreement, all of Vietnam's tariffs on cotton, currently as high as 10 percent, will be eliminated within four years.
  • Processed Food: In 2015, the United States exported $467 million of processed food to Vietnam. Under the TPP agreement, nearly all of Vietnam's tariffs on processed products, currently as high as 55 percent, will be eliminated within 12 years. Tariffs on products such as cookies, crackers, biscuits, breads, and starches will be eliminated in eight years.
  • Tobacco: Vietnam will eliminate all tariffs on tobacco, which are currently as high as 135 percent. For manufactured tobacco products, Vietnam will eliminate tariffs in 16 years. For unmanufactured tobacco, Vietnam will create a 500-ton transitional tariff rate quota (TRQ) that will grow by five percent each year, with in-quota tariff rates eliminated in 11 years and out-of-quota tariff rates eliminated in 21 years.