Tag Archives: Trade

An amendment included in the farm bill allows the Department of Agriculture to use funds for Cuba-related trade activities. The Amendment by Senator Heidi Heitkamp of North Dakota permits the use of Market Access Program and Foreign Market Development funds for Cuba.

The amendment, according to the U.S. Agriculture Coalition for Cuba, represents not only the opportunity to increase the competitiveness of U.S. agriculture, but the first legislation passed regarding Cuba in 17 years. USACC Chair Paul Johnson called the inclusion a “step in the right direction towards normalizing trade with Cuba.

Heitkamp introduced the amendment in June with Senator, John Boozman of Arkansas, both members of the Senate Agriculture Committee. Heitkamp said at the time the legislation would “support farm families and rural communities, especially as they face uncertainty.” The amendment allows funding to go toward trade servicing, technical assistance, and trade promotion activities in Cuba.

WASHINGTON – The U.S. Department of Agriculture (USDA) will sponsor seven trade missions in 2019 to expand export opportunities for U.S. agriculture across the globe, Under Secretary for Trade and Foreign Agricultural Affairs Ted McKinney announced today.

“Agricultural trade missions offer phenomenal opportunities for U.S. exporters to explore new markets and forge relationships with potential customers,” McKinney said. “The marketing and trade experts from USDA’s Foreign Agricultural Service carefully select markets – both developing and established – that offer the best prospects for sales of U.S. farm and food products. We’ve got seven such markets, on five continents, lined up for 2019.

“During and after the numerous USDA trade missions I’ve led, the feedback from participants has been overwhelmingly positive. But most importantly, the results speak for themselves. In 2018, six USDA missions enabled more than 200 U.S. companies and organizations to engage in 3,000 one-on-one meetings with foreign buyers, generating more than $140 million in projected 12-month sales,” McKinney said.

While final dates are subject to confirmation, planned USDA trade missions for 2019 are:

  • Taiwan (Taipei), March 11-14
  • Canada (Montreal and Toronto), April 2-5
  • Colombia (Bogota), June 3-6 (to include buyers from Panama)
  • Vietnam (Ho Chi Minh City), October 14-17 (to include buyers from Burma (Myanmar) and Thailand)
  • Kenya (Nairobi), October 28-31 (to include buyers from Burundi, Djibouti, Ethiopia, Rwanda, Sudan, Tanzania and Uganda)
  • Mexico (Mexico City), November 5-8
  • United Kingdom (London)
     

Keep up to date on plans for USDA’s 2019 trade missions by visiting https://www.fas.usda.gov/topics/trade-missions. You can also subscribe to email updates by going tohttps://public.govdelivery.com/accounts/usdafas/subscriber/new, entering your contact information, and under “Information by Topic” selecting “Trade Missions.”

WASHINGTON (AP) — The Trump administration is celebrating the 90-day truce it reached in its trade war with China as a significant breakthrough despite scant details, a hazy timetable and widespread skepticism that Beijing will yield to U.S. demands anytime soon.

“This is just an enormous, enormous event,” Larry Kudlow, President Donald Trump’s top economic adviser, said Monday of the cease-fire that Trump and President Xi Jingping reached over the weekend on the sidelines of an international economic summit in Buenos Aires, Argentina. “This one covers so much ground in some detail, we’ve never seen this before.”

Yet many economists raised doubts that very much could be achieved within three months.

“The actual amount of concrete progress made at this meeting appears to have been quite limited,” Alec Phillips and other economists at Goldman Sachs wrote in a research note.

During the talks in Buenos Aires, Trump agreed to delay a scheduled escalation in U.S. tariffs on many Chinese goods, from 10% to 25%, that had been set to take effect Jan. 1. Instead, the two sides are to negotiate over U.S. complaints about China’s trade practices, notably that it has used predatory tactics to try to achieve supremacy in technology. These practices, according to the administration and outside analysts, include stealing intellectual property and forcing companies to turn over technology to gain access to China’s market.

In return for the postponement in the higher U.S. tariffs, China agreed to step up its purchases of U.S. farm, energy and industrial goods, the White House said.

Most economists noted that the two countries remain far apart on the biggest areas of disagreement, which include Beijing’s subsidies for strategic Chinese industries, in addition to forced technology transfers and intellectual property theft.

“Ninety days is very little time to fix these perennial issues,” said Bill Adams, senior economist at PNC.

Complicating the challenge, Trump’s complaints strike at the heart of the Communist Party’s state-led economic model and its plans to elevate China to political and cultural leadership by creating global champions in robotics and other fields.

“It’s impossible for China to cancel its industry policies or major industry and technology development plans,” said economist Cui Fan of the University of International Business and Economics in Beijing.

At the same time, analysts said they were relieved that the Trump-Xi meeting at least pressed the “pause” button on tariff hikes. Besides escalating existing tariffs, Trump had threatened to impose import taxes on the remaining $267 billion of U.S. goods from China. This would have raised prices in the United States on many consumer items, including smartphones, clothes and toys.

Fears of a hotter trade war had sent financial markets tumbling in October and November. But they jumped Monday in response to Saturday’s truce. The Dow Jones industrial average closed up 288 points, a gain of 1.1%.

Megan Greene, chief economist at Manulife, said the market’s recent decline had likely contributed to Trump’s willingness to reach a truce.

“We are no longer in the same buoyant economic or markets environment that we enjoyed earlier this year when threats of tariffs against China were first made,” she said.

In the meantime, the outlines of the agreement remain hazy and in some cases confusing. Trump tweeted late Sunday that China had agreed to “reduce and remove” its 40% tariff on cars imported from the U.S. Treasury Secretary Steven Mnuchin said Monday that there was a “specific agreement” on the auto tariffs.

Yet Kudlow said later that there was no “specific agreement” regarding auto trade, though he added, “We expect those tariffs to go to zero.”

Shares of U.S. and overseas auto companies rose on the announcement, though it’s unclear how much companies like GM or Ford will actually benefit. Nearly all the cars they sell in China are made there.

Details regarding China’s pledge to buy more American products — one that it has made before — remain scant. Mnuchin said Monday morning on CNBC that China had offered to buy up to $1.2 trillion of additional U.S. goods, even while the “details of that still need to be negotiated.”

But Kudlow said the ultimate amount will depend on market prices and the health of China’s economy.

“I would think of that as a broad goal,” he said.

State-run Chinese media has described the agreement very differently from how the Trump administration has. It has made no mention of any changes to its auto tariffs. And it has said nothing about a 90-day deadline for the talks.

Greene said this might simply reflect China’s communications strategy. Or it might illustrate China’s weak commitment to the deal.

China agreed to eliminate the retaliatory tariffs it had placed on U.S. soybeans, according to the White House, which also said Beijing had agreed to buy an unspecified but “very substantial” amount of agricultural and other products. That left some U.S. farmers cautiously hopeful Monday.

“This is the first positive news we’ve seen after months of downturned prices and halted shipments,” said John Heisdorffer, a farmer in Keota, Iowa, who is president of the American Soybean Association. “If this suspension of tariff increases leads to a longer-term agreement, it will be extremely positive for the soy industry.”

Kevin Scott, who farms near Valley Springs, South Dakota, and serves on the American Soybean Association, said the news provides hope for farmers who are storing their crops while awaiting better prices. But he cautioned that “it’s going to take a little more to move more beans.”

Among the skeptics is Scott Gauslow, who grows soybeans and corn near Colfax in eastern North Dakota’s Red River Valley. He noted the lack of specifics in the White House announcement.

“What if China calls tomorrow and says, ‘We changed our mind’?” Gauslow said. “There was nothing in writing, which scares me a little bit.”

China is the top market for North Dakota’s soybeans. The state’s farmers sell about $1.4 billion to China annually, according to the nonprofit North Dakota Trade Office.

Some retailers were also encouraged by the agreement, according to the National Retail Federation. At the same time, the federation noted that the truce prolongs the uncertainty around trading with China.

Jonathan Gold, an executive at the federation, said most retailers had already ordered goods for the first three months of the year, so the 90-day delay in the tariff hikes won’t affect them. Many companies have already switched their purchases from China to another country to avoid the potential 25% tariff.

“The question is, what happens at the end of 90 days?” Gold asked.

The global unfair trade practices that hurt American farmers and ranchers every day aren’t exactly state secrets, despite claims by opponents of agriculture who blindly argue that they don’t really exist or matter.

Every year, the U.S. government publishes a lengthy list of worldwide trade cheating called the National Trade Estimate. And, if anyone out there in the policy world still thinks U.S. agriculture isn’t being cheated, we welcome you to take a look.

But, just in case you don’t have time to read the 504-page report, we pulled a few nuggets to show you just how hard it is out there for American farmers and ranchers. And this doesn’t even include all the subsidies and unfair trade practices in India, Thailand, Brazil, and a whole host of other ag competitors.

China
From the intellectual property theft to massive stockpiles of steel and aluminum, China’s trade relationship with the U.S. is strained in many ways.

When it comes to agriculture, China is our largest export market. But America’s total trade deficit with China is significant at $375.2 billion in 2017. As the USTR notes in its report, China’s inconsistent enforcement of regulations and selective intervention create an unpredictable market.

  • China’s 2015 Food Safety Law has been disastrous for exports of dairy, infant formula, seafood, grains and oilseeds. When the international community opposed it, China agreed to an implementation delay but still moved to require an unnecessary official certification of all food products, even low-risk exports.
  • Beef, to some extent, is back on the table in China after years of an outright ban based on unscientific political whims. But China still doesn’t follow international standards on beef and maintains a ban on compounds that are widely used in the industry.
  • Subsides continue to distort the export market and price for many commodities in China. The government provides subsidies and support for cotton, rice, wheat and corn among others. And, China doesn’t follow the market access it promised when it entered the WTO through its tariff-rate quota system.

Canada
Our northern neighbor may be the largest good export market we have but the total trade imbalance for all U.S. goods is significant coming in last year at a whopping $17.5 billion.

The NAFTA reboot, known as the United States-Mexico-Canada Agreement or USMCA, aims to correct some of the imbalance but a look at the issues in agriculture shows just how significant the problem is for American farmers and ranchers.

  • Canada’s supply management system for diary, chicken, turkey and eggs severely limits the ability of U.S. producers to increase exports and means Canadian consumers pay more for these goods.
  • Dairy alone has been a huge problem for U.S. producers with an unfair pricing scheme called Class 7 that is aimed at decreasing U.S. imports of dairy components and increasing Canadian exports of skim milk powder.
  • U.S. grain producers also face a big challenge in Canada with a system that prevents them from receiving a premium grade for grain and instead only receiving a label for the country of origin, which unfairly tilts the market toward domestic producers.

Mexico
Our southern neighbor remains the second largest export market but, like Canada, the total trade deficit – including ag and non-ag products – is large coming in at $71.1 billion last year.

In agriculture, America fights a never-ending battle against unfair pricing, court orders, labeling and subsidies that restrict our exports. Let’s hope USMCA also does some good in Mexico but for now, the problems persist.

  • The international game of hot potato that Mexico and its court system have played with U.S. potato growers is just one area where unfair regulations have hurt American growers. Mexico, back in 2003, had banned the import of potatoes beyond 16 miles from the border. But after a scientific study in 2011, Mexico relaxed the requirement and opened up to potato imports. And then the Mexican potato industry challenged that move in court in 2014. The Mexican government issued new decrees in 2016 aimed at opening market access but the Mexican potato industry again won court injunctions. The legal challenges are ongoing and the USDA and USTR are still working to open market access for potatoes.
  • Raw milk is another area where Mexico has blocked U.S. producers. American dairies have been unable to ship raw milk to Mexico since 2012 because the Mexican government determined the veterinary import requirements didn’t apply to the product. In 2017, the U.S. continued to hold talks with Mexico on this requirement.
  • Meanwhile, and this move is not noted in the USTR’s report, Mexico gave the European Union a sweet deal on common food names related to cheese that blocked American cheese producers from selling their products in Mexico.

The USTR’s annual report is fascinating look at just how unfair the global market really is when it comes to everything from potatoes to plumbing fixtures. And it shows how truly critical a strong farm policy is to American farmers and ranchers.

The American agriculture sector is the most efficient in the world and produces the highest quality food at the best price. Our farmers and ranchers would love to compete on a level playing field. But at the end of the USTR’s 504-page report, one thing is clear: the playing field is far from level.

The U.S. Department of Agriculture announced the Agricultural Trade Promotion Program in August and the American Sheep Industry Association applied for funds in advance of today’s deadline in an effort to promote American wool and sheepskins to alternative international markets.

The program is designed to help American agricultural products affected by recent adverse trade conditions. China has long been the major buyer of American wool and sheepskins, so recent tariffs announced by the country were a blow to the industry.

Administered by the Foreign Agriculture Service, ATP Program funds would be used to promote sheepskins at trade shows in an effort to boost the market in that area of the industry. The funds would also provide support for exploring new markets for American wool in Eastern Asia, the Middle East and South America. This would allow for an effort similar to the existing Quality Samples Program, which ASI already uses to support the trial use of American wool exports around the world.

Additionally, funds would support promotion efforts and education of international buyers as to the benefits of American wool.

“China has been a key market for American wool and sheepskins,” said ASI Deputy Director Rita Samuelson. “The agriculture industry is fortunate to have a USDA/FAS program that supports the exploration of new or expansion of current export markets during this unexpected change in trade policy.

“With the tariff changes, ASI has been active visiting with wool and sheepskin exporters and identifying target markets. ASI is also looking at ways to further support the export of American wool while working collaboratively on projects.”

During the month of October, the Nebraska Corn Board hosted two trade missions which consisted of major U.S. corn buyers from Mexico and Saudi Arabia. The trade teams met with Nebraska farmers, suppliers and exporters of corn and corn co-products to better understand U.S. corn production, marketing and exporting logistics. The visits were coordinated in collaboration with the U.S. Grains Council, which works to develop export markets for U.S. agricultural products, such as corn, distiller’s dried grains with soluables (DDGS) and ethanol.

“American farmers have sustainably been growing quality agricultural products for generations,” said David Bruntz, chairman of the Nebraska Corn Board and farmer from Friend. “With 95 percent of the world’s population living outside of the United States, we must develop and maintain positive trade agreements with our global customers. By inviting these customers to the U.S., we’re able to help them understand our supply chain, so they’ll feel more confident doing business with American farmers. This undeniably has an economic value to our state and our country, but we’re also helping provide feed, fuel and fiber to the world.”

While in Nebraska, the Mexican grain buyers met with local corn farmers, Aurora Cooperative and Gavilon to better understand the U.S. value chain of white corn to Mexico from harvest to shipping. Nebraska is the largest white corn producing state in the country, and Mexico has historically been the largest importer of U.S. white corn. From Nebraska, the group further explored the American white corn industry through stops in Missouri and Kentucky.

Both trade missions, from Mexico and Saudi Arabia, represented only two of 21 international teams that were in the U.S. in October. The 21 teams consisted of more than 200 grain buyers who participated In Export Exchange, a bi-yearly event sponsored by the U.S. Grains Council, Renewable Fuels Association and Growth Energy. This year’s Export Exchange took place Oct. 22 through Oct. 24 in Minneapolis. The purpose of the event was to connect global grain buyers to over 300 domestic suppliers.

While the Mexican team visited Nebraska to learn about the white corn supply chain prior to Export Exchange, the grain buyers from Saudi Arabia came to Nebraska after the event concluded.

Saudi Arabia is the eighth largest overseas importer of U.S. corn, importing 3.7 million metric tons in market year 2017/2018, and is the second largest buyer of U.S. sorghum, importing 280 thousand metric tons during the 2017/2018 market year. The imported commodities are frequently used in dairies, feed and poultry companies.

While in Nebraska, the Saudi Arabian team visited the farms of Steve Wellman, director of the Nebraska Department of Agriculture, and Don Bloss, past chairman of the National Sorghum Producers. As major feed grain buyers, this team wanted to better familiarize themselves with U.S. corn and sorghum production. In addition to visiting Nebraska corn and sorghum farms, they visited Farmers’ Cooperative in Beatrice, the Aurora Cooperative corporate office and Pacific Ethanol, both in Aurora, and the University of Nebraska-Lincoln.

“We really had several great conversations with both teams over the last several weeks,” said Roger Berry, director of market development with the Nebraska Corn Board. “Our governments may not always see eye-to-eye, but these customers are so eager to learn more about U.S. agriculture. They want to be partners with American farmers in helping to meet the growing demands of their people, which is a major reason we host these trade teams. We have products to sell and we want to be able to show the world that U.S. agriculture is open for business.”

The Nebraska Corn Board partnered with the U.S. Grains Council to coordinate the missions. The U.S. Grains Council works in more than 50 countries and the European Union to market U.S. grains and their related products to build long-term demand from loyal customers. This work is also supported by funding from the USDA through the Market Access Program (MAP) and Foreign Market Development (FMD) program in the U.S. farm bill.