Trade agreements make progress

“Trade is the number one at the top of the list with this administration,” described National Cattlemen’s Beef Association (NCBA) President Kevin Kester. “Every day is a new day on trade.” 

On Dec. 4, President Trump tweeted that he’s the tariff king, which caused the stock market to drop 800 points. 

“Every day is a new day with this administration, but we fully support President Trump with his regulatory and trade efforts. We have connections with the White House and in agencies to make phone calls and progress,” Kester said.

Trade progress

“On the trade front, we’ve had some really good news for U.S. beef,” Kester commented. “We’re going to set an all-time value record this year, with over $8 million in U.S. being exported this year.” 

Japan is the U.S.’ number one trading partner, with over $2 billion in value exported into Japan for the first time, even with a 38.5 percent tariff. 

South Korea has skyrocketed to the second slot on the list, with $1.6 billion going to the country.

“All the Costcos in South Korea have converted from Australia beef to U.S. beef,” he said. “We also finished the KORUS agreement a few months ago, which is really positive news.” 

Finally, Canada and Mexico are big trading partners for the U.S., bringing $1 billion in exports in the past each.

“Canada and Mexico are two of our strongest trading partners, along with the Hong Kong and China markets,” Kester said. “We have some challenges with China with hormones and anti-biotics, but some access is better than no access. The potential here is unbelievable and unlimited.” 

He added, “We need to keep our eye on China.”
The sixth-high market for the U.S. is Taiwan, marking over $500 million of U.S. beef into Taiwan in 2018. The increase was 36 percent over 2017. 

“The market is really humming in Taiwan, and Wyoming can probably take some credit for that,” he explained. 

Agreements

Kester is among a group of approximately 30 advisors to U.S. Trade Ambassador Robert Lighthizer, and he said, “For trade agreements, there are a lot of balls in the air.” 

The U.S.-Mexico-Canada Agreement (USMCA) has just been signed by the U.S., and Kester said he hopes Canadian Prime Minister Justin Trudeau and Mexican President Andrés Manuel López Obrador follow suit soon.

“All three governments have to ratify the agreement,” he added. 

U.S. Secretary of Agriculture Sonny Perdue emphasized, “I have often said that we live in the best neighborhood on Earth – North America – and the signing of a new trade agreement with Mexico and Canada helps cement our highly integrated relationship as nations.  President Trump has fulfilled a promise, which many said couldn’t be done, to renegotiate the North American Free Trade Agreement and improve the standing of the entire American economy, including the agriculture sector.”

Perdue continued that USMCA has significant benefits for producers, including greater access and lower barriers for many products. 

“For U.S. beef, this is good because we held steady with no tariffs and no non-tariff trade barriers for U.S. beef into Canada and Mexico,” said Kester.

Perdue noted, “The deal eliminates Canada’s unfair Class 6 and Class 7 milk pricing schemes, opens additional access to U.S. dairy into Canada and imposes new disciplines on Canada’s supply management system.”

In addition, the agreement expands access for poultry and eggs, and it addresses Canada’s wheat grading process to increase the ability of U.S. wheat farmers to be competitive. 

U.S. House Agriculture Committee Chairman K. Michael Conaway (R-Texas) said, “Farmers, ranchers and agribusiness in general will benefit from a strengthened trilateral trade agreement with Canada and Mexico, and President Trump brought our nation one step closer to realizing this important victory. There are several important wins for our producers in this deal, and I look forward to Congress swiftly approving the agreement in the new year.”

“This is good news for American farmers, and we now need Congress to follow suit and enact the necessary implementing legislation,” Perdue concluded. “I commend President Trump and our U.S. Trade Representative Ambassador Lighthizer for their perseverance, leadership and hard work.”

China

China also promised to relax its trade barriers and tariffs after the G20 Summit in Argentina over the first week of December. With 37 percent tariffs on beef into China today, the industry stands to see gains from tariff reductions.

U.S. Meat Export Federation President and CEO Dan Halstrom commented, “U.S. meat exports have also become entangled in trade disputes with China, so it is encouraging to see the U.S. and China return to the negotiating table.”

“Our partners in soybeans, corn and pork are taking a heavy hit on tariffs, so we’re hoping those will be relaxed and our business relationships in China will begin moving again,” Kester said.

President Trump gave a 90-day grace period on tariffs for Chinese goods into the U.S., and Kester said, “I hope this is the start of a good relationship with China for trade.”

New agreement

“The U.S. has also officially notified Congress that formal negotiations will begin with the European Union, Japan and the United Kingdom for trade,” Kester said. “Number one on the list is a bilateral trade agreement with Japan.”

As the Trans-Pacific Partnership moves ahead, starting Jan. 1, the agreement will go into effect for the 11 remaining countries. The result for those countries involved is a 27 percent tariff on Jan. 1, and 26 percent on April 1. 

The U.S. beef market is directly impacted, as its largest competitor in the region, Australia, will see significant price advantages.

“As soon they get some rain and they raise their cow numbers, Australia is going to kick our butts in Japan, costing a lot of money and market share,” Kester said. “It is important we get some negotiations started in Japan as soon as possible.”

“Global demand for U.S. red meat is very strong,” Halstrom commented, “but exports cannot reach their full potential until the retaliatory duties imposed by Mexico, China and Canada are removed.”

Saige Albert is managing editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.