USDA Gives Trade Updates on USMCA, China, Japan

As farmers and agriculture business leaders from around the country gathered in Washington D.C. this week to celebrate National Ag Day, clearly trade was a concern. Dozens of farmers spent time on The Hill urging their congressional representatives to support the passage of USMCA and to press for trade progress with China.

Trade was front and center as four panelists spoke at the annual celebration hosted in the National Press Club. Isabella Chism of American Farm Bureau moderated.

USDA Undersecretary for Trade and Foreign Agricultural Affairs Ted McKinney kicked off the panel by reminding the audience of his rural roots saying, "4-H and FFA were a big part of my life." He notes his twin brother who farms keeps him in touch with farmers' perspective.

Turning his attention to trade around the globe, McKinney says, "First of all, at the very, very most fundamental building block, all we seek is free, fair, and reciprocal trade."

His role in tackling that goal is to be a "happy warrior", McKinney explains. "A warrior because I'm taking it very seriously, but happy because we're agriculture."

McKinney listed his priorities as USMCA, China, and Japan, then notes, "We've got to diversify our portfolio. That's why more of my trips than not are to countries that may not be the major markets."

Soybeans

Hanna Abou-El-Seoud took her turn at the mic to say, "Soybeans are the largest U.S. agricultural export. We export about 60% of the soybeans that we grow in the U.S." Abou-El-Seoud works as the Government Affairs Representative on behalf of American Soybean Association.

She pointed out farmers' money and time has been spent building a soybean market in China for the last 40 years. The organization's "primary concern is finding ways to maintain and reopen our market to China."

The American Soybean Association's second goal, and second largest market opportunity is USMCA, or the new NAFTA. "We are actively pushing on Congress to ensure that USMCA gets passed as soon as possible."

Pork

Pork is the poster child for why free trade agreements have worked in the past, says Maria Zieba Director of International Affairs at the National Pork Producers Council.

"We went from a net importer of pork in this country, pre-NAFTA to now being a net exporter of pork of over six and a half billion dollars worth of pork. That totals to about 25% of our production," Zieba says.

Pork is listed on three retaliatitory tariff lists, with the most problematic being Mexico where pork faces about a 20% duty. For farmers, "this means about about $12 an animal," Zieba explains. That equates to a $1.5 billion loss for the industry.

This situation has persisted for more than eight months. "We're not sure how much longer we can go on," Zieba says.

Two retaliation lists are causing issues for U.S. pork in China. She continued, "They love to buy those pork products that we don't really have another outlet for."

Currently the largest export market in terms of value, negotiation a free trade agreement with Japan is also a high priority for the National Pork Producers. Competing pork producing countries already have agreements with Japan, Zieba says. The longer the U.S. waits to put a free trade agreement in place, the less market share U.S. producers are likely to get.

USMCA

David Salmonsen sees a lot of farmers from around the country in his office at American Farm Bureau this time of year. Lately, their number one question for the Senior Director of Congressional Relations is, "when is all of this going to be over?" They want to know when USMCA will be finished.

"That's a process question," Salmonsen responds. "First, the signing in November. Now, there's required reports that have to be done hopefully by the middle of April. Those are reports about the economic impact. And then the administration sends up what are called implementing legislation. That's what is different in a trade agreement. No member of Congress can just put out a bill like any other issue. No, it's got to come from the administration, and they have to work with the leadership, the house and senate side, to decide the best time to send it up so it can go through the process. Because once you send it off, it is a timed process. It has to go through and ultimately get a vote. So, you don't just send it up until you're sure it's going to be treated well."

Dairy

A dairy farmer from Wisconsin asked the panel to address his sector of the industry. McKinney quickly responded by acknowledging the current struggles of the U.S. dairy industry.

"We have to be honest with ourselves," he adds. " A lot of it is fewer farmers, same or more cows, and so in some ways it is a problem brought upon ourselves because you folks are so good at what you do."

The Undersecretary reminded the audience of a program for dairy included in the 2018 farm bill designed to help farmers once it is implemented.

"In terms of trade, there's not a single discussion we have where we don't bring in dairy," McKinney continues. "Not withstanding how much I love and respect our Canadian friends, what they were doing with class seven milk was absolutely, unequivocally not free, fair, and reciprocal. If you have a managed milk supply dairy system, manage it please. Managing it does not include taking the most profitable products and using those domestically and dumping dry milk powder and butter on the world market."

He mentioned efforts to increase dairy exports to India, specifically.