In an effort to educate the American public about the pending Trans-Pacific Partnership (TPP) trade agreement that the U.S. is negotiating with 11 Asia-Pacific nations, the Office of the U.S. Trade Representative (USTR) published a report outlining the tariff barriers to be addressed as part of TPP.
The USTR’s “Leveling the Playing Field” report released last week noted that American businesses face “disproportionately high” tariff barriers in the Asia-Pacific region—largely where textile goods are sourced—and the Obama Administration is working to lower that with the in-talks TPP.
TPP, according to U.S. Trade Representative Michael Froman, will support domestic jobs by breaking down barriers to Made-in-America exports.
“We already have an open economy, but not all countries do. TPP will help level the playing field so that our products and services aren’t frozen out of the fastest growing markets in the world,” he said.
The U.S. economy is one of the world’s most open—nearly 70 percent of the products we import don’t face any tariffs at all, and foreign companies face an average applied tariff of just 1.4% on exports to the U.S., according to USTR.
The average world tariff is over twice that high.
In some countries, like Vietnam and Malaysia, the average tariff is more than three times that 1.4%.
“American manufactured goods face tariffs of up to 100 percent on certain goods in TPP markets, and American agriculture exports face tariffs over 700 percent on some products,” the report noted. “Many countries use non-tariff barriers to discriminate against American products and encourage development without concern for the environment or the rights of workers.”
According to the report, the U.S. ships nearly $2 billion in goods to TPP countries every day, and last year, exports of manufactured products to TPP countries totaled more than $638 billion.
Today’s tariffs on textiles in TPP markets range up to 100 percent, and the U.S. exported $21.9 billion in textiles and apparel to the world in 2014, almost half of which was to TPP countries.
Footwear facew quotas and tariffs upwards of 100 percent, and with nearly 45 percent of the U.S. footwear exports to the world destined for TPP nations, opening new markets for footwear exports could considerably change the market.
Consumer goods face TPP market tariffs as high as 75 percent, but USTR said TPP could benefit these product exports by streamlining and speeding up border crossings.
U.S. exports of cotton to TPP nations face tariffs as high as 10 percent.
“In TPP, we are seeking elimination of tariffs and commercially-meaningful market access for U.S. products exported to TPP countries, and are seeking commitments that address longstanding unwarranted non-tariff barriers,” the report noted.