United States Department of Agriculture

A report summary from the Economic Research Service

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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
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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.