The Potential for Lower Spending on Food Thanks to TPP

Chart of note
This U.S. Grains Council’s Chart of Note shows the value of trade to consumers where they feel it most directly: household expenditures on food.

This U.S. Grains Council’s Chart of Note shows the value of trade to consumers where they feel it most directly: household expenditures on food.

Trade enhances food security, food quality and consumer choice. For instance, the ongoing Trans-Pacific Partnership (TPP) talks are aiming to create a high-standard and comprehensive agreement eliminating both tariff and non-tariff barriers on goods, services and agricultural products. This agreement would account for 40 percent of global trade, which occurs in 12 countries, and increase market access to more than 800 million people. Indirectly, this would benefit those who live and work in TPP countries on a daily basis by reducing overall food costs.

An example of this potential impact is food spending in Japan, the top market for U.S. corn. There, 13.8 percent of household expenditures are devoted to food consumed at home, double Americans’ levels of spending. A successful Trans-Pacific Partnership (TPP) would bring open trade and agricultural reform to the country, which could lower consumer food costs.

If a successful TPP agreement reduces Japan’s income spent on food from 13.8 percent to 11 percent (the level similar to that of South Korea and Germany), Japanese consumers would reduce their food costs by $72 billion a year, according to an article in the Wall Street Journal.  

The Council works actively in trade policy to encourage the development and appropriate implementation of trade agreements that benefit both our members and our valued customers. The Council will continue to work in industry coalition efforts and is in regular communication with U.S. negotiators to ensure that agricultural export perspectives are prioritized.