Farm Progress

Trade matters to agriculture and it seems Trump’s team and people all over the world are listening.

Jacqui Fatka, Policy editor

March 17, 2017

5 Min Read
Olivier Douliery/Pool/GettyImages

If there is one thing that has everyone in agriculture uneasy, it is how President Trump will handle trade, and the impact it will have on agriculture. I’ve discussed it in several blogs over the last few months, and this week we started to see a bit more into Trump’s trade crystal ball.

“If we do not sell agriculture commodities over the next several months, you, sir, will have a problem on your hands. We all will have a problem on our hands,” Senate Agriculture Committee chairman Pat Roberts, R-Kan., shared during the Senate Finance nomination hearing for U.S. Trade Representative nominee Robert Lighthizer.

Here are a few highlights of trade notes I’ve gathered this week.

USTR nominee knows ag. During the Senate Finance nomination hearing, agriculture was easily brought up more than any other topic. And Lighthizer was quick to point out he has a firm understanding of agriculture from his days negotiating the resumption of grain exports to Russia in 1983.

“It is hard for me to understand why we tolerate so many barriers when American is the number-one producer,” Lighthizer said of agriculture. “If you believe in trade and market efficiency, we have to believe agriculture is more of a positive than it is. Opening up more markets for agricultural sales is a very high priority for us.”

RELATED CONTENT: USTR nominee promises to be champion for ag

Trump inviting recommendations on ag trade deals. Executive staff leaders from 11 major U.S. agricultural and agribusiness organizations met with National Economic Council director Gary Cohn; Ray Starling, recently appointed as a presidential adviser on food and agriculture, and Andrew Quinn, a newly named adviser on trade Wednesday. Corn Refiners Association president and CEO John Bode said his sense is that the National Economic Council understands food and agriculture trade extremely well.

“They are focused on the need to build food and agriculture trade as part of the recipe to strengthening our export position in looking at trade deficits,” Bode said.

Bode said the broad-based U.S. Food & Agriculture Dialogue for Trade, a coalition representing more than 150 companies and trade groups, plans to submit recommendations to the President’s trade team and promised them as soon as possible. He explained some of the recommendations will be industry-wide, while various groups may also have more sector-specific recommendations.

RELATED CONTENT: Meeting shows Trump’s team focused on growing exports  

Agriculture will not be NAFTA sacrificial lamb. Lighthizer said in his nomination hearing that he hopes and believes NAFTA can be renegotiated in a way that helps all countries and doesn’t put agriculture in a precarious position. He said the general consensus is that NAFTA is outdated, but during the course of negotiations, it will be important to not affect those who have been winners under NAFTA, as agriculture has been.

"Agriculture has done pretty well," Lighthizer said of NAFTA, and it's important to "be careful to not lose what we gained." He noted that the U.S. is an important market to Mexico, so there's leverage to do it properly and rationally to improve NAFTA while not hurt agriculture -- but he knows it won't be easy.

The U.S. and Mexico "both need each other a lot economically. I think that's something that helps both of us and doesn't risk damage to our agricultural sector," he told the senators.

Lighthizer also said a decision has not been made on whether renegotiations will be bilateral or trilateral with Canada and Mexico.

Japan will be early bilateral focus. Also in the discussions with the National Economic Council, Bode noted a deal with Japan is high on the President’s wish list. This was reiterated by the fact when President Trump went golfing with Japan’s prime minister, they didn’t even get to hole two before getting into the need for a bilateral.

Lighthizer also stressed that, "Japan, of course, is a primary target for increased access for agriculture."

U.S. beef and pork producers are the biggest winners in this scenario. Japan is the highest value international market for exports. In fiscal 2016, Japanese consumers purchased $1.4 billion of U.S. beef products and $1.5 billion of U.S. pork products. Demand in the Asian nation for U.S. beef and pork is very strong despite Japanese tariffs and other import measures that limit market access for both products.

Trade missions continue to smooth out relations. The leaders of three major U.S. dairy organizations Wednesday promised to continue a strong commitment to their time-tested partnership with Mexico’s dairy industry and consumers.

US Dairy Export Council president Tom Vilsack and National Milk Producers Federation president Jim Mulhern spoke at the Femeleche conference in Mexico this week, which brought together Mexican dairy industry leaders, farmers and government officials. As part of the coordinated message of collaboration and partnership with Mexico, the three CEOs of the U.S. dairy policy organizations are also meeting with a variety of government officials, including Mexico's minister of agriculture and the U.S. ambassador to Mexico.

“Mexico is our friend, ally and most important trading partner,” said Jim Mulhern, president and CEO of NMPF. “Our goal this week in visiting Mexico is to communicate our steadfast commitment to our partnership with the Mexican industry, even as we continue to explore ways to deepen that relationship by working on issues of mutual benefit.”

RELATED CONTENT: U.S. Dairy Coverage from Mexico

U.S. Grains Council (USGC) leaders also traveled to Mexico this week to hear customer concerns about the state of trade relations between the two countries and offer reassurances about U.S. grains producers’ dedication to their market.

In meetings with top grain importers and government officials, the group focused on the importance of the U.S.-Mexico trading relationship to the U.S. farmers and grain traders who make up USGC’s membership.

“Our goals this week were to listen to our customers and let them know how critical their business is to our industry and how much we value the work we do with them,” said USGC CEO Tom Sleight.

“We have worked closely with the Mexican industry for decades as partners, helping them build their capacity, while their purchases and their loyalty have helped our farmers build their operations. We are here to make clear that we are dedicated to sustaining, improving and expanding that work together in any way we can.”

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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