The Trans-Pacific Partnership and Tea

Obviously, I am no macroeconomist, nor do i purport to prognosticate the exact outcome of the Trans-Pacific Partnership talks, but the TPP’s birth will have a clear impact on the tea industry, and thus on this blog.

Today the PRC put out feelers that they may be interested in being a future TPP partner. Although it seemed initially as if the TPP was designed to put pressure on China to conform to international standards of labour, environmentalism and cease currency manipulation (among others), it was obvious from the get-go that excluding the world’s fastest growing economy and biggest labour force was just foolish. Now it’s looking more and more as if there might be two or more phases of TPP roll-outs, with the countries that are currently sitting at the negotiating table (Brunei, Chile, New Zealand, Singapore, US, Australia, Peru, Vietnam, Malaysia, Mexico, Canada and Japan) being given the first seats, and nations that have shown serious interest in membership (Philippines, Taiwan, South Korea), being added when possible. Other countries that have demonstrated interest in the TPP include Laos, Cambodia, Colombia, Thailand, Indonesia, Cambodia, Bangladesh, India and China. This last set of interested partners probably holds the most challenges at meeting the rigorous international standards, but of course the specifics are classified.

Potential TPP partner nations
Potential TPP partner nations

What’s striking about the above list to my mind is that fact that nearly all the major tea growing regions lie in countries that have signed-on or demonstrated interest in the TPP (India, China, Japan, Taiwan, Korea, Indonesia, Singapore, Vietnam, and Hawaii). The current exceptions being Sri Lanka, Nepal and some African and South American nations. In that regard, the TPP’s passage would obviously herald a sea-change in world tea prices (for which I cry in happiness), labour practices/income inequality and environmental practices. There are hundreds of major tea producers in the world today that don’t practice fair trade. As a consumer, I know I will rest easier at night knowing I’m no-longer supporting a barbaric labour system or consuming tea i can’t be sure is as organic as it might claim (though that one’s basically moot, because i CAN tell).

So then in light of these benefits, obviously the question becomes, where would the TPP end up hurting the tea industry? China has always hand-plucked tea, which admittedly yields better results than “plucks” sheered using large agro equipment. If hand-plucking will require Chinese factories to pay their workers a real wage and benefits, the chances of this millennia old practice remaining intact feel poor at best. Additionally, many teas are baked using charcoal firing, and those teas might cease to exist in the current form if charcoal firing is outlawed or heavily taxed. Obviously, those are both dependent on China becoming a TPP member though, so probably a ways off yet.

It’s sad to note that of the nations absent from this list, among them is Nepal, which would obviously be a partner that would have a great deal to gain economically as it struggles to rebuild itself. Nepal is home to some of the world’s most amazing tea (or at least it was), and for them to be excluded from such a lucrative trade deal means Nepalese teas will only get rarer and more expensive. The same can be said for Sri Lanka, though it feels extremely unlikely we’ll lose access to Ceylon tea (one of the oldest, most industrialized and most prolific tea producing regions).

Interestingly, the major tea player that might be hurt the most is Germany. Germany is home to vendors such as TeaGschwendner who import select teas and export ultra-refined teas to franchises and resellers such as Ann Arbor’s own TeaHaus.  If the TPP is born looking the way it does on the books, German tea companies will be left in the lurch, paying the most on import AND export tariffs. I would seriously hate to see them go, but I’m sure they’ve considered this and might end up moving operations to a TPP partner nation.

As yet there remain too many unknowns to expect any of these predictions to necessarily come to pass. I’m not saying i necessarily endorse all the TPP proposals, either. Frankly though I’d probably be overjoyed if it comes to pass that I get to spend less than $1K/year on this hobby.

 

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