They won’t be the biggest interest group at the table, but U.S. peanut growers are salivating at the prospects of new markets and consumers as the U.S. and 11 Pacific Rim nations weigh the fate of the massive Trans-Pacific Partnership free trade deal.
Just ask Richard Rentz.
An award-winning peanut farmer from Branchville, South Carolina, Mr. Rentz grows an average of about 400 tons a year of runner and Virginia peanuts, which typically end up in the in-shell market and in jars of peanut butter.
“We have such an awesome ability to produce a quality peanut product that we have overrun the domestic market — resulting in prices paid to the farmer well below his cost of production,” Mr. Rentz said.
In a nutshell, America’s peanut growers are big fans of the TPP. They hope to introduce millions of Vietnamese, Malaysian and Japanese consumers to the joys of chunky peanut butter and fluffernutters. But they represent just one test case for the trade deal, which supporters say will lower tariffs and trade barriers on thousands of goods from shoes to Chevrolets, enhance the booming trade in services such as banking and law, and set rules of the road on environmental and labor practices that, backers contend, will serve as a model for more trade agreements.
The traditional Thanksgiving feast also will be well-represented in the TPP. According to Obama administration officials, the trade deal will expand export markets for American poultry producers, potato, corn and vegetable farmers, winemakers and apple growers.
But President Obama, who made another pitch for the trade deal at last week’s Asia-Pacific Economic Cooperation summit in Manila, Philippines, faces a difficult ratification battle at home. Many pro-trade Republicans in Congress have yet to endorse the TPP, labor unions are mobilizing against it and many of the 2016 presidential candidates — including Republican front-runner Donald Trump and Democratic front-runner Hillary Rodham Clinton — strongly oppose the agreement.
America’s peanut producers are just one interest group among thousands with a stake in the TPP, but they say they are hoping for big returns from the trade-expanding deal, especially with Japan.
“Anything we in the U.S. could do to find more consistent and loyal customers would be a boon for growers,” Mr. Rentz said.
The U.S. peanut industry exported $708 million worth of peanuts worldwide last year, $319 million to countries that are part of the TPP. Under the agreement, tariffs on peanuts will be phased out or, in some cases, dropped to zero immediately, opening the doors to other markets and giving the U.S. a competitive edge over China.
Right now, Japan imposes tariffs as high as 23.8 percent on prepared and preserved peanuts, but these tariffs would be eliminated in eight years under the TPP. The Japanese tariff of 12 percent on U.S. peanut butter would be reduced to zero in six years.
Vietnam’s tariffs ranging up to 30 percent on U.S. peanuts and peanut products would be eliminated within eight years.
The peanut industry contributes over $4 billion annually to American gross domestic product, and the U.S. exports 200,000 to 250,000 metric tons of peanuts yearly. Canada, Mexico, Europe and Japan account for more than 80 percent of American peanut exports.
“For the U.S. peanut farmers, the TPP means improved access to important markets such as Japan and developing markets such as Vietnam,” said Don Koehler, executive director of the Georgia Peanut Commission.
China, Argentina and India are the top competitors with the U.S. for peanut exports in the TPP region, especially for Japan’s market. Last year, Japan imported 26 million in peanuts and peanut products from the U.S.
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