The Pacific Rim – defined as the western shores of the Americas, eastern Asia and the islands of the Pacific – could significantly boost the value of local agricultural trade if a preferential trade agreement (PTA) is reached, according to a recent report by the United States Department for Agriculture (USDA).
The 12 countries, which include the US and Australia, have been negotiating an agreement in various forms for the past 30 years.
The USDA predicts that Pacific Rim countries could tap an extra $8.5 billion in trade if a PTA came to fruition. Although there are numerous intra-regional trade agreements in existence, they do not eliminate the intra-regional trade barriers or quotas from one country to another.
According to the USDA’s model, with a PTA in place between all Pacific Rim nations, trade expansion would emanate from Japan and the US predominantly; a 70 percent and 33 percent increase in trade from these two countries by 2025 respectively.
The Pacific Rim accounts for 42 percent of the US’ global agricultural exports and 47 percent of its agricultural imports, so the country would be the greatest beneficiary of a PTA.
It has no agricultural trade agreement with five of the Rim countries including Vietnam and Japan.
China and Australia are currently in the process of negotiating a Free Trade Agreement.
Credit: United States Department of Agriculture