Economic

Research

Service

Economic

Research 

Report 

Number 176

October 2014

United States Department of Agriculture

Agriculture in the Trans-Pacific 

Partnership

Mary E. Burfisher, John Dyck, Birgit Meade, Lorraine Mitchell, 

John Wainio, Steven Zahniser, Shawn Arita, and Jayson Beckman
Economic Research Service 

www.ers.usda.gov

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Burfisher, Mary E., John Dyck, Birgit Meade, Lorraine Mitchell, John Wainio, Steven 

Zahniser, Shawn Arita, and Jayson Beckman. Agriculture in the Trans-Pacific 

Partnership, ERR-176, U.S. Department of Agriculture, Economic Research Service, 

October 2014.

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United States Department of Agriculture

Economic 

Research 

Service

Economic

Research 

Report 

Number 176

October 2014

Abstract

The proposed Trans-Pacific Partnership (TPP) is a trade and investment agreement under negotiation by 12 countries in the Pacific Rim, including the United States. This report assesses 

the potential impacts of eliminating all agricultural and nonagricultural tariffs and tariff-rate 

quotas (TRQs) under a TPP agreement on the region’s agriculture in 2025—the assumed end 

date of the pact’s implementation—compared with baseline values for 2025 without a TPP. 

Cutting tariffs is only one of the many goals of the TPP negotiations, but it is an important 

one for agricultural trade. The value of intraregional agricultural trade in 2025 under a tarifffree, TRQ-free scenario is estimated to be 6 percent, or about $8.5 billion higher (in 2007 U.S. 

dollars) compared with baseline values. U.S. agricultural exports to the region will be 5 percent, 

or about $3 billion higher, and U.S. agricultural imports from the region in 2025 will be 2 

percent, or $1 billion higher in value compared with the baseline. 

Keywords: Trade, trade agreement, Trans-Pacific Partnership, TPP, computable general equilibrium (CGE) model, Pacific Rim, Japan

Acknowledgments

The authors thank Barry Krissoff, formerly of USDA, Economic Research Service (ERS); 

Andrew Muhammad and Gopinath Munisamy of ERS; Jason Carver of USDA, Foreign 

Agricultural Service; Jason Hafemeister of USDA, Office of the Chief Economist; Karl Meilke 

of the University of Guelph; and Jeff Reimer of Oregon State University for their peer review 

of this report. We thank the Mexican Agricultural Secretariat’s General Coordination of 

International Affairs (SAGARPA-CGAI) for feedback on Mexican tariff values. We also thank 

ERS editor Susmita Pendurthi and ERS designer Curtia Taylor.

Mary E. Burfisher, John Dyck, Birgit Meade, Lorraine 

Mitchell, John Wainio, Steven Zahniser, Shawn Arita, 

and Jayson Beckman

Agriculture in the TransPacific Partnership
Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

The Baseline Scenario in TPP Member Countries, 2014-25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Economic, Population, and Dietary Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Trade Policy Trends and Preferential Trade Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Trade and Production Trends, 2014-25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Impacts of Eliminating Tariffs and TRQs Within the TPP in 2025 . . . . . . . . . . . . . . . . . . . . 21

Impacts on Real GDP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Impacts on Agricultural Trade Within the TPP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Impacts on Agricultural Trade Between TPP Members and Rest of World . . . . . . . . . . . . . . . . 26

Impacts on Agricultural Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Comparison of Results With Other CGE Model-Based Analyses of the TPP . . . . . . . . . . . . . . 34

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Appendix 1 – The Trans-Pacific Partnership Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Appendix 2 – Countries and Sectors in the TPP Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Appendix 3 – Splitting GTAP Agricultural Sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Appendix 4 – Changes in Private Household Consumption 

Quantities in 2025 With the TPP, Compared With 2025 in Baseline . . . . . . . . . . . . . . . . . . . . 51

Appendix 5 – Effects of Tariff and Quota Elimination in a TPP 

on Global Trade of TPP Members.................................................52

Appendix 6 – Effects of Tariff and Quota Elimination in a TPP 

on Output Quantities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Appendix 7 – Effects of Tariff and Quota Elimination in a TPP 

on U.S. Bilateral Trade Quantities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Errata

On October 30, 2014, the following corrections were made to Box 2 of the report: 

1.On page 27, 3rd paragraph, the 3rd sentence was corrected to begin with: “For instance, for 2014...”

2.On page 28, the 4th entry in the right-hand column of the table, the year for the New York State data 

was corrected to 2011.
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gov/publications/erreconomic-researchreport/err176

Mary E. Burfisher, John Dyck, Birgit Meade, Lorraine 

Mitchell, John Wainio, Steven Zahniser, Shawn Arita, and 

Jayson Beckman

Agriculture in the TransPacific Partnership

What Is the Issue?

The proposed Trans-Pacific Partnership (TPP) is a trade and investment agreement under 

negotiation by 12 Pacific Rim countries, including the United States. With a combined population of about 800 million and a combined gross domestic product (GDP) of about $28 trillion, these 12 countries encompassed 11 percent of global population and almost 40 percent 

of global GDP in 2012. The total size of their market for agricultural imports averaged $279 

billion over 2010-12, 51 percent of which was sourced from TPP partners. The TPP accounts 

for 42 percent of the global agricultural exports of the United States and 47 percent of its 

agricultural imports. For over three decades, TPP members have been actively engaged in 

negotiating preferential trade agreements (PTAs) that have provided for greater market access 

in their trade with each other. Despite the intensity of PTA activity in the region, the high 

tariffs that remain among TPP partners on some agricultural products, as well as the trade 

flows between TPP members that have not already negotiated bilateral PTAs, leave scope for 

significant additional agricultural trade liberalization under the TPP. 

What Did the Study Find?

This report quantifies the economic effects on agriculture of a hypothetical and stylized TPP 

scenario in which all agricultural and nonagricultural tariffs and tariff-rate quotas (TRQs) 

on intra-TPP trade are eliminated. Trade barriers between TPP countries and other countries 

remain unchanged in this analysis. However, because the TPP is expected to build upon its 

members’ existing networks of bilateral and regional PTAs within the TPP region, the study 

first applies these previously negotiated tariff cuts in a baseline scenario. 

The study finds that the existing regional PTAs do not eliminate or reduce all intra-TPP 

tariffs and TRQs. The elimination of the remaining tariffs and TRQs (i.e., the hypothetical 

TPP scenario) will increase the value of agricultural trade among TPP countries by 6 percent, 

or about $8.5 billion (all model values in the report are in 2007 U.S. dollars, the model’s base 

year), in 2025 relative to the baseline scenario. While both agricultural imports and exports 

October 2014
www.ers.usda.gov

in each member country will grow, Japan and the United States will account for the largest shares of the 

increases in intraregional imports and exports, respectively. The United States will supply about 33 percent 

of the expansion in intraregional agricultural exports—the value of U.S. agricultural exports to TPP partners in 2025 is estimated to be 5 percent ($2.8 billion) higher under the hypothetical TPP scenario than 

under the baseline. Japan will account for almost 70 percent of the expansion in intraregional agricultural 

imports—the value of Japan’s agricultural imports from its TPP partners in 2025 is expected to be 14 

percent ($5.8 billion) higher than under the baseline. 

By commodity, the percentage increases in the value of intraregional trade due to eliminating tariffs and 

TRQs among TPP members will be largest for rice, sugar, and “other meat” (which includes animal fats 

and oils and offals). In absolute value terms, the increase will be greatest for bovine meat (which includes 

beef and mutton), “other foods” (which includes processed foods and feeds), and poultry meat; although 

their growth rates are lower, these commodities have large initial values in intra-TPP trade, so even relatively small percentage gains translate into relatively large absolute gains in their trade value. The total 

increased trade in meats of about $3.7 billion will account for 43 percent of the expansion in the value 

of intra-TPP trade in 2025, most of which is supplied by Australia, the United States, Canada, and New 

Zealand. About three-quarters of the increase in meat exports is destined for Japan, whose meat imports 

(mostly bovine meat) will increase by about $2.8 billion relative to the baseline. 

Agricultural output in the United States will increase in most sectors due to increased market access within 

the TPP region, especially in cereals (1 percent), dairy products (0.5 percent), and meat (0.4 percent). 

Among TPP members, the largest percentage gains in agricultural output will be in meats in Australia, 

dairy in New Zealand, and “other agriculture” in Singapore. Agricultural output quantities will decline in 

most sectors in Japan and Vietnam in 2025 relative to the baseline. 

Eliminating intraregional tariffs and TRQs will have zero or small positive effects on members’ real gross 

domestic product (GDP). There are no measurable effects on U.S. real GDP in 2025 relative to the baseline 

scenario. Most of the increase in agricultural trade among TPP members is due to an expansion in their 

total trade, rather than a diversion of their trade away from the rest of the world toward TPP partners. 

How Was the Study Conducted?

The study uses the Global Trade Analysis Project’s (GTAP) static computable general equilibrium model 

with the GTAP v8 2007 database (the base year of the v8 dataset was updated from 2007 to 2014). Two 

scenarios were modeled to reflect developments between 2014 and 2025—the assumed implementation 

period for the TPP. The first is a “baseline scenario,” which simulates projected growth in GDP, increased 

supplies of capital and labor, changes in population and diets, and the implementation of a network of preferential trade agreements and unilateral tariff reforms already committed to in the region. A hypothetical 

and stylized TPP scenario adds a full elimination of intra-TPP agricultural and nonagricultural tariffs and 

TRQs to the network of trade agreements. The differences between the scenarios capture the effects of 

eliminating intraregional tariffs and TRQs on members’ economies in 2025. The scope of the TPP negotiations goes well beyond cutting tariffs; they also cover other areas that could impact agricultural trade, 

including investment, trade in services, technical barriers to trade, sanitary and phytosanitary barriers, 

etc. This analysis does not account for the gains that might be achieved in these other areas of the negotiations. This analysis also does not account for possible insulating domestic farm-policy responses or market 

responses (e.g., structural or efficiency changes in industries that lose their trade protections) or the productivity gains that may result from increased trade opportunities.
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Introduction 

The proposed Trans-Pacific Partnership (TPP) is a comprehensive trade and investment agreement 

under negotiation among 12 Pacific Rim countries, including the United States. With a combined 

population of about 800 million and a combined gross domestic product (GDP) of about $28 trillion, 

these 12 countries encompassed 11 percent of global population and almost 40 percent of global 

GDP in 2012 (table 1). The total size of their market for agricultural imports averaged $279 billion 

over 2010-12, 51 percent of which was sourced from TPP partners. TPP countries shipped 43 percent 

of their total agricultural exports (which averaged $312 billion over 2010-12) to their TPP partners in 

2012. Within the group, Canada and Mexico were the most dependent on their TPP partners as both 

a source of agricultural imports and a destination for agricultural exports (largely as a result of their 

trade with the United States).1

The TPP negotiations—begun in Melbourne, Australia, in March 2010—were scheduled to conclude 

in 2013, but are still underway as of October 2014. The leaders of TPP member countries aspire 

to achieve a high-quality, “21st century” agreement that will serve as a model for addressing both 

traditional and emerging trade issues. The membership’s Trade Ministers have translated this goal 

into five defining features of the agreement (USTR, 2011). First, the TPP is intended to be a living 

agreement that can be updated as appropriate to address emerging trade issues or to include new 

members. Second, the TPP’s provisions for comprehensive market-access reforms will eliminate 

or reduce tariffs and other barriers to trade and investment. Third, the TPP will support the development of integrated production and supply chains among its members. Fourth, the TPP will address 

cross-cutting issues, including regulatory coherence, competitiveness and business facilitation, 

support for small- and medium-sized enterprises, and the strengthening of institutions important 

to economic development and governance. Fifth, the TPP aims to promote trade and investment in 

innovative products and services.

1 Brunei Darussalam is excluded from the study due to data limitations.

Mary E. Burfisher, John Dyck, Birgit Meade, Lorraine Mitchell, 

John Wainio, Steven Zahniser, Shawn Arita, and Jayson Beckman

Agriculture in the Trans-Pacific 

Partnership
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These five features are being developed in detail in the agreement’s 29 chapters. The chapters 

address issues that include tariff and nontariff barriers to trade in goods and services, labor and the 

environment, investment protections, intellectual property rights, and financial and telecommunication services. Agriculture is addressed in multiple chapters of the agreement. The market-access 

chapter provides for the reduction or elimination of tariffs and nontariff barriers among the TPP 

members, including barriers to agricultural trade. The chapter also covers food security and agricultural-export competition. Other chapters that could have potentially significant implications for agriculture address customs, the environment, intellectual property rights, rules of origin, sanitary and 

phytosanitary (SPS) standards, and technical barriers to trade.

This report uses an agriculture-focused, multi-country, computable general equilibrium (CGE) 

model to analyze the potential effects of eliminating tariffs and tariff-rate quotas (TRQs) between 11 

of the TPP’s 12 member countries (see appendices 1-3 for a description of the model). Two scenarios 

were modeled to reflect developments between 2014 and 2025—the assumed implementation 

period for the TPP. The first is a “baseline scenario,” which simulates projections in 2014-25 for 

real GDP growth, increased supplies of capital and labor, changes in population and diets, and the 

implementation of a network of preferential trade agreements (PTAs) and unilateral tariff reforms 

already committed to in the region. A hypothetical and stylized TPP scenario adds a full elimination 

of intra-TPP agricultural and nonagricultural tariffs and tariff-rate quotas (TRQs) to the network of 

Table 1

Population, income, and agricultural trade of Trans-Pacific Partnership countries

Country 

name

Population GDP

GDP

per 

capita

Agricultural exports

(2010-12 avg.)

Agricultural imports

(2010-12 avg.)

2012

To 

world

To 

TPP

To 

TPP

From 

world

From 

TPP

From 

TPP

(Millions)

(Billions 

US$) (US$)

(Millions 

US$)

(Millions 

US$) Percent

(Millions 

US$)

(Millions 

US$) Percent

Australia 22.7 1,532.0 67,537 32,406.3 10,422.2 32% 10,716.3 4,882.7 46%

Brunei 

Darussalam 0.4 17.0 41,124 1.3 0.9 72% 154.9 108.0 70%

Canada 34.9 1,821.4 52,220 39,635.9 25,380.7 64% 30,717.4 21,628.5 70%

Chile 17.5 269.9 15,454 10,005.6 4,230.6 42% 5,131.5 1,004.8 20%

Japan 127.6 5,960.0 46,723 3,377.0 927.3 27% 62,142.6 30,680.1 49%

Malaysia 29.2 305.0 10,431 28,348.1 6,947.7 25% 15,347.6 3,809.8 25%

Mexico 120.9 1,178.0 9,747 19,889.3 16,846.6 85% 24,053.1 20,612.0 86%

New Zealand 4.4 167.4 37,749 19,691.3 6,935.6 35% 3,698.4 2,338.3 63%

Peru 30.0 203.8 6,796 4,009.5 1,409.0 35% 3,906.9 1,482.7 38%

Singapore 5.3 274.7 51,709 8,212.9 3,304.5 40% 11,348.8 4,732.1 42%

United States 313.9 16,240.0 51,734 134,537.4 56,596.8 42% 102,906.1 48,681.1 47%

Vietnam 88.8 155.8 1,755 12,042.5 2,476.4 21% 9,285.5 3,276.1 35%

Total 795.5 28,124.9 35,354 312,157.2 135,478.3 43% 279,408.9 143,236.5 51%

Note: TPP refers to the Trans-Pacific Partnership; GDP refers to gross domestic product. World trade includes trade with TPP partners.

Sources: World Bank, Country Data and the United Nations, Comtrade database.
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trade agreements.2 It is important to keep in mind the narrow definition of the TPP scenario in this 

analysis. The scope of the TPP negotiations goes well beyond cutting tariffs; it covers all aspects 

of commercial relations between TPP members. Among other topics under negotiation that could 

impact agricultural trade are investment regulations, trade in services, and nontariff barriers to trade 

(box 1).3 

This analysis captures the effects of eliminating tariffs and TRQs on members’ economies in 2025. 

Because not all tariffs are expected to be eliminated in the TPP agreement, it may overestimate the 

gains from this portion of the final agreement. However, because this analysis does not account for 

trade increases that might be achieved as a result of other areas of negotiation or the productivity 

gains that may result from increased trade opportunities, it may underestimate the overall trade 

gains of a final TPP agreement.

2 The Trans-Pacific Partnership (TPP) scenario imposes the productivity growth described in the baseline scenario and 

allows real gross domestic product to change in response to the elimination of intra-TPP tariffs (appendix 1).

3 The model does include a provision to restrict trade in meats between countries that are free of foot-and-mouth disease and those that are not (appendix 1).
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The estimated gains in agricultural trade from the 

Trans-Pacific Partnership (TPP) scenario presented 

in this study result from reductions in tariffs and 

tariff-rate quotas (TRQs)—however, the removal 

of nontariff measures (NTMs) may also generate 

significant growth in trade. According to the United 

Nations Multi-Agency Support Team (MAST) 

on NTMs, NTMs are policy measures other than 

tariffs that can potentially have an economic effect 

on international trade (UNCTAD, 2010).1 They 

may include sanitary and phytosanitary (SPS) 

measures, technical barriers to trade (TBTs), preshipment clearance, price and quantity controls, 

taxes, domestic subsidies, distribution restrictions, 

and rules of origin. Among these, SPS measures are 

among the most important for agricultural trade and 

are the focus of this discussion.

Under the World Trade Organization’s (WTO) 

Agreement on the Application of Sanitary and 

Phytosanitary Measures (1995), countries may take 

measures to protect human, animal, and plant health 

against threats arising from additives, contaminants, toxins, pests, and diseases in food, beverages, and feed as long as they are based on science, 

implemented with adequate risk assessment, and 

do not discriminate against foreign producers.2

While most SPS measures address legitimate 

concerns, some countries have been identified by 

their trading partners as maintaining SPS measures 

that are disproportionate to the actual levels of 

1 This definition comprises a wider set of measures 

than the commonly employed term nontariff barriers 

(NTBs). In contrast to NTBs, the nontariff measures include those that may not necessarily be trade or welfare 

reducing.

2 Measures for plant and animal health may be used to 

protect against the entry or spread of plant- or animalborne pests or diseases. These measures may also be 

more restrictive than international guidelines when supported by scientific justification or when the guidelines 

do not take into account specific characteristics or needs 

of a country.

risk. Because they can impede or even eliminate 

international trade flows, some SPS measures 

have prompted concern that they are being applied 

simply to protect domestic producers from import 

competition.

Unfortunately, it is difficult to assess the overall 

effects of SPS measures and other NTMs on 

trade. The literature on measuring and estimating 

the trade-restricting effects of NTMs is rich,3 but 

in practice, strategies for appropriate assessment 

remain elusive. Unlike tariffs (which are more 

transparent), SPS measures are not always quantifiable, vary substantially by measure, and may 

entail different levels and types of costs depending 

on the measure itself and the country it impacts. 

Furthermore, the removal of SPS measures may lead 

to important demand-side effects that are difficult to 

anticipate (e.g., consumers’ acceptance of hormone 

beef or products made from GMOs). Finally, as 

most SPS requirements address legitimate protections of human, animal, and plant health, it is not 

easy to identify which measures should be targeted 

for removal. Appropriate assessment requires 

precise data that are often difficult to come by and 

careful case-by-case investigation that is beyond the 

scope of this study. 

Among the objectives of the TPP negotiations are provisions that seek to address some of 

the outstanding SPS disputes in the region and 

strengthen the rules on SPS measures beyond those 

of the WTO. The starting point for resolving many 

of these disputes within the WTO is for a country to 

raise a specific trade concern about another country’s measure within the WTO’s SPS Committee. A 

sample selection of several major SPS-specific trade 

—continued

3 Ferrantino (2010) provides a review of the literature.

Box 1—Nontariff Measures in the TPP Region
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concerns4 involving TPP countries is summarized 

in the table below. The SPS measures in these trade 

concerns are viewed by exporters as being excessive to actual risk concerns, thereby unnecessarily 

4 World Trade Organization (WTO) specific trade 

concerns are not to be confused with WTO disputes. 

The former refers to a raised concern that does not normally lead to any formal adjudication. The latter refers 

to an official case that goes through the formal WTO 

dispute settlement system.

restricting trade. Although this study focuses on 

the removal of tariffs, resolution of concerns about 

specific SPS measures and other NTMs could lead 

to further gains in intraregional agricultural trade.

Box 1—Nontariff Measures in the TPP Region—continued

Box 1—Selected SPS-specific trade concerns among TPP countries

SPS measures Description of concern

Bovine Spongiform 

Encephalopathy (BSE)

Australia maintains strict import restrictions on beef from previously 

infected countries despite the World Organization for Animal Health 

(OIE, formerly known as the International Office for Epizootics) 

affirming minimal risk. Other TPP countries maintain partial restrictions outside of OIE recommendations.

Restrictions on pork and 

pork products

Australia and New Zealand have taken measures to restrict pork imports 

due to the risk of porcine reproductive & respiratory syndrome. Malaysia 

has banned and restricted pork products without notification or scientific 

assessment.

Poultry restrictions Several TPP countries continue to maintain bans on poultry products due 

to the risk of avian influenza and other viruses that are not aligned with 

OIE guidelines. Application of restrictions only to high-risk pathogens, 

and regionalization of bans have been recommended.

Ban on offal Concerns have been raised that Vietnam's ban on offal products over 

food safety concerns occurred without notification to the World Trade 

Organization or provision of scientific justification for the ban.

Food safety requirements Countries have raised concerns over the inspections, certifications, 

and other export requirements mandated by the U.S. 2009 Food Safety 

Enhancement Act. 

Note: SPS refers to sanitary and phytosanitary measures; TPP refers to the Trans-Pacific Partnership.

Source: World Trade Organization (2014) and U.S. Trade Representative (2013). 
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The Baseline Scenario in TPP Member Countries, 2014-25

Projected trends in TPP members’ real GDP, population and dietary preferences, growth in supplies 

of capital and labor, engagement in existing preferential trade agreements, and unilateral tariff 

reforms create a dynamic context for the implementation of the TPP. 

Economic, Population, and Dietary Trends 

The TPP will unite countries at different stages of economic development and with different levels 

of income and consumer-demand preferences. Most of the 11 TPP members covered in this study 

are classified as high-income countries, based on their relative income levels (World Bank, 2013). 

Malaysia, Mexico, and Peru are classified as upper-middle-income countries, and Vietnam, the 

country with the lowest per capita income in this group, is classified as a lower-middle-income 

country. 

Economic activity in the TPP region is projected to recover from the effects of the global financial 

crisis, with real GDP expected to grow at an average annual rate between 2.6 and 4.5 percent in 

most high-income member countries, and between 3.6 and 6.6 percent in middle-income member 

countries during 2014-25 (USDA-ERS, 2012) (table 2). Economic growth in Japan is projected to be 

positive, but comparatively low—largely because of the projected decline in the size of its population 

and labor force. Real per capita incomes are also projected to increase for all TPP members during 

2014-25, particularly in the middle-income countries of Malaysia, Mexico, Peru, and Vietnam. 

Table 2

Projected growth rates in real GDP and population in Trans-Pacific Partnership member 

countries, baseline scenario

Average annual 

(compound) real GDP 

growth rate, 2014-25

Average annual 

(compound) population 

growth rate, 2014-25

High-income countries

Australia 2.77 0.98

Canada 2.69 0.44

Chile 4.54 0.71

Japan 0.87 -0.27

New Zealand 2.84 0.70

Singapore 4.35 1.74

United States 2.61 0.69

Upper-middle-income countries

Malaysia 4.29 1.30

Mexico 3.60 0.94

Peru 4.62 0.90

Lower-middle-income countries

Vietnam 6.58 0.84

Note: GDP refers to gross domestic product. The baseline scenario imposes projected GDP growth rates.

Source: USDA, Economic Research Service, International Macroeconomic Data Set, 2012.
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Reflecting their middle-to-upper income levels and the maturity of diets of TPP members, population growth will be the main engine driving the 10.4-percent real growth in the region’s demand 

for food over 2014-25 under the baseline scenario. Growth in per capita food consumption will be 

modest because, in most TPP countries, daily per capita consumption is already close to or exceeds 

3,000 calories (except for Peru (2,563), Vietnam (2,690), and Japan (2,723)) (UN-FAO, 2013). 

While the total quantity of food consumed per capita is not expected to increase substantially, 

income growth and demographic/social changes will lead to some substitutions in the composition 

of the consumer food basket over the baseline time period (table 3). The model used in this study 

adjusts the parameter values that reflect the consumer demand response to rising incomes so that 

the baseline scenario simulates the changes in consumption patterns in the TPP region over 2014-25 

as projected by various sources (including the Economic Research Service’s (ERS) baseline projections, the USDA’s Foreign Agriculture Service’s Global Agricultural Information Network (GAIN) 

reports, and the United Nations Food and Agriculture Organization). These sources forecast a 

decline in households’ direct per capita consumption quantities of cereals in many TPP countries 

over 2014-25, although increased demand for meats and processed foods will lead to an increase in 

the region’s indirect consumption of cereals used as intermediate inputs into feeds and cereal-based 

food products.4 Growth in per capita consumption of dairy products, such as powdered/fluid milk 

and cheese, will be positive in most TPP member countries and relatively high in middle-income 

countries, but will decline modestly in Canada. 

Consumption trends described in the baseline scenario also reflect that income growth is associated 

with higher intakes of fresh fruits and vegetables in low- and middle-income countries (Hall et al., 

2009) and high-income countries (Pollack, 2001; Cook, 2011; Lalluka et al., 2007) due to factors 

that include improvements in the quality and diversity of fresh produce and the effects of higher 

income on the demand for fresh fruits and vegetables. Following Muhammad et al. (2011), the base4 See appendix 4 for detailed data on consumption trends.

Table 3

Percent changes in per capita consumption quantities in baseline scenario, 2014-25 

Australia Canada Chile Japan Malaysia Mexico

New 

Zealand Peru Singapore

United 

States Vietnam

Cereals -0.4 1.8 0.7 -0.3 -0.8 -0.5 -0.5 7.2 -0.4 -0.4 -0.9

Fruits/

vegetables 3.8 5.7 4.8 4.4 4.5 2.5 3.3 3.3 1.5 4.9 5.3

Oils and fats 3.0 0.3 10.3 0.4 11.9 7.2 3.1 12.5 2.4 -0.2 22.6

Meat 4.0 -3.3 12.1 1.6 14.4 10.9 1.3 12.6 3.1 3.5 20.8

Dairy 1.9 -1.8 10.6 0.4 10.8 11.4 2.4 9.2 4.8 2.2 19.6

Other foods 6.8 8.6 20.5 0.2 17.7 13.3 9.0 17.3 7.0 7.4 37.6

Nonfoods 18.4 22.5 40.5 15.2 37.1 30.2 24.6 42.6 16.8 19.9 55.9

Services 19.5 24.3 49.3 16.5 42.1 35.8 27.5 51.7 18.6 20.6 76.2

Note: Per capita consumption refers to private households’ direct demands for final products. Quantity changes for commodity categories are 

constructed by weighting the quantity changes of the individual commodities in the model by their shares in the value of consumption of each 

aggregated commodity category in 2014. 

Source: USDA, Economic Research Service, Trans-Pacific Partnership model.
8

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line simulation describes a relatively large increase in per capita consumption of “other foods” as 

incomes rise; this category includes a wide variety of high-value, frozen, and prepared processed 

foods and convenience items. Much of the growth in per capita incomes in the TPP region will be 

spent on nonfood goods and services, which are more sensitive to income growth than food items 

(Muhammad et al., 2011).

Trade Policy Trends and Preferential Trade Agreements 

For over three decades, TPP members have been actively engaged in negotiating PTAs, which have 

provided for greater market access in their trade with each other. This network of trade agreements 

in the Pacific Rim is part of what is sometimes called the “noodle bowl” because it has replaced the 

most-favored-nation tariff rates applied to all partners with a web of overlapping and differentiated 

bilateral preferential tariff rates. The earliest PTA in the region was signed by Australia and New 

Zealand in 1983. The most recent, implemented in 2013, was signed by Australia and Malaysia. 

Since signing a bilateral trade agreement with Canada in 1989, the United States has been an active 

participant in preferential trade pacts in the region. In 1994, it joined with Mexico and Canada to 

form the North American Free Trade Agreement (NAFTA), whose provisions (except for used cars) 

were fully implemented by 2008. The United States has also entered into bilateral trade agreements 

with Australia, Peru, Chile, and Singapore, and the provisions of all these agreements will largely be 

implemented by 2014. 

While most of the previously negotiated preferential tariff cuts in TPP members’ PTAs were scheduled to take place by 2014, some of the cuts are still to be implemented over the 2014-25 period. The 

overlay of the TPP on existing tariff-reform commitments means that the effects of the TPP must 

be measured in terms of its marginal impact, after accounting for the economic impacts of existing 

PTAs. In addition, Mexico will unilaterally implement tariff reductions on some agricultural 

commodities—these reforms are included in the PTA component of the baseline scenario. 

In this study, the bilateral tariff rates reported in the Global Trade Analysis Project (GTAP) v8 

database are aggregated from the HS6 level to GTAP sectors, and calculated from the MAcMaps 

database, which reports ad valorem tariffs and the ad valorem equivalents of specific tariffs and 

TRQs. The bilateral rates take into account trade preferences in place in 2007. Since then, however, 

TPP members have negotiated numerous additional PTAs among themselves. As of March 1, 2014, 

TPP members had notified 29 bilateral and regional PTAs to the World Trade Organization (WTO) 

that extended tariff preferences between at least two TPP members. While some of these 29 agreements are, to a certain degree, duplicative (e.g., Japan has a regional PTA with the 10 Association of 

Southeast Asian Nations (ASEAN)5 countries, but it also has bilateral PTAs with the four ASEAN 

countries that are part of the TPP—Brunei, Malaysia, Singapore, and Vietnam), they currently 

extend preferential tariffs on at least part of 80 bilateral trade flows between TPP members. Over 

half of the PTAs began implementation after 2007, while three-quarters of them are still undergoing 

phased implementation of cuts to some tariff lines.

The TPP is expected to build upon its members’ existing networks of bilateral and regional PTAs. 

To account for these previously negotiated tariff cuts, we constructed a database of intra-TPP trade 

agreements from PTA tariff schedules found in the World Trade Organization’s Regional Trade 

5 The Association of Southeast Asian Nations (ASEAN) includes Brunei Darussalam, Cambodia, Indonesia, Lao PDR, 

Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. 
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Table 4

Bilateral trade flows covered by preferential trade agreements (PTAs); start/end of implementation

Reporter 

name Australia Brunei Canada Chile Japan Malaysia

Australia --- 2010/2025 2009/2015 2010/2025

Brunei 2010/2025 --- 2006/2017 2008/2026 1992/2010

Canada --- 1997/2014

Chile 2009/2015 2006/2017 1997/2014 --- 2007/2022 2012/2016

Japan 2008/2026 2007/2022 --- 2008/2026

Malaysia 2010/2025 1992/2010 2012/2016 2008/2026 ---

Mexico 1994/2008 1999/2006 2005/2015

New Zealand 1983/1995 2010/2025 2006/2017 2010/2025

Peru 2009/2025 2009/2016 2012/2027

Singapore 2010/2025 2006/2017 2006/2017 2008/2026 1992/2010

United States 2005/2023 1994/2008 2004/2016

Vietnam 2010/2025 1992/2018 2008/2026 1992/2018

Total PTAs 7 7 4 10 7 7

—continued

Table 4

Bilateral trade flows covered by preferential trade agreements (PTAs); start/end of implementation—

continued

Reporter 

name Mexico New Zealand Peru Singapore

United 

States Vietnam

Total 

PTAs

Australia 1983/1995 2010/2025 2005/2023 2010/2025 7

Brunei 2010/2025 2006/2017 1992/2010 7

Canada 1994/2008 2009/2025 1994/2008 4

Chile 1999/2006 2006/2017 2009/2016 2006/2017 2004/2016 10

Japan 2005/2015 2012/2027 2008/2026 2008/2026 7

Malaysia 2010/2025 1992/2010 1992/2010 7

Mexico --- 2012/2023 1994/2008 5

New Zealand --- 2010/2025 2010/2025 6

Peru 2012/2023 --- 2009/2025 2009/2025 6

Singapore 2010/2025 2009/2025 --- 2004/2014 1992/2010 9

United States 1994/2008 2009/2025 2004/2014 --- 6

Vietnam 2010/2025 1992/2018 --- 6

Total PTAs 5 6 6 9 6 6 80

Note: Yellow shading denotes PTAs (covering goods) and Economic Integration Agreements (covering services); orange shading denotes PTAs 

only.

Source: USDA, Economic Research Service, Trans-Pacific Partnership model. 
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Agreements database. This was supplemented by constructing tariff schedules from the annexes of 

several trade agreements. Our database reflects the tariff cuts negotiated on over 50 of the 80 trade 

flows found in table 4 (none of the 14 trade flows between Brunei and its free trade agreement (FTA) 

partners are included as it is not in our model; PTAs are also not in our database if their last tariff 

cuts were implemented by 2007). These schedules of negotiated tariff reductions are used to implement bilateral tariff cuts among TPP members in the model’s database update, from 2007 to 2014, 

and for the baseline scenario over 2014-25. We use a simple average to aggregate the preferential 

tariff data from tariff lines to the sectors defined in the TPP model. For the database update, we 

calculate the percentage cut in the average rate over the phased liberalization period over 2007-14 

and apply that cut to the 2007 tariff rate reported in the GTAP database. Likewise, in the baseline 

scenario, we calculate the average tariff cuts between 2014 and 2025 and apply these cuts to the 2014 

tariffs in the TPP model. 

Figure 1 shows that, across the bilateral agricultural tariff schedules of the 30 PTAs in the TPP 

region for which data are available, a very large percent of tariff lines were scheduled to be duty free 

by 2014 (prior to the baseline period). Many of the PTA parties already levied duty-free rates in the 

base year of their agreements, either because their most-favored-nation (MFN)-applied tariff was 

Note: PTA refers to preferential trade agreements; TPP refers to the Trans-Pacific Partnership. ASEAN refers to the four TPP members 

that are members of the Association of Southeast Asian Nations (Brunei, Malaysia, Singapore, and Vietnam). 

Source: World Trade Organization, Regional Trade Agreements Information System and USDA, Economic Research Service. 

Figure 1

Agricultural tariff treatments under PTAs within the TPP region

Percentage of agricultural tariff lines

0

10

20

30

40

50

60

70

80

90

100

Duty free in base year of PTA Duty free by 2014 Duty free by 2025

Only partially cut by 2025 Excluded from cuts in PTA
11

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zero or because the parties were already extending duty-free access to their PTA partner through a 

program such as the Generalized System of Preferences (GSP). Across these 30 PTAs, only about 9 

percent of the tariff lines are scheduled to be cut to zero between 2014 and 2025, with many of these 

reductions already in the latter stages of being implemented; another 1.3 percent are scheduled to be 

cut, but not to zero. The remaining tariff lines (13 percent) are not scheduled to be reduced between 

2014 and 2025, either because they are already at the final level agreed upon in their PTA or because 

they are excluded from cuts due to their political or economic sensitivity. 

Tariff reductions still to take place under existing PTAs over the 2014-2025 baseline period are 

largest on imports into Peru from Singapore, Vietnam from Australia and New Zealand, Japan from 

the ASEAN TPP countries (Malaysia, Vietnam, Singapore, and Brunei), the United States from 

Australia, Japan from Chile, and Chile from Japan. A large number of agricultural tariffs on intraTPP trade will also decline in Mexico (although these are unilateral cuts of MFN rates, so they also 

apply to non-TPP countries). 

Despite the intensity of PTA activity in the region, the high tariffs that remain among TPP partners on some agricultural products, as well as the trade flows between TPP members that have not 

already negotiated bilateral PTAs, leave scope for significant additional agricultural trade liberalization under the TPP. Figures 2-12 illustrate TPP members’ bilateral agricultural tariffs in 2025, in the 

Source: USDA, Economic Research Service, Trans-Pacific Partnership model.

Figure 2

Australia’s tariff structure, 2025

Canada

Chile

Malaysia

Mexico

New Zealand

Peru

Singapore

United States

Vietnam

Japan

Rest of world

Tariff rate (percent) Wheat Corn Other grains Fruits/vegetables

Oilseeds

Sugar cane/beets

Fibers

Other crops

Bovines

Pigs

Poultry

Other animals

Resources

Bovine meat

Pork

Poultry meat

Other meat

Sugar

Oils/fats

Whey

Powdered milk

Butter

Cheese

Other dairy

Other foods

Rice

0

2

4

6

8

10

12

14

16

18

Figures 2-12 – Agricultural tariff structures of Trans-Pacific Partnership (TPP) members with TPP partners 

and rest of world, 2025
12

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Source: USDA, Economic Research Service, Trans-Pacific Partnership model.

Figure 3

Canada's tariff structure, 2025

Tariff rate (percent)

Australia

Chile

Malaysia

Mexico

New Zealand

Peru

Singapore

United States

Vietnam

Japan

Rest of world

0

5

10

15

20

25

30

35

40

Rice

Wheat

Corn

Other grains

Fruits/vegetables

Oilseeds

Sugar cane/beet

Fibers

Other crops

Bovines

Pigs

Poultry

Other animals

Resources

Bovine meat

Pork

Poultry meat

Other meat

Sugar

Oils/fats

Whey

Powdered milk

Butter

Cheese

Other dairy

Other foods

Source: USDA, Economic Research Service, Trans-Pacific Partnership model.

Figure 4

Chile's tariff structure, 2025

Tariff rate (percent)

Australia

Canada

Malaysia

Mexico

New Zealand

Peru

Singapore

United States

Vietnam

Japan

Rest of world

Rice

Wheat

Corn

Other grains

Fruits/vegetables

Oilseeds

Sugar cane/beet

Fibers

Other crops

Bovines

Pigs

Poultry

Other animals

Resources

Bovine meat

Pork

Poultry meat

Other meat

Sugar

Oils/fats

Whey

Powdered milk

Butter

Cheese

Other dairy

Other foods

0

2

4

6

8

10

12

14

16
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Source: USDA, Economic Research Service, Trans-Pacific Partnership model. 

Figure 5

Japan's tariff structure, 2025

Tariff rate (percent)

Australia

Canada

Chile

Malaysia

Mexico

New Zealand

Peru

Singapore

United States

Vietnam

Rest of world

0

100

200

300

400

500

600

700

800

Rice

Wheat

Corn

Other grains

Fruits/vegetables

Oilseeds

Sugar cane/beet

Fibers

Other crops

Bovines

Pigs

Poultry

Other animals

Resources

Bovine meat

Pork

Poultry meat

Other meat

Sugar

Oils/fats

Whey

Powdered milk

Butter

Cheese

Other dairy

Other foods

Source: USDA, Economic Research Service, Trans-Pacific Partnership model. 

Figure 6

Malaysia's tariff structure, 2025

Tariff rate (percent)

Australia

Canada

Chile

Japan

Mexico

New Zealand

Peru

Singapore

United States

Vietnam

Rest of world

0

5

10

15

20

25

30

35

40

45

Rice

Wheat

Corn

Other grains

Fruits/vegetables

Oilseeds

Sugar cane/beet

Fibers

Other crops

Bovines

Pigs

Poultry

Other animals

Resources

Bovine meat

Pork

Poultry meat

Other meat

Sugar

Oils/fats

Whey

Powdered milk

Butter

Cheese

Other dairy

Other foods
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Source: USDA, Economic Research Service, Trans-Pacific Partnership model. 

Figure 7

Mexico's tariff structure, 2025

Tariff rate (percent)

Australia

Canada

Chile

Japan

Malaysia

New Zealand

Peru

Singapore

United States

Vietnam

Rest of world

0

10

20

30

40

50

60

70

80

Rice

Wheat

Corn

Other grains

Fruits/vegetables

Oilseeds

Sugar cane/beet

Fibers

Other crops

Bovines

Pigs

Poultry

Other animals

Resources

Bovine meat

Pork

Poultry meat

Other meat

Sugar

Oils/fats

Whey

Powdered milk

Butter

Cheese

Other dairy

Other foods

Source: USDA, Economic Research Service, Trans-Pacific Partnership model. 

Tariff rate (percent)

Australia

Canada

Chile

Japan

Malaysia

Mexico

Peru

Singapore

United States

Vietnam

Rest of world

0

2

4

6

8

10

12

14

Rice

Wheat

Corn

Other grains

Fruits/vegetables

Oilseeds

Sugar cane/beet

Fibers

Other crops

Bovines

Pigs

Poultry

Other animals

Resources

Bovine meat

Pork

Poultry meat

Other meat

Sugar

Oils/fats

Whey

Powdered milk

Butter

Cheese

Other dairy

Other foods

Figure 8

New Zealand's tariff structure, 2025
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Source: USDA, Economic Research Service, Trans-Pacific Partnership model. 

Figure 9

Peru's tariff structure, 2025

Tariff rate (percent)

Australia

Canada

Chile

Japan

Malaysia

Mexico

New Zealand

Singapore

United States

Vietnam

Rest of world

0

5

10

15

20

25

30

35

40

45

50

Rice

Wheat

Corn

Other grains

Fruits/vegetables

Oilseeds

Sugar cane/beet

Fibers

Other crops

Bovines

Pigs

Poultry

Other animals

Resources

Bovine meat

Pork

Poultry meat

Other meat

Sugar

Oils/fats

Whey

Powdered milk

Butter

Cheese

Other dairy

Other foods

Source: USDA, Economic Research Service, Trans-Pacific Partnership model. 

Figure 10

Singapore's tariff structure, 2025

Tariff rate (percent)

Australia

Canada

Chile

Japan

Malaysia

Mexico

New Zealand

Peru

United States

Vietnam

Rest of world

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Rice

Wheat

Corn

Other grains

Fruits/vegetables

Oilseeds

Sugar cane/beet

Fibers

Other crops

Bovines

Pigs

Poultry

Other animals

Resources

Bovine meat

Pork

Poultry meat

Other meat

Sugar

Oils/fats

Whey

Powdered milk

Butter

Cheese

Other dairy

Other foods
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Source: USDA, Economic Research Service, Trans-Pacific Partnership model. 

Figure 11

United States' tariff structure, 2025

Tariff rate (percent)

Australia

Canada

Chile

Japan

Malaysia

Mexico

New Zealand

Peru

Singapore

Vietnam

Rest of world

0

10

20

30

40

50

60

Rice

Wheat

Corn

Other grains

Fruits/vegetables

Oilseeds

Sugar cane/beet

Fibers

Other crops

Bovines

Pigs

Poultry

Other animals

Resources

Bovine meat

Pork

Poultry meat

Other meat

Sugar

Oils/fats

Whey

Powdered milk

Butter

Cheese

Other dairy

Other foods

Source: USDA, Economic Research Service, Trans-Pacific Partnership model. 

Figure 12

Vietnam's tariff structure, 2025

Tariff rate (percent)

Australia

Canada

Chile

Japan

Malaysia

Mexico

New Zealand

Peru

Singapore

United States

Rest of world

0

5

10

15

20

25

30

35

40

Rice

Wheat

Corn

Other grains

Fruits/vegetables

Oilseeds

Sugar cane/beet

Fibers

Other crops

Bovines

Pigs

Poultry

Other animals

Resources

Bovine meat

Pork

Poultry meat

Other meat

Sugar

Oils/fats

Whey

Powdered milk

Butter

Cheese

Other dairy

Other foods
17

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absence of the TPP, for the commodities in this report’s model. The graphs reveal variation across 

the model’s commodity groups, as well as across the tariffs that each country applies bilaterally 

on imports from its TPP partners. The variation in the scale of each country’s vertical axis demonstrates the differences in the overall height of the most restrictive tariffs for each country. 

While existing PTAs will marginally improve market access for some countries over the 2014-25 

baseline for these and many other agricultural products, tariff peaks above 20 percent ad valorem 

remain on many product categories. By market, tariff peaks will remain in 2025 on Canadian dairy 

and poultry imports; Japanese imports of bovine meat, rice and other grains, sugar, dairy products, 

and selected fruits and vegetables; Malaysia’s imports of rice and selected processed products; 

Mexican imports of dairy and poultry products, sugar, and selected fruits and vegetables; Peruvian 

dairy product imports; U.S. imports of sugar and selected dairy products; and Vietnam’s imports of 

pork, poultry, selected dairy products, processed foods, and fruits and vegetables. 

Trade and Production Trends, 2014-25 

The baseline scenario results depict projected growth in trade and production over 2014-25 without 

the TPP. The baseline results for growth in intra-TPP agricultural trade by country are in table 5

and decompose the roles of growth (in real GDP, supplies of labor and capital, population, and food 

demand) and existing PTA and unilateral tariff-reform commitments. Overall, under the baseline 

scenario, the value of intraregional agricultural trade is projected to increase by 9.2 percent over 

2014-25, an increase worth nearly $12 billion in 2007 U.S. dollars. The middle-income countries 

of Peru, Mexico, Vietnam, and Malaysia will be among the fastest growing markets for imports of 

the region’s agricultural products, and Chile, New Zealand, Vietnam, and Singapore will be among 

the fastest growing agricultural exporters to the region. U.S. agricultural exports to the region are 

projected to increase by 7 percent ($3.4 billion) over the 2014-25 baseline period, while imports will 

increase by 8 percent ($3.4 billion). The trade flows reported for Singapore, which are large relative 

to the size of its agricultural sector, reflect its role as a major importer and re-exporter of food products within the Asian region. 

Table 5

Growth in value of intra-TPP agricultural trade by country in baseline scenario, 2014-25

Australia Canada Chile Japan Malaysia Mexico

New 

Zealand

Agricultural imports from TPP partners

 Base value, 2014 ($US millions) 4,410 17,523 737 37,796 2,597 12,198 2,013

 Percent change due to growth 13.6 4.3 8.9 8.7 12.2 17.4 6.3

 Percent change due to PTAs 0.0 0.0 0.1 0.1 0.1 -0.2 0.1

 Value in 2025 ($US millions) 5,013 18,271 804 41,118 2,915 14,296 2,141

Agricultural exports to TPP partners

 Base level, 2014 ($US millions) 12,385 24,881 5,942 1,055 4,188 13,106 7,054

 Percent change due to growth 9.7 8.4 20.7 -5.9 7.9 10.9 13.5

 Percent change due to PTAs 0.3 0.0 0.2 0.0 0.1 0.0 0.7

 Value in 2025 ($US millions) 13,629 26,982 7,190 993 4,522 14,536 8,055

—continued
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Projected growth in GDP, supplies of capital and labor, population, and dietary changes will 

account for nearly all of the growth in intra-TPP agricultural trade over the baseline period. The 

trade liberalization commitments in the region’s PTAs, and Mexico’s unilateral reforms that will be 

implemented over 2014-25, are estimated to have positive but very small effects on most members’ 

intra-TPP agricultural trade; they will, however, have a small negative effect on U.S. exports to 

the region. In part, these small trade impacts reflect that some of the PTAs will already have been 

substantially implemented prior to 2014. Also, many of these agreements have either fully excluded 

or only partially cut the high tariffs maintained on politically sensitive agricultural products. 

By commodity, growth rates in intra-TPP agricultural trade under the baseline scenario will be 

highest for poultry, “other animals,” bovine meat (includes beef and mutton), fibers, pork, and fruits 

and vegetables (table 6). In value terms, growth will be largest for “other foods” (an aggregate category that includes processed foods and feeds), fruits and vegetables, bovine meat, and pork. 

Agricultural production in the TPP countries will respond to the demand- and supply-side developments projected to occur during 2014-25. Demand-side drivers in the baseline scenario include 

population growth, growth in incomes and resulting changes in consumer food demand, and the 

import-price effects from the implementation of tariff cuts in existing PTAs. Supply-side drivers 

in the baseline scenario include growth in productivity and in countries’ endowments of labor and 

capital. Growth in labor and capital supplies will lead to changes in relative factor costs, within and 

across countries. An important development will be the effects of a projected decline in the supply of 

unskilled relative to skilled labor in all TPP countries. In Japan, an absolute decline in the size of its 

unskilled labor force will lead to relatively high wage costs and a loss of competitiveness in sectors 

that use this type of labor intensively, particularly so for many agricultural and food products. 

Agricultural output quantities in all TPP countries, except Japan and Singapore, will increase over 

the 2014-25 baseline period (table 7). The United States is, by far, the largest agricultural producer 

within the proposed trade pact, and growth in its real agricultural output between 2014 and 2015 

will range from 8.5 percent for meat to about 17 percent for “other agriculture” (a diverse sector 

Table 5

Growth in value of intra-TPP agricultural trade by country in baseline scenario, 2014-25—continued

Peru Singapore United States Vietnam Total

Agricultural imports from TPP partners

 Base value, 2014 ($US millions) 904 2,580 41,420 1,847 124,026

 Percent change due to growth 17.2 15.0 8.3 11.4 9.2

 Percent change due to PTAs 1.5 0.1 0.0 2.2 0.1

 Value in 2025 ($US millions) 1,074 2,968 44,846 2,100 135,545

Agricultural exports to TPP partners

 Base level, 2014 ($US millions) 1,446 1,222 48,983 3,763 124,026

 Percent change due to growth 10.8 10.0 7.1 13.3 9.2

 Percent change due to PTAs 0.1 1.1 -0.1 0.5 0.1

 Value in 2025 ($US millions) 1,603 1,357 52,395 4,284 135,545

Note: TPP refers to the Trans-Pacific Partnership; PTAs refer to preferential trade agreements. Base values in 2014 are simulation results from 

the model update. All values are in 2007 U.S. dollars. Growth component includes effects of increases in gross domestic product, supplies of 

labor and capital, population, and dietary changes.

Source: USDA, Economic Research Service, TPP model.
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which includes sugar, fibers, “other crops,” “other animal,” and “other foods”). Japan is the secondlargest agricultural producer in the region, but its real output of most agricultural products, except 

for fruits and vegetables, is expected to decline between 2014 and 2025. Agricultural output growth 

is estimated to be very strong in Vietnam, Chile, and Peru over the baseline period. Although most 

TPP members’ agricultural output will grow, an increasing proportion of their productive resources 

is expected to shift from agriculture toward manufacturing and services. This structural change 

reflects, in part, that dietary requirements are already largely met in the TPP countries (although 

quality is increasing) and that most of the rise in income will be spent on nonfood goods and 

services.

Table 6

Change in value of intra-TPP agricultural trade by commodity in baseline scenario, 

2014-25

Commodity

2014 

intra-TPP trade

Change in value of intraTPP trade, 2014-25Percent change in value of 

intra-TPP trade, 2014-25

$ US millions Percent

Rice 716 64 8.9

Wheat 3,698 317 8.6

Corn 5,468 298 5.4

Other grains 2,217 91 4.1

Fruit/vegetables 14,605 2,455 16.8

Oilseeds 5,651 34 0.6

Sugar cane/beet 2 0 -1.2

Fibers 920 157 17.1

Other crops 3,988 485 12.2

Bovines 2,613 117 4.5

Pigs 900 77 8.6

Poultry 967 207 21.4

Other animals 704 140 19.9

Bovine meat 9,849 1,928 19.6

Pork 5,618 933 16.6

Poultry meat 3,211 87 2.7

Other animal products 1,171 -128 -10.9

Sugar 1,167 18 1.5

Oils/fats 5,473 140 2.6

Whey 552 38 6.8

Milk powder 1,679 238 14.2

Butter 897 66 7.4

Cheese 1,353 183 13.5

Other dairy 1,469 153 10.5

Other foods 49,143 3,419 7.0

Total 124,026 11,519 9.3

Note: TPP refers to the Trans-Pacific Partnership. Base values in 2014 are simulation results from the model update. All 

values are in 2007 U.S. dollars. 

Source: USDA, Economic Research Service, TPP model.
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Table 7 

Changes in agricultural output in baseline scenario, 2014-25 

Australia Canada Chile Japan Malaysia Mexico

Value of output in 2014, $US millions

Cereals 9,887 9,541 2,474 59,518 1,274 5,551

Fruits/vegetables 7,244 3,559 4,731 39,429 604 11,612

Oils and fats 3,888 9,194 611 7,198 32,078 3,123

Meat 38,807 35,768 6,178 57,666 3,501 19,289

Dairy 17,678 16,566 3,021 38,528 1,409 14,652

Other agriculture 60,310 60,861 19,238 384,006 11,862 76,968

Total agriculture 137,813 135,490 36,252 586,344 50,727 131,197

Percent change in quantities in baseline scenario, 2014-25

Cereals 11.4 12.8 24.7 -3.0 12.1 12.7

Fruits/vegetables 15.4 23.0 21.4 0.6 9.8 11.4

Oils and fats 10.8 15.6 39.2 -9.4 7.9 19.7

Meat 13.2 9.0 47.9 -7.2 23.7 24.6

Dairy 17.1 7.8 25.9 -3.4 29.7 21.7

Other agriculture 17.1 16.2 34.0 -3.6 22.8 23.9

—continued

Table 7 

Changes in agricultural output in baseline scenario, 2014-25—continued

New Zealand Peru Singapore United States Vietnam

Value of output in 2014, $US millions

Cereals 323 3,433 147 76,422 9,075

Fruits/vegetables 3,901 3,300 25 67,113 3,370

Oils and fats 1,652 1,881 280 46,558 449

Meat 12,027 6,803 600 283,768 3,209

Dairy 17,748 3,628 401 132,504 489

Other agriculture 11,380 21,078 3,094 550,741 15,310

Total agriculture 47,032 40,122 4,547 1,157,105 31,902

Percent change in quantities in baseline scenario, 2014-25

Cereals 14.5 20.3 20.4 10.2 5.4

Fruits/vegetables 18.4 14.8 -0.2 16.3 17.1

Oils and fats 16.1 29.8 22.1 10.7 30.6

Meat 12.5 25.3 18.8 8.5 32.9

Dairy 9.9 20.1 30.1 14.1 41.5

Other agriculture 20.3 29.9 16.7 16.7 37.7

Notes: Base values in 2014 are simulation results from the model update. All values are in 2007 dollars. Quantity changes for commodity 

categories are constructed by weighting the quantity changes of the individual commodities in the model by their shares in the value of output in 

2014 of each aggregated commodity category. 

Source: USDA, Economic Research Service, Trans-Pacific Partnership model. 
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Impacts of Eliminating Tariffs and TRQs Within the TPP 

in 2025

A hypothetical and stylized TPP scenario eliminates all remaining intra-TPP agricultural and nonagricultural tariffs and TRQs. This section discusses the TPP’s impacts on members’ real GDP, agricultural trade, and agricultural output.

Impacts on Real GDP

The differences in real GDP in 2025 with the TPP, compared with the baseline scenario, are in table 

8. Tariff and TRQ elimination in the TPP scenario results in minimal impacts at the macroeconomic 

level, with zero or small positive effects on members’ real GDP. The largest macroeconomic impact 

of the TPP, in percentage terms, takes place in Vietnam, where real GDP would be 0.10 percent 

higher in 2025 with the implementation of the TPP than it would be under the baseline. Small gains 

in real GDP will also accrue to Japan (0.02 percent), and to New Zealand, Malaysia, and Mexico (all 

0.01 percent). The TPP is projected to have no measurable impacts on real GDP in any other TPP 

member countries. 

Impacts on Agricultural Trade Within the TPP

While the TPP is unlikely to have substantial macroecononomic effects, the TPP scenario has 

important implications for agricultural trade among the member countries. In 2025, the value of 

agricultural trade among TPP members is projected to be 6 percent (about $8.5 billion in 2007 U.S. 

Table 8

Percentage difference in real GDP in 2025 in the hypothetical 

TPP scenario (relative to baseline) 

High-income countries

Australia 0.00

Canada 0.00

Chile 0.00

Japan 0.02

New Zealand 0.01

Singapore 0.00

United States 0.00

Upper-middle-income countries

Malaysia 0.01

Mexico 0.01

Peru 0.00

Lower-middle-income countries

Vietnam 0.10

Note: TPP refers to the Trans-Pacific Partnership. GDP refers to gross domestic product. 

Hypothetical TPP scenario eliminates tariffs and TRQs between TPP members. 

Source: USDA, Economic Research Service, TPP model.
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dollars) greater with the TPP, compared with the baseline scenario without the TPP (table 9). Every 

member country will experience growth in both its agricultural imports and exports. Increases in 

agricultural trade by the TPP’s two largest economies, the United States and Japan, account for a 

large share of the trade expansion. The United States will supply about one-third of the expansion 

in intraregional agricultural exports—the value of U.S. agricultural exports to TPP partners in 2025 

is estimated to be 5 percent ($2.8 billion) higher under the TPP scenario than in the baseline. Japan 

will account for almost 70 percent of the expansion in intraregional agricultural imports—the value 

of Japan’s agricultural imports from its TPP partners in 2025 is expected to be 14 percent ($5.8 

billion) higher than in the baseline (table 10). 

By commodity, the percentage increase in the value of intraregional trade due to the elimination 

of intraregional tariffs and TRQs will be largest for rice, sugar, and “other meat” (which includes 

animal fats and oils and offals). In absolute value terms, the increase will be greatest for bovine 

meat (which includes beef and mutton), “other foods” (which includes processed foods and feeds), 

and poultry meat; although their growth rates are lower, these commodities have large initial values 

in intra-TPP trade so even relatively small percentage gains translate into relatively large absolute 

gains in their trade value (table 11). 

The increased trade in meats of about $3.7 billion will account for 43 percent of the expansion in the 

value of intra-TPP trade in 2025, most of which is supplied by Australia, the United States, Canada, 

and New Zealand.6 About three-quarters of the increase in meat exports is destined for Japan, whose 

meat imports (mostly bovine meat) will increase by about $2.8 billion relative to the baseline. In the 

case of Japan’s pork imports, in addition to an ad valorem tariff, Japan’s Gate Price system assesses 

an additional duty on each pork shipment whose unit value is less than the Gate Price (524 yen/kg). 

The duty is the difference between the Gate Price and the import unit value. The complexity and 

variability in this system made it impossible to estimate a tariff equivalent of the Gate Price duties, 

and the model results thus reflect elimination of the ad valorem tariff but the continued existence of 

the Gate Price system. Elimination of the Gate Price system would lead to further increases in pork 

imports. 

In terms of bilateral flows, the growth in value of U.S. meat exports is largely due to increased 

poultry meat sales to Canada and increased sales of all types of meats to Japan and Vietnam. The 

growth in value of Australian meat exports is mainly due to increased sales of bovine meat to Japan, 

the United States, and Canada. Much of Canada’s meat-export growth will be driven by increased 

sales of poultry meat to Japan, Mexico, and Vietnam. The largest growth in New Zealand’s meat 

exports will take place in sales of bovine meat to Japan, Canada, the United States, and Mexico.

Dairy products will account for nearly 20 percent of the expansion in intra-TPP agricultural trade 

resulting from the TPP scenario due to the high tariffs that many TPP countries currently apply to 

dairy product imports (even though dairy products account for less than 5 percent of 2025 intra-TPP 

agricultural trade in the baseline scenario). The largest growth in dairy imports in 2025, relative to 

the baseline scenario, in both percentage terms and value of imports, is in Canada and Japan. Most 

of the increase in the region’s dairy import demand is met by the United States, mainly in increased 

sales to Japan and Canada, and by New Zealand, with increased exports to Mexico, Canada, the 

6 See appendix 2 for a mapping of the model’s 29 commodities into aggregated commodity sectors. Meats include 

bovines, pigs, poultry, bovine meat, pork, poultry meat, and other meat products. 
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Table 9

Effects of the TPP scenario on value of agricultural exports to TPP partners in 2025

Australia Canada Chile JapanMalaysia MexicoNew 

Zealand Peru

SingaporeUnited 

States

Vietnam Total

Baseline 2025 exports to TPP partners ($US millions)

Cereals 399 2,445 217 8 8 58 3 5 1 9,582 142 12,869

Fruits/

vegetables 408 1,430 1,778 18 156 5,851 751 372 3 5,906 387 17,061

Oilseeds 

and 

products

204 3,635 17 26 2,160 94 17 24 66 5,030 24 11,297

Meat 6,231 7,560 997 22 299 1,320 1,811 140 12 9,094 64 27,550

Dairy 1,387 182 110 5 97 74 2,821 4 144 1,800 2 6,627

Other 

agriculture 5,000 11,729 4,070 914 1,803 7,139 2,652 1,059 1,130 20,982 3,664 60,142

Total 

agriculture 13,629 26,982 7,190 993 4,522 14,536 8,055 1,603 1,357 52,395 4,284 135,545

Percentage change in value in 2025 relative to the baseline, due to TPP

Cereals 40.2 3.0 0.0 5.4 -5.4 6.2 1.6 -6.3 -16.6 6.9 59.1 7.7

Fruits/

vegetables 4.6 7.2 1.7 9.6 0.3 0.0 3.3 1.4 3.6 3.7 0.1 2.4

Oilseeds 

and 

products

-0.5 0.5 8.1 14.5 1.8 0.1 3.9 0.3 5.5 0.7 1.0 0.9

Meat 25.8 6.5 4.8 17.0 0.5 7.7 21.9 10.3 1.6 11.0 0.8 13.3

Dairy 25.7 37.3 21.9 15.3 12.0 10.9 18.5 3.8 8.1 32.2 8.4 23.9

Other 

agriculture 9.3 2.2 0.9 7.9 7.0 -0.2 3.6 6.2 16.7 1.6 5.1 3.0

Total 

agriculture 19.2 3.7 2.0 8.4 3.9 0.7 12.9 5.3 15.0 5.4 6.4 6.3

Change in value in 2025 relative to the baseline, due to TPP ($US millions)

Cereals 161 73 0 0 0 4 0 0 0 664 84 985

Fruits/

vegetables 19 104 31 2 0 0 24 5 0 221 0 406

Oilseeds 

and 

products

-1 18 1 4 38 0 1 0 4 36 0 101

Meat 1,610 490 48 4 1 101 396 14 0 1,000 1 3,665

Dairy 357 68 24 1 12 8 523 0 12 580 0 1,585

Other 

agriculture 466 254 38 73 126 -14 95 65 188 326 187 1,805

Total 

agriculture 2,611 1,007 142 83 177 99 1,039 85 204 2,827 273 8,548

Notes: TPP refers to the Trans-Pacific Partnership. Values are in 2007 U.S. dollars. 

Source: USDA, Economic Research Service, TPP model. 
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Table 10

Effects of the TPP scenario on value of agricultural imports from TPP partners in 2025

Australia Canada Chile JapanMalaysia MexicoNew 

Zealand Peru

SingaporeUnited 

States

Vietnam Total

Baseline 2025 imports from TPP partners ($US millions)

Cereals 33 610 362 5,983 331 3,181 60 490 83 1,410 326 12,869

Fruits/

vegetables 459 3,565 41 2,268 201 831 167 80 337 9,022 89 17,061

Oilseeds and 

products 363 1,015 42 4,080 259 2,291 175 23 274 2,469 307 11,297

Meat 614 2,756 85 11,826 192 2,879 221 30 559 8,134 256 27,550

Dairy 473 561 18 1,783 792 1,094 89 55 547 914 301 6,627

Other 

agriculture 3,071 9,765 255 15,179 1,140 4,019 1,430 395 1,169 22,897 822 60,142

Total 

agriculture 5,013 18,271 804 41,118 2,915 14,296 2,141 1,074 2,968 44,846 2,100 135,545

Percentage change in value in 2025 relative to the baseline, due to TPP

Cereals 1.7 0.3 0.5 15.9 4.7 -0.1 1.9 0.3 2.0 0.3 3.0 7.7

Fruits/

vegetables 1.1 0.2 3.8 14.0 1.8 0.3 1.3 0.7 0.0 0.1 65.5 2.4

Oilseeds and 

products 0.9 2.0 2.2 0.3 0.3 0.0 0.4 11.5 1.6 0.4 15.2 0.9

Meat 2.5 16.4 0.6 23.9 -0.5 1.4 2.7 1.1 0.1 3.0 29.7 13.3

Dairy 0.6 65.3 1.1 45.1 0.1 17.1 2.3 16.7 1.8 20.5 4.9 23.9

Other 

agriculture 0.5 0.3 1.0 6.0 15.0 0.2 1.1 2.3 0.8 2.0 22.3 3.0

Total 

agriculture 0.8 4.8 0.9 14.2 6.6 1.6 1.3 2.2 0.8 2.0 18.5 6.3

Change in value in 2025 relative to the baseline, due to TPP ($US millions)

Cereals 1 2 2 951 15 -4 1 1 2 4 10 985

Fruits/

vegetables 5 5 2 317 4 2 2 1 0 10 58 406

Oilseeds and 

products 3 20 1 10 1 0 1 3 4 11 47 101

Meat 16 451 0 2,829 -1 41 6 0 0 247 76 3,665

Dairy 3 367 0 804 1 187 2 9 10 187 15 1,585

Other 

agriculture 14 26 3 918 171 8 16 9 9 448 183 1,805

Total 

agriculture 41 871 8 5,830 191 235 28 23 25 908 388 8,548

Notes: TPP refers to the Trans-Pacific Partnership. Values are in 2007 U.S. dollars. 

Source: USDA, Economic Research Service, TPP model. 
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United States, and Japan. Growth in Australian dairy exports to the TPP region is mostly due to an 

expansion of its powdered milk sales to Japan.

An important caveat to this analysis is that the model does not account for possible policy or market 

responses that could mitigate the trade impacts of tariff elimination among the TPP countries. In 

fact, insulating price or income-support programs or efficiency gains as a result of structural changes 

in previously protected sectors could occur. For example, the projected growth in Canadian dairy 

Table 11

Change in value of intra-TPP agricultural trade in 2025 with tariff and tariff-rate quota 

elimination, relative to the baseline 

Commodity

2025 intra-TPP 

trade, baseline 

Change in value 

of 2025 intra-TPP 

trade with TPP 

Percent change 

in value of 2025 intraTPP trade with TPP

$US millions Percent

Rice 780 604 77.5

Wheat 4,015 251 6.2

Corn 5,766 89 1.5

Other grains 2,308 41 1.8

Fruits/vegetables 17,061 406 2.4

Oilseeds 5,685 -7 -0.1

Sugar cane/beet 2 0 1.0

Fibers 1,077 3 0.2

Other crops 4,473 29 0.7

Bovines 2,729 31 1.1

Pigs 977 2 0.2

Poultry 1,174 32 2.7

Other animals 844 5 0.6

Bovine meat 11,777 2,161 18.3

Pork 6,550 157 2.4

Poultry meat 3,299 796 24.1

Other meat 1,043 487 46.6

Sugar 1,185 569 48.0

Oils and fats 5,612 108 1.9

Whey 590 69 11.8

Powdered milk 1,917 464 24.2

Butter 963 265 27.6

Cheese 1,536 255 16.6

Other dairy 1,622 531 32.8

Other foods 52,562 1,199 2.3

Total agriculture 135,545 8,548 6.3

Notes: TPP refers to the Trans-Pacific Partnership. Values in 2025 are simulation results of the baseline scenario. All values 

are in 2007 U.S. dollars.

Source: USDA, Economic Research Service, TPP model.
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imports is based on the assumption that Canada eliminates its tariffs on dairy-product imports from 

other TPP countries. Canada’s maintenance of over-quota tariffs on dairy, poultry, and egg products 

is an integral part of that country’s supply-management system in these sectors, and the provision of 

duty-free access for dairy products from major dairy-producing countries, such as the United States 

and New Zealand, in a TPP would be a major policy departure for Canada. A more detailed discussion of the Canadian supply-management program is in box 2. 

Intra-TPP trade in cereals is estimated to be about 8 percent higher in value in 2025 under the TPP 

scenario than in the 2025 baseline. Almost all (97 percent) of the expansion in intra-TPP cereals 

trade is accounted for by growth in Japan’s grain imports, mostly of rice and wheat. Japan’s imports 

of rice rise substantially under the TPP scenario, sourced primarily from the United States, with 

small increases from Australia and Vietnam. Despite an overall doubling of Japan’s rice imports, 

however, the import share of Japan’s domestic market only rises to 10 percent and its domestic 

production declines by less than 3 percent. Although eliminating Japan’s extremely high overquota tariffs for rice is a radical change in policy, it would be difficult for suppliers in the TPP 

group to provide much more rice to the Japanese market than is indicated in the model results. 

Japanese consumers have a strong preference for the japonica rice variety produced in Japan, and 

box 3 describes the constraints in Australia and the United States in increasing their production of 

japonica.

Tariff and TRQ elimination in a TPP results in a very small increase in the value of Japan’s corn 

imports in 2025, relative to the baseline (appendix 5). Japan produces very little corn, and its animal 

production depends crucially on imported corn. The TPP scenario results in a contraction in Japan’s 

production of bovines, hogs, and poultry, and, consequently, in its feed requirements. In the model, 

most of Japan’s corn imports are used as an intermediate input into the “other foods” commodity, 

a sector that includes production of both animal feeds and corn-based starch and sweeteners, and 

which contracts one-tenth of a percent (appendix 6). The small growth in Japan’s corn import 

demand in the model’s results, despite declining feed demand and lower output of “other foods,” is 

driven by a substitution toward imported corn in the production of “other foods.” 

Removal of all bilateral tariffs and TRQs in the TPP scenario would undo any preferential treatment 

previously accorded through the “noodle bowl” of PTAs in the region. One example is Mexico’s 

loss of preferential treatment for its sales of sugar to the United States. Consequently, the quantity 

of Mexico’s sugar exports to the United States will decline about 15 percent while Canada’s and 

Australia’s sugar exports to the United States will increase by about 189 and 185 percent, respectively (see appendix 7). Rest-of-world sugar exports to the United States will decline about 16 

percent. 

Impacts on Agricultural Trade Between TPP Members and Rest 

of World 

Countries benefit from preferential trade agreements such as the TPP when the mutual elimination 

of import barriers leads to greater economic efficiency in production and consumption. Eliminating 

tariffs allows consumers to switch to lower cost imports and, by creating intraregional trade, leads 

to a reallocation of production within the preferential trade area toward lower cost producers. Both 

lower tariffs and production efficiencies boost consumer buying power in member countries. At 

the same time, tariff preferences can lead to inefficiencies if they divert trade to preferred partners 

and away from even lower cost producers who are outside of the trade agreement. There may be 
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Box 2 – The Canadian Supply-Management Program

Canada’s system of supply management restricts the availability of domestic and imported dairy, 

poultry, and egg products in order to achieve higher returns for Canadian producers and greater 

stability of consumer prices. Production and marketing systems under supply management have 

three main features:

1. Price-support policies based on production costs and return on equity and management,

2. Production limited to domestic demand at the cost-determined price, and

3. Border measures to guard against foreign competition, including tariff-rate quotas (TRQs) 

with prohibitively high over-quota tariffs.

Under Canada’s system of supply management, the quantities of fluid and industrial milk that 

may be produced by each province are limited and allocated only to quota-holding farmers. 

Similar quotas manage domestic production of poultry and eggs. While the quotas can be 

increased and additional quotas can be allocated to accommodate demand growth in the 

domestic market, most new entrants to the supply-managed sectors, along with any producers 

who wish to increase their output, must purchase quotas from willing sellers. A small quantity 

of quotas has resulted in high prices for the quotas and for supply-managed products, which has 

dampened Canadian demand for these products.1

In the TPP scenario in this report, TPP members gain duty-free access to the Canadian market 

for their dairy, poultry, and egg products. Canada’s supply response in these sectors is difficult 

to simulate because many of the over-quota tariffs on its supply-managed commodities contain 

“water in the tariffs” (WIT), meaning that the tariff rates are set so high that they would have 

to be reduced substantially before a marginal increase in imports would result. For instance, for 

2014, the over-quota tariff on fresh or chilled boneless chicken cuts and offals (0207.13.93) is the 

lesser of 249 percent or $6.74 CAD (Canadian dollars), about $6.06 U.S.2 per kilogram (Canada 

Border Services Agency, 2014). By contrast, the unit value of U.S. exports (to all countries) of 

fresh or chilled chicken cuts or offal (boneless or bone-in) was $1.47 U.S. per kilogram in 2013.

To address the presence of WIT in Canada’s over-quota tariffs, the model assigns import tariff 

rates for Canada’s supply-managed commodities for 2014 and 2025 that correspond with estimates in the literature of the tariff rate for each product at which there would be no WIT (see 

table below). 

The model’s simulation of trade liberalization in a TPP results in larger percentage decreases in 

Canada’s production of powdered milk and butter than of other supply-managed products (whey, 

cheese, “other dairy,” poultry, and poultry meat). Relative to the baseline, Canadian production of powdered milk and butter decrease by 13.2 percent and 11.9 percent, respectively, while 

production of Canada’s other supply-managed commodities change in the range of plus 1 and 

1 Dessureault (2013) and Lupescu (2013) provide additional information on supply management in Canada’s 

dairy and poultry sectors, respectively.

2 This conversion is based on the exchange rate of $0.90 U.S. per $1 CAD for February 27, 2014.

—continued
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Box 2 – The Canadian Supply-Management Program—continued

minus 3.8 percent (see appendix 6). These findings are broadly similar to estimates from 

two recent studies of the effects of a modification or elimination of supply management on 

Canada’s dairy and poultry sectors. In a study of the TPP’s possible effects on Canada’s dairy 

sector, Rude and An (2013) find that the discontinuation of supply management coupled with 

a 70-percent cut in the over-quota tariffs on dairy products from the TPP countries would 

lower Canadian production of nonfat dry milk, butter, and cheese by between 3.02 percent 

and 6.59 percent, while raising Canadian production of yogurt and ice cream by 1.40 percent 

and 2.39 percent, respectively. In a study of draft modalities released in 2008 as part of the 

Doha Development Agenda negotiations at the World Trade Organization (WTO), Rafajlovic 

and Cardwell (2013) conclude that an agreement in which Canada’s low-tariff WTO quota 

for imported chicken is raised from 7.5 percent to 10 percent of the previous year’s domestic 

production, the within-quota tariff on imported chicken is eliminated, and the over-quota tariff 

is reduced from 238 percent to 182.5 percent would result in a modest contraction of domestic 

chicken supply of about 1 percent.

Literature used to guide specification of ad valorem equivalents for Canada's tariff-rate quotas 

on supply-managed commodities

Live poultry and poultry meat Dairy products, except whey1

Percent Percent

Canada's MFN tariff in TPP model 32.27 Canada's MFN tariff in TPP model 39.44

Selected estimates from the literature:

Retail price premium for Canadian 

poultry, Cardwell et al. (2013)

49.0 Retail price premium for Canadian fluid milk, 

Cardwell et al. (2013)

34.0

Retail price premium for Canadian 

poultry, alternative scenario, 

Cardwell et al. (2013)

26.0 Retail price premium for Canadian fluid milk, 

alternative scenario, Cardwell et al. (2013)

47.0

Potential nominal rate of 

protection for chicken, Rafajlovic 

and Cardwell (2013)

21.3 Ratio of average cost of fluid milk production, 

farms in Canada in 2011 versus small farms 

in New York State in 2011, using data from 

Canadian Dairy Commission (2012) and 

Knoblauch et al. (2012).

34.4

Ratio of difference between 

Canadian farm price of chicken 

and estimated marginal cost of 

producing chicken to marginal 

cost, using data for 2007 from 

Rafajlovic and Cardwell (2013)

35.2 Ratio of average cost of fluid milk production, 

farms in Province of Ontario in 2012 versus 

large herd farms (900 cows or more) in New 

York State in 2011, using data from Canadian 

Dairy Commission and Dairy Farmers of 

Ontario (2014) and Karszes et al. (2012).

43.8

Price-preserving tariff, highest 

estimate, Huff et al. (2000)

37.3 Difference between over-quota tariff for fluid 

milk and WIT for 2007, as estimated by Zhang 

(2008) using adjusted Canadian wholesale 

price and U.S. wholesale price

38.1

Trade-preserving tariff, highest 

estimate, Huff et al. (2000)

24.9

Notes: MFN refers to most-favored nation; WIT refers to water in tariff; TPP refers to the Trans-Pacific Partnership.

1An MFN tariff of 35.96 percent was assigned to Canada's whey sector, based on an import-weighted average of the 

tariffs applied to whey and whey products.

Source: USDA, Economic Research Service, TPP model. 
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Box 3 –Quality Response in the TPP Rice Market

The Trans-Pacific Partnership (TPP) scenario in this report removes Japan’s high over-quota 

tariff on rice imports from TPP countries. Because Japan’s government directly controls rice 

imports and carefully manages Japanese rice production, it is able to calibrate Japanese rice 

supply so that the market price within Japan is high by world standards. Since Japan’s domestic 

rice prices are high, it might be expected that imports would account for a major share of 

Japan’s rice consumption after tariff elimination in the TPP scenario. However, the rice market 

is strongly differentiated, and about 98 percent of Japan’s rice supply—all of its production and 

about two-thirds of its imports— is classified as japonica rice. Japonica rice has a short, round 

grain, and is stickier than most indica rice. This reflects the preference of Japanese consumers 

for japonica rice; long-grain indica rice is not strongly substitutable for japonica rice in daily 

use. In the model, we capture the effects of these strong consumer preferences in constraining 

Japan’s rice imports by assuming a low import-substitution-elasticity value for rice. 

Japonica rice supply from other TPP countries is limited to the United States and Australia. 

Vietnam, a leading world supplier of rice, produces indica. Current production of japonica rice, 

(which includes japonica and similar japonica-type varieties) in the TPP region is in the table 

below. All rice production in Japan and Australia is japonica. In the United States, all California 

production is japonica, and there is also some japonica production in the Delta region of 

Arkansas, Mississippi, and Louisiana, alongside large indica acreage. To expand rice exports to 

Japan to levels substantially above those estimated in the model, exporters would need to either:

• Add new japonica rice area—not likely because of water and other constraints; 

• Switch area from indica to japonica in the southern United States—not likely because past 

experience with Asian acceptance of japonica-type rice from warmer, more humid areas 

(such as the U.S. South) has been discouraging; 

• Raise yields on existing japonica area—not likely as discussed below; or

• Divert existing japonica production from other uses to consumption in Japan. 

Japonica rice production, average for 2011-13

Country Production, milled basis, 1,000 metric tons

 Japan 7,745

 United States 1,934

 Australia 718

 Total TPP 10,397

Sources: USDA, Foreign Agricultural Service, Production, Supply and Distribution Online Database; USDA, Economic Research Service, Rice Yearbook.

—continued
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additional efficiency losses due to factors including the costs of regulating and complying with the 

complex trade rules and regulations that inevitably accompany preferential treatment. 

A preferential trade agreement is generally considered to be beneficial to its members if, on net, 

more trade is created within the pact than is diverted from trade with nonmembers. However, even 

when net trade-creating, it should be noted that the inefficiencies that result from preferential treatment are a key economic critique of preferential trade agreements as compared with global trade 

liberalization, which (in theory) yields no inefficiencies because it provides for the equal treatment 

of all trade partners.

Box 3 –Quality Response in the TPP Rice Market—continued

In the United States and Australia, water supply is a major constraint to the expansion of rice 

paddy area. Drought sharply reduced Australia’s production and exports in much of the last 

decade. Exports, which exceeded 500,000 tons in each year (1995-2001), dropped as low as 

17,000 tons in 2009, and have not regained the 500,000-ton level since 2001. 

If Japan’s market is opened to other TPP partners, a decline in exporting-country yields is 

more likely than yield growth. Most japonica rice produced in the United States and Australia 

is currently of medium kernel length, called medium-grain rice. However, Asian japonica 

consumers prefer short-grain japonica rice. A switch to short-grain rice could lead to higher 

sales prices for U.S. and Australian growers, but would likely be accompanied by the lower 

yields that typify its production. Productivity per hectare could rise in value terms, but fall in 

quantity terms. Additionally, Japanese consumers have turned increasingly toward foods raised 

according to organic standards. The dry climate of California’s Sacramento Valley makes 

organic production easier than in Japan, but organic production, while more profitable, is likely 

to have lower yields than current conventional japonica production. 

Finally, diverting rice to Japan’s market from other markets for U.S. and Australian rice is 

possible but unlikely to significantly impact Japanese imports. Japan already imports about 35 

percent of exported medium- and short-grain U.S. rice. South Korea and Taiwan have countryspecific quotas that mandate import access for the United States of over 100,000 tons annually—almost entirely filled by medium and short-grain rice. It would be difficult for Japanese 

buyers to bid U.S. rice away from the South Korean and Taiwanese markets. Diversion of U.S. 

japonica rice would come from current U.S. uses or exports to non-Asian countries. If Japan 

purchased all U.S. japonica rice exports not currently bound for East Asia (about 400,000 tons), 

it would increase U.S. exports to Japan by 130-150 percent, or about 5-6 percent of Japan’s 

consumption. More rice could also come from Australia (in years when water supply there 

allows it). The upper ceiling on these shipments is likely to be 350,000 tons—another 4-5 

percent of Japan’s consumption. However, full access to Japan’s market would likely trigger 

significant price increases in the exporting countries, somewhat limiting the appeal of imported 

rice in Japan. Given the current membership of the TPP group, supply constraints thus severely 

limit the degree to which imports could substitute for Japan’s rice production.
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Tariff and TRQ elimination in the TPP scenario results in a net creation of trade in agriculture. The 

expansion of agricultural trade within the region in 2025 of $8.5 billion is estimated to exceed the 

diversion of members’ agricultural imports from the rest of the world of about $2.6 billion and the 

diversion of their exports to the rest of the world of about $438 million (table 12). On the import 

side, trade diversion will be greatest in the “other agriculture” and meat sectors, and is accounted for 

primarily by a shift worth nearly $770 million in Japan’s “other agriculture” imports and an almost 

$900-million shift in its meat imports from nonmembers to TPP sourcing. On the export side, trade 

diversion will similarly be greatest in the meat and “other agriculture” sectors, largely due to a shift 

in exports of these products by Australia, New Zealand, Vietnam, and the United States into the 

TPP market. Some New Zealand dairy exports are also diverted from rest-of-world markets to TPP 

destinations.

It should be noted that in a market like the TPP region, where a large portion of trade is already 

taking place at preferential tariffs due to PTAs, much of the intraregional trade diversion that may 

Table 12

Value of agricultural trade diversion in 2025 due to TPP scenario ($US millions)

AustraliaCanada Chile Japan MalaysiaMexicoNew 

Zealand Peru Singapore

United 

States

Vietnam

Total

Diversion of agricultural imports from the rest of world

Cereals 1.4 0.9 1.5 -238.3 -4.5 0.0 0.4 0.0 3.9 0.3 -5.9 -240.3

Fruits/

vegetables 5.3 1.6 -0.4 -126.0 -1.8 -1.7 2.1 0.0 0.9 7.1 -30.2 -143.2

Oilseeds 

and 

products

8.5 -5.2 0.0 -17.7 1.4 0.6 1.7 -2.1 0.6 0.1 -34.4 -46.5

Meat 2.6 -57.8 0.8 -868.4 2.1 -5.1 0.5 -0.2 7.2 -20.8 -47.5 -986.5

Dairy 4.4 -59.8 0.3 -123.0 1.2 -11.2 1.0 -2.0 7.4 -11.1 -3.8 -196.7

Other 

agriculture 27.7 14.4 0.6 -768.0 -76.3 -4.5 5.9 -2.4 22.5 -128.4 -61.2 -969.7

Total 

agriculture 49.9 -106.0 2.9 -2,141.5 -25.8 6.4 -0.4 35.0 -154.8 -105.1 -183.0 -2,582.9

Diversion of agricultural exports to the rest of world 

Cereals -14.3 -4.3 -0.1 0.0 0.0 0.3 -0.3 0.0 0.0 -34.2 2.9 -49.9

Fruits/

vegetables -7.2 -1.8 -5.3 0.3 -0.1 0.0 -6.5 -0.2 -0.2 -8.6 -5.7 -35.4

Oilseeds 

and 

products

-2.4 -1.7 -0.1 0.1 -27.3 0.0 -0.5 0.0 -0.5 -24.5 -2.2 -59.2

Meat -54.0 12.9 -4.2 0.4 -0.1 0.6 -61.2 0.2 -0.5 -6.9 -0.9 -113.6

Dairy -7.4 0.8 -0.2 0.2 0.7 0.0 -48.2 0.0 -0.4 -0.6 -0.1 -55.2

Other 

agriculture -36.4 -0.8 -4.4 12.8 0.0 0.0 -9.0 -1.7 -3.2 -23.0 -59.4 -125.1

Total 

agriculture -121.6 5.2 -14.3 13.8 -26.9 0.9 -125.7 -1.8 -4.8 -97.9 -65.3 -438.4

Notes: Negative denotes a decline in Trans-Pacific Partnership (TPP) members’ imports from or exports to rest of world; positive denotes an 

increase in imports from or exports to rest of world. Values are in 2007 U.S. dollars.

Source: USDA, Economic Research Service, TPP model.
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have occurred when those PTAs were put into place should unwind as countries within the region 

are gradually repositioned onto a level trading field. Further, because this model does not account for 

reductions in tariffs due to PTAs between TPP members and nonmember countries over 2014-25, the 

model’s results likely represent the upper bound of the potential trade-diversion effects of the TPP.

Impacts on Agricultural Production 

Results of the TPP scenario describe the difference in output quantities in 2025 with the TPP, 

relative to the baseline. This analysis assumes no changes in land supply, domestic farm-subsidy 

programs, or structural or efficiency changes in formerly protected sectors in response to trade 

policy reforms. As a result, the output responses to tariff elimination in the TPP scenario may be 

overstated. With these assumptions, agricultural output quantities in 2025 in the TPP scenario for 

aggregated commodity categories are expected to change between +5.5 and -5.7 percent, relative to 

2025 in the baseline (table 13). More detailed results of the production impacts of the TPP on agricultural commodities are in appendix 6. 

Agricultural output in the United States will increase modestly in 2025 if tariffs and TRQs are 

eliminated, reflecting that its exports to TPP partners represent a relatively small share of total U.S. 

production. The largest growth in U.S. production quantities will be in cereals, dairy products, and 

meats. By commodity, the largest percentage gains in agricultural output in the TPP scenario will 

be in meats in Australia, dairy in New Zealand, and “other agriculture” in Singapore. Expansion 

of Australia’s meat output will be largely due to its increased exports of bovine meat to Japan, the 

United States, and Canada. New Zealand’s agricultural growth will be led by gains in its output 

of dairy and meat products as it increases its exports of these commodities to Japan, Canada, the 

United States, and Mexico. Growth in Singapore’s “other agriculture” will be led by growth in its 

exports of processed food and feed products to Malaysia, Japan, and Vietnam. 

Canada’s agricultural output will increase for most commodities in 2025, relative to the baseline, 

with its largest percentage gain in fruits and vegetables and its largest absolute gains in “other agriculture.” Canada’s dairy sector will experience a 2.5-percent decrease in output quantities in 2025 

in the TPP scenario, assuming the removal of its high tariffs on dairy products imported from TPP 

partners and no compensating changes in dairy-farm programs or industry structure. 

Mexico’s agricultural output is expected to change minimally in the TPP scenario, reflecting that 

most of its trade is with the United States, for which NAFTA already provides duty-free treatment. 

An exception is the 1.6-percent decline in its dairy output, due to the removal of its relatively high 

tariffs on dairy products imported from non-U.S. trade partners. 

Agricultural output in 2025 in the TPP scenario is estimated to decline in most sectors in Japan 

relative to the baseline. Japan’s cereal production quantities, mostly of rice, could decline more 

than 3 percent, largely due to the hypothetical elimination of its tariffs on rice and other cereal 

imports from its TPP partners. Agricultural output in most commodity categories will also decline 

in Vietnam. This result is partly due to the relatively high tariffs that Vietnam imposes on many 

agricultural products, but also reflects a pull of resources into its manufacturing sectors as its export 

demand, particularly for its labor-intensive manufactured products, increases due to the TPP.

It is important to place the effects on agricultural output in 2025 of eliminating tariffs and TRQs 

into the dynamic perspective of the changes expected to occur over the 2014-25 implementation 
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Table 13

Changes in agricultural output in 2025 with tariff and TRQ elimination and total change in output over 

2014-25

Australia Canada Chile JapanMalaysia MexicoNew 

Zealand Peru

SingaporeUnited 

States Vietnam

Value of output in 2025 in baseline, $US millions

Cereals 11,295 10,101 2,773 67,854 1,426 6,550 368 4,283 158 80,861 8,580

Fruits/

vegetables 8,657 4,220 5,643 48,820 721 14,096 4,616 4,058 29 75,265 4,153

Oils and 

fats 4,321 9,661 672 6,876 33,514 3,407 1,753 2,116 307 49,086 516

Meat 47,325 36,512 7,677 59,144 4,524 22,769 13,409 7,757 688 295,378 3,862

Dairy 20,790 15,854 3,106 41,659 1,599 15,233 19,580 3,753 639 139,693 539

Other 

agriculture 68,094 63,374 20,510 421,029 13,102 84,290 12,474 23,944 3,513 590,319 17,292

Total 

agriculture 160,480 139,722 40,381 645,383 54,887 146,345 52,199 45,911 5,334 1,230,601 34,941

Percent change in quantity of output in 2025 due to TTP scenario, relative to baseline 

Cereals 2.2 0.7 0.1 -3.2 -0.6 0.1 1.6 0.1 -0.1 1.0 1.3

Fruits/

vegetables 0.0 2.5 0.2 -0.5 0.0 0.0 0.4 0.1 -4.7 0.3 -0.9

Oils and 

fats -0.3 0.0 0.3 -0.2 0.0 0.0 -0.1 0.0 1.5 0.1 -3.2

Meat 5.3 0.5 0.7 -5.7 0.3 0.1 3.2 0.3 -0.2 0.4 -1.0

Dairy 2.6 -2.5 1.0 -3.8 2.6 -1.6 3.7 -0.1 0.6 0.5 -1.6

Other 

agriculture 0.8 0.4 0.3 -0.2 0.5 0.0 0.5 0.3 5.5 0.0 -0.3

Total percent change in quantity of output over 2014-25, including the TPP scenario effect

Cereals 13.9 13.6 24.8 -6.1 11.4 12.8 16.4 20.4 20.4 11.3 6.8

Fruits/

vegetables 15.4 26.1 21.7 0.1 9.8 11.4 18.8 14.9 -4.9 16.6 16.1

Oils and 

fats 10.4 15.6 39.5 -9.6 7.8 19.7 16.0 29.8 23.9 10.8 26.5

Meat 19.2 9.6 48.9 -12.5 24.1 24.8 16.1 25.6 18.6 8.9 31.5

Dairy 20.2 5.1 27.1 -7.1 33.0 19.8 14.0 19.9 30.9 14.6 39.2

Other 

agriculture 18.1 16.7 34.4 -3.8 23.4 23.8 20.9 30.3 23.1 16.7 37.4

Note: TPP refers to the Trans-Pacific Partnership. Values of output in 2025 are the results of the baseline simulation. All values are in 2007 U.S. 

dollars. Quantity changes for commodity categories are constructed by weighting the quantity changes of the individual commodities in the 

model by their shares in the value of output in 2014 of each aggregated commodity category. 

Source: USDA, Economic Research Service, TPP model. 
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period. The TPP provisions can augment or diminish the changes in agricultural output projected to 

occur under the baseline scenario. In Vietnam, for example, the decline in agricultural output in the 

TPP scenario constitutes a relatively small scale-back when compared to the large growth in agricultural output expected to occur in Vietnam over the 2014-2025 baseline period. The net effect of the 

baseline developments plus the TPP is that agricultural output quantities increase in all countries and 

commodities (with the exception of most agricultural sectors in Japan and fruits and vegetables in 

Singapore) during the 2014-25 period.

Comparison of Results With Other CGE Model-Based Analyses 

of the TPP 

The CGE model-based literature on the effects of the TPP on members’ economies shares a broad 

consensus that the agreement will have relatively small effects on most members’ real GDP or 

welfare. The studies find an annual gain for the United States of between zero and 0.4 percent in real 

GDP (table 14). Four of the six studies reviewed here find that the largest gains in welfare or real 

GDP from tariff elimination will accrue to Vietnam. 

Differences in CGE model structure, assumptions about trade policies, and definitions of scenarios 

contribute to some of the differences in their results. The CGE models used in recent analyses of 

the TPP vary in terms of their dynamic versus static timeframes and in their theoretical structure. 

Cheong (2013) and Itakura and Lee (2012) use recursive dynamic CGE models, which solve sequentially forward to the end date of the TPP implementation period. Their models take into account the 

dynamic changes expected to occur in the region over the coming decade and describe the TPP in 

terms of its effect on the future state of members’ economies. The other four studies reviewed here 

(this study’s TPP model; Kawasaki, 2014; Petri and Plummer, 2012; and Todsadee et al., 2012) use 

static CGE models, which describe the before-and-after differences between an initial equilibrium 

and the economy after a shock, such as the TPP. Our model and Petri and Plummer (2012) solve 

their static models forward to 2025 and 2030, respectively. These two models describe the future 

state of members’ economies with a TPP relative to without a TPP. 

Key differences in CGE model structure that distinguish Petri and Plummer (2012) is their incorporation of the “Melitz” effect, following Zhai (2008) and the role of foreign direct investment (FDI). 

Their Melitz-CGE model recognizes that firms are heterogeneous in their levels of productivity. As 

a result, trade barriers that create fixed costs of entry into the export market, such as plant inspection services, will be surmountable only for the most efficient firms. Trade liberalization leads to 

economic gains because it raises the average productivity of a country’s firms. Trade agreements 

lower trade costs, allowing new firms with lower productivity—but which may be greater than the 

average—to enter the export market and expand output, and causing the contraction or exit of a 

country’s least-productive, nonexporting firms. A Melitz model can also lead to relatively large trade 

effects because firm entry may result in new trade in cases where there was previously zero trade. 

Without Melitz effects, Petri and Plummer’s (2012) estimated impacts of a TPP on national incomes 

would be about 40 percent lower. They also account for growth in FDI as a result of the investment 

provisions of the TPP. The role of investment effects in their findings is significant; in the case of the 

United States, it accounts for one-third of estimated U.S. income gains from the TPP. 

Kawasaki (2014) also accounts for investment growth and assumes that productivity will increase 

with an expansion of trade as firms confront greater price competition from imports. As in Petri and 

Plummer (2012), these assumptions are important drivers of the size of the estimated impacts of a 
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Table 14

CGE-based quantitative analyses of the Trans-Pacific Partnership (TPP)

Authors Type of CGE 

model

Food and 

agriculture 

coverage

Data sources for 

tariffs and nontariff 

barriers (NTBs)

TPP scenario Impact on 

United States

Results

This study Static GTAP 

model, solved with 

macro-projections 

and trade policy 

updates to 2025, 

V8 (2007) GTAP 

database

Comprises 

25 of 29 

sectors

GTAP tariffs; 

tariffs and regional 

preferences updated 

to 2014 and 2025 by 

U.S. Department of 

Agriculture 

Tariff elimination Zero impact on 

U.S. real GDP in 

2025 compared 

with baseline

Changes in real 2025 

GDP compared with 

baseline range from 

zero for the U.S. and 

other countries to 0.1 

percent for Vietnam

Cheong 

(2013)

Recursive 

dynamic GTAP 

solved over 

2013-27 baseline, 

V8 (2007) GTAP 

database

Not specified GTAP tariffs and 

updated regional 

trade preferences to 

2027 

Tariff elimination Less than 

0.01-percent 

increase in 2027 

GDP compared 

with baseline

Changes in 2027 

GDP compared with 

baseline range from 

-0.13 percent for Chile 

to 0.97 percent for 

New Zealand

Kawasaki 

(2014)

Static GTAP CGE 

model with capital 

accumulation 

and endogenous 

productivity 

growth, V8 (2007) 

GTAP database 

updated to 2010

Comprises 

12 of 29 

sectors

GTAP tariffs, 

estimates of 

NTBs from World 

Bank Trade 

Restrictiveness Index

Tariff elimination 

and 50 percent 

reduction 

in NTBs on 

preferred 

partners and 

25 percent NTB 

reduction on rest 

of world

Up to 1.3-percent 

increase in 

welfare as 

percent of real 

GDP

Changes in welfare 

as percent of real 

GDP range from 9.9 

percent in Vietnam 

to 0.1 percent in U.S. 

and Canada with tariff 

removal; with tariff and 

NTB removal, ranges 

between 20.6 percent 

for Malaysia and 1.3 

percent for U.S. 

Itakura and 

Lee (2012)

Recursive 

dynamic GTAP, 

solved over 2004-

30, V7 (2004) 

GTAP database

Comprises 8 

of 29 sectors 

in model

GTAP tariffs, 

estimates of NTBs 

in services from the 

literature

Tariff elimination 

and 25 percent 

reduction in 

NTBs, includes 

TPP plus an East 

Asian and an 

Asia-Pacific trade 

area 

0.8-percent 

increase in 

2030 welfare 

compared with 

baseline

Changes in 2030 

welfare compared with 

baseline range from 

0.8 percent for the 

U.S. to 5.6 percent for 

Vietnam.

Petri and 

Plummer 

(2012)

Static CGE model 

with Melitz firm 

heterogeneity, 

and with foreign 

direct investment 

flows, solved 

sequentially 

over 2010-30, 

preliminary GTAP 

V8 (2007) GTAP 

database.

Comprises 4 

of 18 sectors 

in model

GTAP tariffs, 

qualitative 

assessments of 

previous preferential 

trade agreements 

to construct stylized 

tariff-reduction paths 

and utilization rates. 

NTBs on goods are 

iceberg transport 

costs based on Kee 

et al. (2009). 

Partial removal of 

tariffs and NTBs, 

endogenous 

changes in 

foreign direct 

investment (TPP 

includes South 

Korea) 

0.38-percentincrease in 2030 

GDP compared 

with baseline

Changes in 2025 

GDP compared with 

baseline range from 

0.38 percent for the 

U.S. to 13.57 percent 

for Vietnam. 

Todsadee 

et al. (2012)

Static GTAP, V7 

(2004) GTAP 

database

Comprises 7 

of 15 sectors 

in the model

GTAP tariffs Tariff elimination Less than 

0.01-percent 

increase in 2027 

GDP compared 

with baseline

Change in GDP range 

from -0.03 percent for 

Peru to 0.81 percent 

for Vietnam.

Note: CGE refers to the computable general equilibrium model; GDP refers to gross domestic product; GTAP refers to the Global Trade Analysis 

Project. Tariff elimination includes removal of tariff-rate quotas. 

Source: USDA, Economic Research Service. 
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TPP on national income. Kawasaki (2014) concludes that investment and productivity growth will 

account for over 80 percent of the income gains from a TPP. 

The CGE-based literature on the TPP features a striking reliance on the GTAP database, which 

describes countries’ supply, demand, trade flows, bilateral tariff rates (inclusive of preferences), and 

the ad valorem equivalents of TRQs. One of the studies uses the GTAP version 7 database, which 

depicts the world economy and trade policies in 2004; all others use different editions of the version 

8 database, which describes the world economy and trade policies in 2007. Five of the six studies 

update the GTAP trade policy data to incorporate tariff preferences entering into effect after 2007, 

or augment it to include nontariff barriers (NTBs). This study relied on USDA experts to review and 

update the GTAP v8 tariff rates from 2007-14 and 2025 and to develop a database on the implementation of tariff preferences in existing PTAs over 2007-25 for agricultural commodities. Tariff rates 

used in this analysis are generally lower than those reported in the GTAP database, and this contributes to its finding of relatively low GDP impacts. Petri and Plummer (2012) augment the GTAP 

tariff database with estimates of the ad valorem equivalents of NTBs by Kee et al. (2009), which are 

estimated on a most-favored nation (MFN) rather than bilateral basis, and are generally very high 

relative to tariff rates. 

Analyses differed in their assumptions about the degree of liberalization and in the participants 

included in a TPP scenario. Models with TPP scenarios that only account for removal of tariffs 

and TRQs find modest annual changes in real GDP that, by country, range between -0.13 and 0.97 

percent relative to a baseline value. Itakura and Lee (2012) and Kawasaki (2014) include both tariff/

TRQ elimination and a partial reduction of NTBs in their TPP scenario. Petri and Plummer (2012) 

assume only partial tariff and TRQ removal, but include a reduction in NTBs. The latter three 

studies yield larger welfare or GDP effects than analyses that describe only tariff and TRQ reforms. 
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Conclusion 

The ambition of the TPP initiative is to achieve a full liberalization of trade and investment flows 

among the member countries in a manner that addresses both traditional market-access issues 

in goods and services and more complex, “21st century” impediments to trade, such as nontariff 

barriers and regulatory inconsistencies. This report provides a quantitative assessment of the potential effects of a hypothetical and stylized TPP agreement in which all agricultural and nonagricultural tariffs and TRQs governing trade among the member countries are removed in their entirety. 

Trade barriers between TPP countries and other countries remain unchanged in this analysis. The 

scope of the TPP negotiations goes well beyond tariffs and TRQs; they also cover other areas that 

could impact agriculture, including investment, trade in services, technical barriers to trade, and 

sanitary and phytosanitary barriers. This analysis does not account for the gains that might be 

achieved in these other areas of the negotiations. 

There is significant scope for agricultural trade expansion in the TPP region if intraregional tariffs 

and TRQs are eliminated, despite the fact that TPP countries have already liberalized a significant 

proportion of trade with many of their TPP partners through a web of preferential trade agreements. 

This study finds that full tariff and TRQ elimination between TPP partners will cause the value of 

intraregional agricultural trade in 2025—the assumed end date of the pact’s implementation—to be 

6 percent, or about $8.5 billion (in 2007 U.S. dollars) higher than under the baseline scenario. While 

each member country will experience growth in both its agricultural imports and exports, Japan 

and the United States will account for the largest shares of the increases in intraregional imports 

and exports, respectively. The United States will supply about 33 percent of the expansion in intraregional agricultural exports—the value of U.S. agricultural exports to TPP partners in 2025 is estimated to be 5 percent ($2.8 billion) higher under the TPP scenario than in the baseline. Japan will 

account for almost 70 percent of the expansion in intraregional agricultural imports—the value of 

Japan’s agricultural imports from its TPP partners in 2025 is expected to be about 14 percent ($5.8 

billion) higher than in the baseline. 

By commodity, the percentage increase in the value of intraregional trade due to the elimination 

of tariffs and TRQs will be largest for rice, sugar, and “other meat” (which includes animal fats 

and oils and offals); in absolute value terms, the increase will be greatest for bovine meat (which 

includes beef and mutton), “other foods” (which includes processed foods and feeds), and poultry 

meat. The total increased trade in meats of about $3.7 billion will account for 43 percent of the 

expansion in the value of intra-TPP trade in 2025, most of which is supplied by Australia, the United 

States, Canada, and New Zealand. About three-quarters of the increase in meat exports is destined 

for Japan, whose meat imports (mostly bovine and poultry meats) from TPP members will increase 

by about $2.8 billion relative to the baseline. 

The increase in intra-TPP agricultural trade is mostly the result of new trade, rather than the 

diversion of trade from the rest of the world. As countries within the TPP region gradually begin 

competing on a level playing field, much of the trade diversion that may have resulted from the PTAs 

currently in place between TPP members should begin to unwind.

The results of this study are presented with several caveats, the most important being the stylized 

depiction of a hypothetical TPP scenario that analyzes only an elimination of tariffs and TRQs. 

While the analysis accounts for the fact that many bilateral tariffs within the region are scheduled 

to be reduced or eliminated under previously negotiated preferential trade agreements between 
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TPP members, it does not account for any negotiated tariff reductions between the TPP countries 

with trade partners in the rest of the world. The study also does not account for possible insulating 

domestic farm-policy responses or market responses (such as structural or efficiency changes 

in industries that lose their trade protections) or for the productivity gains that may result from 

increased trade opportunities. Finally, with the exception of restrictions on meat trade related to 

livestock foot-and-mouth disease, this analysis does not specifically examine nontariff barriers to 

trade that are also a subject of the TPP negotiations, and whose removal could have potentially large 

impacts on the trade flows among the TPP countries. 
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Appendix 1 – The Trans-Pacific Partnership Model 

This analysis utilizes the GTAP computable general equilibrium (CGE) model developed by Hertel 

and others (Hertel, 1997). The Trans-Pacific Partnership (TPP) model’s 29 commodities are mostly 

in the agricultural and food sectors, with nonagricultural sectors aggregated into labor-intensive 

manufacturing, capital-intensive manufacturing, and services. The 12 countries or regions in the 

model include TPP members (excluding Brunei) and an aggregated rest-of-world region. The four 

primary factors of production are skilled and unskilled labor, capital, and land. 

In the model, producers are described as perfectly competitive cost-minimizers, with technology 

defined as a nested production function. Producers’ demand for intermediate inputs responds to 

prices for inputs and outputs, subject to a Leontief intermediates production function. A constantelasticity of substitution (CES) production function over value added allows producers to substitute 

among primary factors as their relative prices change. Consumer demand is described by a Constant 

Difference of Elasticity (CDE) demand system, a non-homogeneous function that allows income 

growth to affect consumer preferences. Cobb-Douglas functions describe government and investment demand, which imply constant budget shares in total expenditure. Import demand is described 

by nested Armington functions, in which demand is first allocated between the domestic good and 

the composite import, and then among national sourcing of the composite import. Countries (or 

regions) are linked through their bilateral trade flows, which explicitly account for transportation 

and marketing costs in moving goods from port to port. Factors are assumed to be fixed in national 

supply, fully employed, and mobile across sectors (except for land, which is assumed to have limited 

substitutability across crops). Each region’s balance of trade is assumed to remain a fixed share 

of its gross domestic product (GDP), with cross-country differences in expected rates of return to 

investment. 

The base year of the global GTAP v8.1 database used in this analysis is 2007. The study updates 

the base year’s representation of the global economy from 2007 to 2014 using actual economic data 

for 2007-2012 and projections for 2012-2014. The baseline scenario describes projected changes 

in the global economy over the period 2014-25 in the absence of a TPP agreement. Actual and 

projected economic data are used for real GDP, population, capital stock, and skilled and unskilled 

labor. Projections for real GDP and population are from the International Macroeconomic Data 

Set of USDA’s Economic Research Service (ERS). Factor-endowment growth rates are projections 

from Chappuis and Walmsley (2011). Both databases build upon and report projections developed 

by other organizations, including the International Monetary Fund, IHS Global Insight, Oxford 

Economic Forecasting, and the Centre d’Etudes Prospectives et d’Informations Internationales 

(CEPII). 

For both the update and the baseline projection, we change the GTAP model closure, exogenizing 

countries’ real GDP and solving for endogenous total input productivity. In the TPP scenario, we 

assume the productivity growth described in the baseline scenario and solve for an endogenous real 

GDP. 

The base year update and the baseline scenario incorporate changes in bilateral tariffs among TPP 

members due to liberalization commitments made under existing preferential trade agreements. We 

do not account for the implementation of preferences between TPP members and their nonmember 

trade partners. In addition, Mexico unilaterally reduced or eliminated its most-favored-nation 
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(MFN) tariffs on selected agricultural commodities during the 2007-14 and 2014-25 periods. These 

unilateral tariff changes are included in the base update and baseline scenarios. 

The only nontariff trade barrier included in the model is the restriction on livestock foot-and-mouth 

disease (FMD) in intra-TPP trade. FMD-free countries are the United States, Australia, Canada, 

Chile, Mexico, Japan, and New Zealand, based on their disease-free status in 2012. Non-FMD-free 

countries may export to each other, but not to FMD-free countries. To represent import restrictions related to FMD, we fix the bovine meat and pork exports from FMD countries to FMD-free 

countries at their base year (2007) quantities and allow the model to solve for compensating levels 

of endogenous bilateral export taxes. Exports of bovine meat and pork from FMD countries to 

FMD-free countries in 2007 were generally low but not zero. This reflects the fact that some 

FMD-free countries allow the importation of certain beef and pork products from FMD countries, 

or from disease-free regions within FMD countries, under certain conditions.

The CGE model’s calibration procedure for the CDE demand system solves for income and compensated own- and cross-price elasticities that are sufficiently close to the income and price-elasticity 

values supplied by the modeler while meeting the constraint that income elasticities that are less than 

one (inferior goods) or greater than one (luxury goods) remain so after calibration (Liu et al., 1999; 

Hertel et al., 2008). Income and own-price elasticities of demand in the TPP model are drawn from 

multiple sources, including Hertel et al. (2008), Muhammad et al. (2011), the Food and Agricultural 

Policy Research Institute (FAPRI), and country studies. Income elasticity parameters in the model 

are adjusted so that the baseline scenario simulates the dietary trends over the 2014-25 time period 

as projected by various sources, including ERS baseline projections, the USDA Foreign Agriculture 

Service’s Global Agricultural Information Network (GAIN) reports, the Food and Agriculture 

Organization, and Msangi and Rosegrant (2011). 

We carry out a sensitivity analysis of our model results in the TPP scenario with respect to the 

assumed parameter values for import-demand elasticities, a key behavioral parameter for a trade 

policy experiment. Our sensitivity analysis describes the mean and standard deviation in results over 

a range of plus and minus 50 percent of the assumed parameter values. Figures A1.1 and A1.2 report 

the model results for the percent change in value of each of the TPP members’ global agricultural 

exports and imports, and the upper and lower limits of a 95-percent confidence interval around 

these country results. For TPP members in aggregate, there is 95-percent confidence that the TPP 

scenario will result in an increase in total value of their global agricultural exports in 2025 of $8.1 

billion, plus or minus $2.0 billion. There is 95-percent confidence that the TPP scenario will result 

in an increase in total value of members’ global agricultural imports in 2025 of $6.1 billion, plus or 

minus $1.5 billion.
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Note: This graph shows a 95% confidence range for the percentage change in value of members' 2025 global agricultural 

exports, compared to the baseline, with a 50% variation in the import substitution elasticity (ESUBD).

Source: USDA, Economic Research Service, Trans-Pacific Partnership model. 

Figure A1.1

Export confidence ranges

Percentage change 

0.00

2.00

4.00

6.00

8.00

10.00

12.00

Upper limit

Model result

Lower limit

+

Australia

Canada

Chile

Malaysia

Mexico

New Zealand

Peru

Singapore

United States

Vietnam

Japan

+

+

+

+

+

+

+

+ + +

+

Note: This graph shows a 95% confidence range for the percentage change in value of members' 2025 global agricultural 

imports, compared to the baseline, with a 50% variation in the import substitution elasticity (ESUBD).

Source: USDA, Economic Research Service, Trans-Pacific Partnership model.

Figure A1.2

Import confidence ranges

Percentage change 

Upper limit

Model result

Lower limit

+

+

+

+

+

+

+ +

+

+

+

+

0.00

1.00

2.00

3.00

4.00

5.00

6.00

Australia

Canada

Chile

Malaysia

Mexico

New Zealand

Peru

Singapore

United States

Vietnam

Japan
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Appendix 2 – Countries and Sectors in the TPP Model

Table A2.1

Countries in the TPP Model

Country/region Global Trade Analysis Project country code

1 Australia aus 

2 Canada can 

3 Chile chl 

4 Japan jpn 

5 Malaysia mys 

6 Mexico mex 

7 New Zealand nzl 

8 Peru per 

9 Singapore sgp 

10 United States usa 

11 Vietnam vnm 

12 Rest of world col cri gtm hnd nic pan slv xca xcb aut bel cyp cze dnk est fin fra deu 

grc hun irl ita lva ltu lux mlt nld pol prt svk svn esp swe gbr bgr rou twn 

phl tha idn chn hkg ind khm lao xse bra kor xoc mng xea bgd npl pak 

lka xsa xna arg bol ecu pry ury ven xsm che nor xef alb blr hrv rus ukr 

xee xer kaz kgz xsu arm aze geo bhr irn isr kwt omn qat sau tur are xws 

egy mar tun xnf cmr civ gha nga sen xwf xcf xac eth ken mdg mwi mus 

moz tza uga zmb zwe xec bwa nam zaf xsc xtw 

Note: TPP refers to the Trans-Pacific Partnership.

Source: Country identification of each country code is available in the Global Trade Analysis Project (2014) database.
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Table A2.2

Sectors and aggregations in TPP model

Sector 

in TPP 

Model Name Description

GTAP sector code 

for the TPP sector

Aggregation of sectors 

in discussion of private 

consumption results 

from TPP model

Aggregation of sectors 

in discussion of output 

and trade results from 

TPP model

1 Rice Rice pdr pcr Cereals Cereals

2 Wheat Wheat wht Cereals Cereals

3 Corn Corn gro Cereals Cereals

4 Other grains Other grains gro Cereals Cereals

5 Fruits/ 

vegetables

Fruits and vegetables v_f Fruits/ vegetables Fruits/ vegetables

6 Oilseeds Oilseeds osd Oils and fats Oilseeds

7 Sugar cane/

beet

Sugar cane and sugar beet c_b Other foods Other agriculture

8 Fibers Plant-based fibers pfb Nonfoods Other agriculture

9 Other crops Other crops, not elsewhere 

classified.

ocr Other foods Other agriculture

10 Bovines Bovine animals ctl Meat Meat

11 Pigs Hogs oap wol Meat Meat

12 Poultry Poultry and eggs oap wol Meat Meat

13 Other animals Other animals and products oap wol Nonfoods Other agriculture

14 Resources Fishery, forestry, mining, 

extraction

frs fsh coa oil gas 

omn 

Nonfoods Manufacturing

15 Bovine meat Bovine meats and products cmt Meat Meat

16 Pork Pork and pork products omt Meat Meat

17 Poultry meat Poultry meats and products omt Meat Meat

18 Other meat Other meat products omt Meat Meat

19 Sugar Raw and refined sugar sgr Other foods Other agriculture

20 Oils and fats Vegetable oils and fats vol Oils and fats Oilseeds

21 Whey Whey rmk mil Dairy Dairy

22 Powdered milk Nonfat and whole milk powders rmk mil Dairy Dairy

23 Butter Butter, fats, oils and substitutes rmk mil Dairy Dairy

24 Cheese Cheese rmk mil Dairy Dairy

25 Other dairy Fluid milk and products rmk mil Dairy Dairy

26 Other foods Other food, feed, and beverage 

products

ofd b_t Other foods Other agriculture

27 Labor-int. mfg Labor-intensive manufacturing tex wap lea lum fmp 

mvh otn ele ome omf 

Nonfoods Manufacturing

28 Capital-int. 

mfg.

Capital-intensive manufacturing ppp p_c crp nmm 

i_s nfm 

Nonfoods Manufacturing

29 Services Services ely gdt wtr cns trd 

otp wtp atp cmn ofi 

isr obs ros osg dwe 

Services Services

Note: TPP refers to the Trans-Pacific Partnership; GTAP refers to the Global Trade Analysis Project. Sugar cane and beets are raw materials 

used in the production of sugar; trade in cane and beet is negligible.

Source: USDA, Economic Research Service, TPP model.
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Appendix 3 – Splitting GTAP Agricultural Sectors

We disaggregate four of the Global Trade Analysis Project (GTAP)-defined sectors into 13 subsectors using the SplitCom utility developed by Horridge (2008). SplitCom is a matrix-balancing 

program that allows the user to subdivide the rows and columns of a sector from a balanced social 

accounting matrix (SAM). The user provides data to disaggregate a GTAP sector’s input demands, 

uses in intermediate and final demand and trade, and tax and tariff payments. SplitCom then uses 

methods similar to minimum entropy to balance the disaggregated SAM and to satisfy accounting 

identities. The utility manipulates only the disaggregated sectors, which can be re-aggregated to 

restore the original values in the GTAP SAM.

We use SplitCom to disaggregate 4 GTAP sectors—grains, animals, meat, and dairy—into 13 

subsectors (see table A3.1). Data for the disaggregation are drawn from multiple sources. Trade and 

tariff data are disaggregated using TASTE (Tariff Analytical and Simulation Tool for Economists), 

software developed by Horridge and Laborde (2010) and based on the Market Access Maps 

(MAcMap) HS-6 trade and tariff database (Guimbard et al., 2012). We use TASTE v. October 

2012, which is compatible with the GTAP v8.1 2007 database. TASTE reports the trade and tariffs 

at the HS-6 level within each GTAP sector. These disaggregated data are then summed into the 13 

new subsectors defined in the TPP model, using the HS2002 concordance developed by Hutcheson 

(2006). Tariffs are aggregated into model sectors using regional trade weights, which help to overcome the problem of a country’s small trade flows in the presence of high trade barriers.

Data for the disaggregation of subsectors’ inputs and demands for their output are from multiple 

sources, including FAOSTAT; USDA’s Production, Supply and Distribution Online Database; 

USDA’s Global Agricultural Information Network (GAIN) reports; and national statistics.

Table A3.1

Splits of GTAP Sectors in TPP model

No.

Split sectors in 

TPP model Description GTAP sector 

1 Corn Corn Cereal grains nec (gro)

2 Othrgrn Other coarse grains Cereal grains nec (gro)

3 Hogs Hogs Other animal products (oap), wool (wol) 

4 Poultry Poultry and eggs Other animal products (oap), wool (wol) 

5 Othanml Other animals and products Other animal products (oap), wool (wol) 

6 Pork Pork and pork products Meat products nec (omt)

7 Pltrymt Poultry meats and products Meat products nec (omt)

8 Othmeat Other meat products Meat products nec (omt)

9 Whey Whey Raw milk (rmk) dairy products (mil) 

10 PM Nonfat and whole milk powders Raw milk (rmk) dairy products (mil) 

11 Butter Butter, fats, oils and substitutes Raw milk (rmk) dairy products (mil) 

12 Cheese Cheese Raw milk (rmk) dairy products (mil) 

13 OthDairy Fluid milk and products Raw milk (rmk) dairy products (mil) 

Note: TPP refers to the Trans-Pacific Partnership; GTAP refers to the Global Trade Analysis Project. 

Source: USDA, Economic Research Service, TPP model.
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Appendix 4 – Changes in Private Household Consumption 

Quantities in 2025 With the TPP, Compared With 2025 in 

Baseline

Table A4.1

Percent change in private household per capita consumption quantities over 2014-25

Commodity

AustraliaCanada Chile JapanMalaysia Mexico

New 

Zealand PeruSingaporeUnited 

States

Vietnam 

Rice -0.3 4.4 15.9 -0.3 -0.8 2.2 -0.5 16.2 -0.3 -0.4 -0.9

Wheat -0.4 -0.4 -0.8 -0.3 -0.7 -0.7 -0.5 1.9 -0.4 -0.4 -1.0

Corn -0.4 -0.4 1.2 -0.3 -0.7 -0.7 -0.5 2.0 -0.4 -0.4 -1.0

Other grains -0.4 -0.4 -0.8 -0.3 -0.7 -0.8 -0.5 -1.0 -0.4 -0.4 -1.0

Fruits/vegetables 3.8 5.7 4.8 4.4 4.5 2.5 3.3 3.3 1.5 4.9 5.3

Oilseeds 1.4 0.2 4.0 0.4 3.2 1.6 2.6 1.8 1.2 0.2 4.6

Sugar cane/beet 1.4 0.1 3.9 0.4 1.6 0.0 2.8 2.0 -0.8 0.0 4.1

Fibers 3.7 6.2 9.5 3.1 7.1 6.4 6.0 7.7 3.8 5.2 12.1

Other crops 4.5 6.1 13.1 0.3 11.5 8.8 8.7 11.0 3.9 1.5 18.1

Bovines 2.0 -5.6 13.4 4.2 15.8 2.1 -0.6 10.9 1.2 -3.2 26.6

Pigs 2.4 0.4 14.4 0.3 11.3 11.6 3.5 13.8 2.3 4.2 19.6

Poultry 3.1 1.3 16.9 0.3 11.5 17.0 3.9 13.5 1.1 14.7 19.6

Other animals 2.3 0.2 2.3 0.3 1.9 6.3 3.3 0.5 2.1 0.2 3.3

Resources 9.0 11.5 18.3 0.4 28.8 13.2 11.0 16.8 5.6 10.3 35.4

Bovine meat 3.9 -5.6 9.9 4.1 18.1 2.3 -1.0 10.8 3.2 -3.4 29.1

Pork 4.2 0.1 15.3 0.3 12.9 11.8 6.0 13.4 3.8 3.7 20.5

Poultry meat 4.5 0.9 15.2 0.3 13.0 17.2 5.7 13.4 4.2 14.6 20.1

Other meat 5.1 0.1 3.7 0.5 3.0 2.1 2.2 3.4 1.2 0.2 4.6

Sugar 7.0 0.4 14.0 0.3 10.0 0.6 8.3 15.9 3.8 0.1 23.5

Oils and fats 3.3 0.3 10.3 0.4 11.9 7.2 3.1 12.6 2.7 -0.2 22.6

Whey 1.5 0.2 10.3 0.3 11.9 6.7 2.3 8.7 1.1 -0.2 17.8

Powdered milk 2.7 2.5 13.1 0.2 10.2 29.1 -10.1 11.3 2.2 -0.2 23.3

Butter 1.5 0.4 10.6 0.2 9.8 3.2 -8.2 9.1 0.9 4.8 13.3

Cheese 2.0 2.7 10.3 5.1 13.0 26.1 5.4 3.9 14.8 6.1 14.8

Other dairy 1.7 -4.2 10.5 0.2 10.8 4.6 9.7 9.0 1.9 -2.9 18.8

Other food 6.9 8.7 20.7 0.2 18.7 13.9 9.2 20.0 7.2 7.6 38.6

Labor-int. mfg 18.4 22.7 39.7 15.7 38.2 30.3 24.4 42.5 16.8 19.7 57.8

Capital-int. mfg. 19.0 23.0 43.0 15.3 36.5 31.3 25.3 47.5 17.8 20.3 61.9

Services 19.5 24.3 49.3 16.5 42.1 35.8 27.5 51.7 18.6 20.6 76.2

Note: TPP refers to the Trans-Pacific Partnership; mfg. stands for manufacturing. 

Source: USDA, Economic Research Service, TPP model.
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Appendix 5 – Effects of Tariff and Quota Elimination in a 

TPP on Global Trade of TPP Members

Table A5.1

Percent change in quantity of global exports in 2025 with tariff and tariff-rate quota elimination in a TPP, 

compared with 2025 in the baseline 

Commodity

AustraliaCanada Chile JapanMalaysia Mexico

New 

Zealand PeruSingaporeUnited 

States

Vietnam

Rice 40.5 0.4 -1.9 1.1 -1.2 0.0 -0.3 -2.5 -5.0 33.2 4.3

Wheat -2.2 -0.5 -3.6 2.9 -2.5 2.2 -3.8 -3.1 -11.0 2.7 13.0

Corn 160.7 13.2 -0.2 5.0 0.0 0.4 -3.0 -2.0 -7.4 0.2 -4.5

Other grains 16.9 6.7 -0.4 0.5 0.2 0.1 -0.9 -2.5 -3.6 -5.8 -2.9

Fruits/vegetables -0.3 3.1 0.3 1.8 0.0 0.1 -0.2 0.7 -4.0 1.8 -1.8

Oilseeds -2.7 -0.2 0.0 1.3 -0.4 0.8 -1.8 0.0 -6.5 -0.3 -2.5

Sugar cane/beet -2.6 0.0 -0.4 1.4 0.0 0.7 -2.4 0.2 -8.5 0.2 -3.6

Fibers -3.0 0.2 -0.1 4.0 0.1 0.3 -2.2 0.1 -2.3 -0.2 -0.9

Other crops -2.5 -0.3 -0.9 3.6 -0.2 0.6 -0.1 0.4 6.6 0.1 -3.2

Bovines 0.4 0.3 -0.1 4.7 1.7 0.6 3.3 -0.3 -4.1 -1.4 -2.7

Pigs -0.5 0.2 -0.4 0.4 0.0 -0.6 -1.6 -0.4 -2.1 0.0 -0.4

Poultry -1.7 0.1 -0.6 1.1 0.1 -0.1 -1.1 -0.2 -2.2 1.6 -0.4

Other animals -1.5 0.1 -0.4 1.8 0.2 0.3 -1.5 3.4 1.0 0.1 0.4

Resources -0.1 0.0 0.0 -0.1 -0.3 0.1 -0.8 0.1 0.1 0.0 -2.0

Bovine meat 19.0 3.1 7.7 18.9 -1.4 15.5 7.4 2.5 -0.5 3.9 7.9

Pork -1.4 2.3 1.3 3.9 0.6 3.0 -2.3 13.4 -0.6 1.9 -2.3

Poultry meat 17.5 45.9 -6.0 12.2 3.9 2.0 0.7 1.3 0.7 12.2 3.3

Other meat 6.1 66.9 34.7 4.9 0.9 54.0 5.2 4.7 2.5 34.4 5.9

Sugar 22.6 110.4 -2.3 10.6 0.7 -14.5 8.4 161.7 -15.0 -0.3 3.9

Oils and fats -1.3 1.4 2.2 6.9 0.0 0.0 -0.2 0.2 1.4 0.7 -3.0

Whey 2.2 25.5 1.1 3.7 1.4 0.2 3.2 0.3 4.0 5.2 -0.4

Powdered milk 17.3 13.1 3.8 5.8 4.0 7.3 4.3 0.5 2.4 8.0 0.0

Butter 13.9 21.6 2.0 3.8 4.5 0.5 5.0 -0.4 14.9 39.1 -0.4

Cheese 4.1 18.6 34.9 3.9 2.4 0.8 8.2 3.6 1.4 16.2 0.6

Other dairy 26.9 17.9 5.3 4.1 5.4 14.7 6.8 0.2 3.5 32.5 0.0

Other foods 1.9 0.4 0.4 4.0 3.8 0.2 1.6 0.2 8.4 1.1 2.7

Labor-int. mfg 0.1 0.0 0.0 1.3 0.5 0.1 -0.8 0.4 -0.2 0.1 6.1

Capital-int. mfg. -0.2 0.1 -0.1 0.7 0.6 0.2 -0.6 0.2 1.1 0.2 0.1

Services -0.3 0.1 -0.1 -0.4 -0.3 0.2 -1.9 0.3 -0.3 0.1 -3.3

Note: TPP refers to the Trans-Pacific Partnership; mfg. stands for manufacturing. 

Source: USDA, Economic Research Service, TPP model.
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Table A5.2

Percent change in quantity of global imports in 2025 with tariff and tariff-rate quota elimination in a TPP, 

compared with 2025 in the baseline 

Commodity

AustraliaCanada Chile JapanMalaysia Mexico

New 

Zealand PeruSingaporeUnited 

States

Vietnam

Rice 0.9 0.9 0.2 110.7 2.8 -0.1 0.6 0.0 3.0 0.1 1.6

Wheat 2.1 0.0 0.5 14.2 0.5 -0.1 2.0 0.2 1.3 0.3 0.4

Corn 2.6 0.1 0.3 0.4 0.2 -0.3 3.9 0.1 0.5 0.2 0.5

Other grains 1.8 0.2 0.3 -1.2 0.2 -0.2 2.3 0.1 -0.2 0.2 -0.1

Fruits/vegetables 0.9 0.1 1.0 3.8 0.1 -0.1 1.1 0.5 0.0 0.1 4.6

Oilseeds 1.6 0.1 0.2 -0.5 0.1 0.0 0.5 0.3 0.0 0.3 0.6

Sugar cane/beet 3.1 7.0 0.4 -0.5 0.2 -0.3 2.5 0.8 5.1 0.3 1.9

Fibers 1.6 2.4 -0.1 0.3 0.2 -0.2 0.5 0.1 -0.1 0.1 1.1

Other crops 1.9 3.8 0.3 -1.1 0.5 -0.1 0.9 0.1 3.0 0.2 1.2

Bovines 2.3 -0.1 0.5 -0.1 -0.1 2.1 1.8 0.1 0.5 0.4 1.1

Pigs 1.0 0.5 0.3 -0.6 0.0 -0.1 0.7 0.0 0.1 0.1 -0.1

Poultry 1.1 17.2 0.1 -0.1 -0.1 -0.1 0.8 0.4 0.1 0.1 -0.8

Other animals 0.6 1.9 0.3 0.3 0.1 0.0 0.5 1.2 -0.1 0.2 -1.0

Resources -0.6 0.0 0.0 0.1 0.1 0.0 -0.3 0.0 0.9 0.0 2.7

Bovine meat 1.8 10.5 0.0 31.0 0.0 0.7 1.5 -0.1 0.0 4.8 1.0

Pork 1.2 0.5 0.4 2.5 0.0 -0.2 1.1 1.0 1.1 0.3 11.0

Poultry meat 2.7 33.7 0.5 2.4 -0.1 7.7 3.8 0.8 1.2 2.2 13.7

Other meat 3.1 1.9 0.3 2.2 15.7 -0.1 3.1 1.3 0.3 0.4 -1.5

Sugar 1.4 0.6 0.5 9.1 0.0 6.2 0.9 0.0 1.5 21.8 2.6

Oils and fats 1.0 1.5 0.2 0.3 0.2 0.0 0.6 0.2 1.6 0.3 0.8

Whey 0.8 24.1 0.4 3.2 -0.4 1.4 0.2 2.0 1.6 11.6 5.9

Powdered milk 0.0 23.7 0.8 40.8 -0.8 24.2 1.9 8.8 1.5 6.6 1.6

Butter -0.2 28.3 0.1 52.0 -0.3 12.4 1.3 12.0 1.5 11.6 0.6

Cheese 0.3 24.8 1.0 5.0 -0.2 11.6 1.3 2.2 1.4 8.1 4.5

Other dairy 1.0 24.8 0.8 19.6 0.1 2.9 3.4 -0.2 2.0 2.6 1.5

Other food 0.3 0.0 0.3 0.3 3.1 0.0 0.8 1.3 0.7 0.2 5.7

Labor-int. mfg 0.9 0.1 0.2 0.5 0.3 0.1 1.5 0.8 0.0 0.2 2.9

Capital-int. mfg. 0.1 0.0 0.1 0.6 1.0 0.0 0.7 0.5 0.4 0.1 2.1

Services 0.2 0.0 0.1 0.5 0.2 -0.1 1.3 -0.2 0.2 0.0 2.4

Note: TPP refers to the Trans-Pacific Partnership; mfg. stands for manufacturing. 

Source: USDA, Economic Research Service, TPP model.
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Appendix 6 – Effects of Tariff and Quota Elimination in a 

TPP on Output Quantities

Table A6.1

Percent change in output quantity with tariff and tariff-rate quota elimination in a TPP, compared with 

2025 in the baseline 

Commodity

AustraliaCanada Chile JapanMalaysia Mexico

New 

Zealand PeruSingaporeUnited 

States

Vietnam

Rice 7.0 0.1 0.1 -2.6 -0.6 0.0 0.0 0.1 0.0 8.7 1.4

Wheat 0.8 -0.5 0.2 -32.3 -1.8 0.9 1.8 0.1 0.3 2.1 4.4

Corn 3.6 0.9 -0.1 -13.6 0.1 0.1 1.0 0.2 -3.0 0.3 0.2

Other grains 3.1 3.0 0.0 -7.6 0.2 0.0 1.9 0.0 0.1 -1.5 -1.5

Fruits/vegetables 0.0 2.5 0.2 -0.5 0.0 0.0 0.4 0.1 -4.7 0.3 -0.9

Oilseeds -0.2 -0.1 0.1 0.0 -0.1 0.3 -1.5 0.1 -3.0 0.0 -3.1

Sugar cane/beet 1.7 0.9 0.2 -2.4 0.4 -0.6 0.2 1.7 -1.2 -2.2 -0.1

Fibers -0.5 0.0 -0.1 2.9 0.1 0.1 -0.7 0.2 -2.2 -0.1 3.4

Other crops 0.2 -0.3 -0.8 -1.1 -0.3 0.0 0.0 0.1 2.8 0.0 -3.0

Bovines 6.7 0.0 0.7 -10.7 0.4 0.5 3.3 0.1 -2.4 0.2 0.0

Pigs 0.4 0.4 1.0 -1.0 0.2 0.3 1.0 0.2 -2.3 0.1 -0.2

Poultry 0.7 -1.0 -1.5 -0.8 0.3 -0.7 0.6 0.1 -2.4 0.6 -0.8

Other animals -0.2 0.6 12.5 1.0 0.2 3.5 -0.5 1.2 0.9 0.6 0.2

Resources -0.1 0.0 -0.1 -0.1 -0.2 0.1 -0.5 0.0 0.5 0.0 -1.0

Bovine meat 7.3 -0.2 0.8 -14.8 0.1 1.0 4.1 0.1 0.2 0.1 -1.5

Pork -0.2 1.7 0.9 -1.4 0.1 0.6 0.0 0.3 0.0 0.2 -4.1

Poultry meat 0.7 0.9 -2.3 -1.6 0.6 -1.6 0.0 0.1 -0.2 0.9 -11.8

Other meat 5.0 9.6 25.6 -0.8 -0.5 9.1 1.5 4.2 1.5 5.3 4.4

Sugar 8.9 15.9 0.1 -2.4 0.7 -1.1 0.2 2.8 -7.4 -2.4 -0.1

Oils and fats -0.4 0.2 0.3 -0.3 0.0 0.0 -0.1 0.0 1.5 0.2 -3.2

Whey 0.6 -0.2 0.2 -3.7 0.9 -0.7 3.2 -0.1 -2.2 0.3 -10.4

Powdered milk 5.7 -13.2 0.9 -13.2 2.1 -8.4 3.3 -1.8 0.8 0.5 -1.8

Butter 4.9 -11.9 0.3 -35.2 2.9 -2.2 4.5 -0.2 0.5 1.1 -0.6

Cheese 1.0 -3.8 6.6 -3.5 1.5 -1.8 6.2 -3.8 0.4 0.1 -4.0

Other dairy 1.9 -1.8 0.5 -2.6 2.9 -0.4 3.2 0.0 0.7 0.7 -0.7

Other foods 0.3 0.1 0.2 -0.1 0.6 0.0 0.7 0.0 5.9 0.1 0.4

Labor-int. mfg -1.1 -0.1 -0.2 0.3 0.3 0.0 -1.3 -0.2 -0.2 -0.1 4.1

Capital-int. mfg. -0.2 0.0 -0.1 0.0 -0.2 0.1 -0.5 0.0 0.9 0.0 -2.3

Services 0.0 0.0 0.0 0.0 -0.1 0.0 -0.1 0.0 -0.1 0.0 -0.4

Note: TPP refers to the Trans-Pacific Partnership; mfg. stands for manufacturing. 

Source: USDA, Economic Research Service, TPP model.
55

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Appendix 7 – Effects of Tariff and Quota Elimination in a 

TPP on U.S. Bilateral Trade Quantities

Table A7.1

Percent change in quantity of U.S. exports in 2025 with tariff and tariff-rate quota elimination in a TPP, 

compared with 2025 in the baseline 

Commodity

AustraliaCanada Chile JapanMalaysia Mexico

New 

Zealand PeruSingaporeVietnamRest 

world

Rice 0.8 0.8 0.1 208.5 34.6 -0.1 0.7 -0.1 3.1 19.8 0.0

Wheat 1.9 -0.2 -0.2 25.9 1.0 -0.1 3.3 -0.6 1.5 3.9 -0.3

Corn 2.7 0.1 0.0 1.9 -0.2 -0.3 3.7 -0.1 0.2 14.1 -0.3

Other grains 1.8 0.2 0.0 -11.5 0.2 -0.3 2.8 -0.1 -0.4 5.3 -0.2

Fruits/ vegetables 1.4 0.0 -0.7 12.8 3.4 -2.9 1.5 -0.7 0.0 73.5 -0.3

Oilseeds 1.3 0.0 -0.3 -0.5 -0.1 -0.1 1.3 -0.2 -0.3 13.1 -0.3

Sugar cane/beet 2.5 6.4 -0.2 -1.1 -0.4 -0.8 2.1 0.3 4.9 1.3 -0.7

Fibers 1.3 2.4 -0.2 0.6 0.1 -0.2 0.1 0.0 -0.3 0.9 -0.3

Other crops 1.8 3.4 -1.0 -0.6 14.5 -1.2 1.6 -0.5 2.5 78.7 -0.6

Bovine animals 3.5 -0.2 -0.2 -6.9 1.8 -3.8 3.5 -0.2 1.9 0.7 -0.1

Pigs 0.8 0.4 -0.6 1.9 0.0 -0.1 1.0 0.0 0.0 -0.3 -0.2

Poultry 1.0 21.9 0.0 5.1 0.7 -0.1 1.0 -0.4 0.0 -0.4 -0.2

Other animals 1.1 2.1 0.3 5.0 1.2 -0.2 0.8 -1.5 -0.1 -1.3 0.0

Resources 0.5 0.0 -0.1 0.4 1.0 0.0 0.0 -0.2 1.1 4.3 0.0

Bovine meat 5.7 -10.3 0.8 35.1 1.3 -3.2 4.8 -0.2 1.8 73.6 0.1

Pork 1.4 0.5 0.4 3.1 16.2 -0.2 8.7 -1.2 1.7 127.4 -0.1

Poultry meat -0.5 44.6 0.3 22.4 0.0 -16.9 6.8 -0.9 1.1 52.1 -0.2

Other meat 4.0 1.9 -0.1 81.4 30.8 -0.5 74.8 -1.3 0.3 32.6 -0.1

Sugar 3.9 2.7 3.0 -20.9 2.9 -2.3 4.4 2.4 4.5 40.1 2.5

Oils and fats 0.8 1.7 -0.3 4.1 2.3 -0.2 1.0 -0.8 1.7 44.7 -0.3

Whey 1.1 35.3 0.3 8.0 0.0 -1.2 11.2 -0.6 1.9 46.8 0.0

Powdered milk 1.6 52.8 0.2 179.0 0.7 -12.1 15.8 -4.2 2.4 58.1 0.1

Butter 1.5 56.9 0.3 299.4 2.1 -3.8 2.1 -1.6 2.7 30.6 0.1

Cheese 1.3 78.6 0.9 34.5 3.0 -3.3 2.2 -6.8 2.5 43.0 0.0

Other dairy 1.8 83.9 0.7 126.5 1.4 -0.7 12.6 -0.1 2.3 8.9 -0.1

Other foods 0.4 -0.2 0.1 3.9 28.5 -0.1 5.2 -0.8 0.7 24.9 0.0

Labor-int. mfg -1.5 -0.3 -0.4 1.1 2.3 -0.2 3.8 -0.8 0.0 35.5 0.0

Capital-int. mfg. -0.1 -0.1 -0.1 2.5 9.9 0.0 4.5 -0.5 0.5 8.1 0.0

Services 0.2 0.0 0.1 0.5 0.3 -0.1 1.3 -0.2 0.2 2.4 0.0

Note: TPP refers to the Trans-Pacific Partnership; mfg. stands for manufacturing. 

Source: USDA, Economic Research Service, TPP model.
56

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Table A7.2

Percent change in quantity of U.S. imports in 2025 with tariff and tariff-rate quota elimination in a TPP, 

compared with 2025 in the baseline 

Commodity

AustraliaCanada Chile JapanMalaysia Mexico

New 

Zealand PeruSingaporeVietnamRest 

world

Rice -0.3 0.5 -0.3 6.2 7.7 0.0 5.8 -0.1 -0.2 3.7 0.0

Wheat -0.3 0.3 -0.3 1.6 1.1 0.7 -3.2 0.3 -8.7 15.0 0.6

Corn -2.6 0.4 -0.1 2.6 3.3 0.8 -1.8 0.4 -7.5 -2.0 0.6

Other grains -1.1 0.2 -0.1 1.2 1.6 0.4 -0.9 0.1 -3.2 -0.8 0.3

Fruits/ vegetables -1.9 0.1 -0.3 16.6 4.1 0.3 -0.4 0.1 -5.5 -2.0 0.2

Oilseeds -2.5 0.3 0.3 1.5 0.0 0.6 -1.5 0.2 -5.8 -2.3 0.5

Sugar cane/beet -3.1 0.0 -0.5 1.3 -0.1 0.5 -2.5 0.1 -8.6 -3.6 0.4

Fibers -3.2 0.1 -0.2 14.4 -0.1 0.2 -2.4 0.0 -2.5 -1.2 0.1

Other crops -2.9 0.0 -0.8 5.0 4.6 0.5 4.4 0.0 -5.0 -3.0 0.3

Bovine animals -2.0 0.3 -0.3 5.7 1.1 0.6 2.2 0.2 -5.8 -1.8 0.4

Pigs 0.0 0.1 -0.1 1.2 0.0 0.1 -0.3 0.0 -1.9 0.0 0.1

Poultry -0.8 0.1 -0.2 1.3 2.1 0.3 -1.0 0.0 -1.9 -0.4 0.2

Other animals -1.5 0.1 -0.4 4.6 3.7 0.4 0.0 0.0 0.2 4.4 0.2

Resources -0.2 0.0 -0.1 -0.1 -0.1 0.1 -0.3 0.2 -0.2 -2.7 0.0

Bovine meat 11.5 -2.5 -4.3 29.9 0.0 -2.2 8.6 -3.3 0.0 0.0 0.0

Pork -3.1 0.5 -1.2 3.6 0.0 0.1 -1.4 -0.4 0.0 0.0 0.0

Poultry meat -3.9 10.9 -3.0 17.5 10.7 -1.9 2.1 -2.3 -3.0 95.1 -2.2

Other meat -3.4 3.5 -1.2 15.0 43.1 0.2 4.3 -0.1 -1.6 612.3 -0.3

Sugar 185.3 188.7 -15.9 208.4 186.8 -15.4 182.7 187.9 -15.9 177.3 -15.5

Oils and fats -2.2 1.0 -0.1 1.5 -0.3 -0.2 5.7 0.1 0.0 -4.8 0.0

Whey 23.5 61.3 7.8 84.4 -0.8 -1.7 27.1 -1.8 28.4 -2.4 -1.7

Powdered milk 11.1 24.9 4.9 49.0 -0.5 -1.1 17.0 -1.4 18.8 -2.0 -1.3

Butter 15.0 33.5 6.5 50.1 -0.9 -1.8 26.6 -1.9 24.8 -3.3 -1.8

Cheese 18.3 31.9 5.8 58.9 0.1 -0.6 27.6 14.3 11.2 -2.0 -0.8

Other dairy 7.6 24.1 7.4 50.3 1.0 0.2 8.1 0.1 11.4 -0.7 0.1

Other food 0.8 0.0 0.0 7.9 3.4 0.0 4.6 0.0 2.6 2.1 -0.1

Labor-int. mfg -0.1 -0.1 -0.2 1.6 1.0 -0.1 1.0 0.0 -0.4 18.2 -0.2

Capital-int. mfg. -0.3 0.0 -0.1 2.9 5.0 0.0 1.8 0.1 -0.1 3.8 -0.1

Services -0.3 0.0 -0.2 -0.7 -0.5 0.2 -2.1 0.3 -0.5 -3.5 0.0

Note: TPP refers to the Trans-Pacific Partnership; mfg. stands for manufacturing. 

Source: USDA, Economic Research Service, TPP model.