Trade update: AFBF provides update on U.S. trade relations during WyFB’s annual meeting
On Nov. 12-14, the Wyoming Farm Bureau Federation (WyFB) held their 101st annual meeting in Casper. Several individuals from the American Farm Bureau Federation (AFBF) joined the meeting virtually to address attendees.
On the first day of the meeting, AFBF Senior Director of Congressional Relations Dave Salmonson tuned in to provide an update on U.S. trade relations.
“Trade is something AFBF policy has long supported,” Salmonson stated. “Expanding our marketing opportunities through good trade agreements is something we want to see happen and will continue working towards.”
A phased approach
To begin the conversation, Salmonson first discussed the Trump administration’s unprecedented phased approach to many of the trade agreements they made happen during the past year.
“The U.S. is used to making comprehensive trade agreements. This would include over 30 different chapters on all kinds of complicated trade rules, and they took five or more years to implement,” he explained.
“However, the Trump administration’s phased approach focused on a few large issues including agriculture, automobiles and other technology,” continued Salmonson. “They were executive agreements so they didn’t go through Congress, and they only took about a year and a half to come to conclusion.”
Phase One Trade Agreement
One such agreement, according to Salmonson, is the Phase One Trade Agreement between the U.S. and China. This agreement took effect in mid-February and has two main components.
“The first is purchases, and the second is standards,” Salmonson stated.
In regards to purchases, Salmonson explained the agreement stated China would buy $8 billion of U.S. agricultural products over a two-year time frame, with $36 million purchased in 2020 and the remainder in 2021.
“The latest figures from the U.S. Department of Agriculture (USDA) and the office of the U.S. trade representative, show the U.S. has exported over $23 billion or 70 percent of what we were supposed to sell to China during this calendar year,” he said.
Salmonson noted trade with China got off to a slow start after the COVID-19 pandemic slowed down their economy. Soon after, the U.S. went into lockdown, so there wasn’t a lot of product moving in and out of either country.
“However, China seems as if they want to live up to their purchase commitments, so purchases have really improved this fall,” Salmonson said, noting many of their purchases are heavily grain oriented, centered around soybeans, sorghum and corn.
On the standards side of the deal, Salmonson explained China committed to 57 standards and has completed 50 of those so far.
“Purchases are a two-year commitment, but changes in standards continue way beyond that,” he stated. “While things are certainly moving forward with China, there is still a lot of growth in the particular foreign market.”
Another phased trade agreement discussed by Salmonson is the U.S.-Japan Trade Agreement (USJTA).
“In January, we also signed an agreement with Japan, primarily making sure the U.S. kept up with tariffs in other countries, especially those involved in the Trans-Pacific Partnership (TPP), which the U.S. left in 2017,” he explained.
“With the USJTA, the U.S. will see the same import tariffs as many other countries regarding Japanese trade,” continued Salmonson. “The beef tariff, which was around 38.5 percent, is now down to 25 percent, and we will continue to see it go down to around 10 percent over the next few years.”
Salmonson noted a phase two negotiation of the USJTA is expected in the next few years.
“About two years ago, the U.S. revised and updated their trade agreement with South Korea,” Salmonson said, noting President Trump’s initial distaste for the Korea-U.S. Free Trade Agreement (KORUS).
“During the June 2017 U.S.-Korea Summit, President Trump and his Korean counterpart Moon Jae-in discussed the renegotiation of KORUS,” he continued. “Over the next few years they continued the negotiation, and on Jan. 1, 2019, the new KORUS entered into force.”
“Japan and South Korea are two of our largest beef export markets, so we are happy to have those agreements moving ahead,” he added.
Other trade agreements
In addition to the U.S.-China Phase One Trade Agreement, USJTA and KORUS, Salmonson provided brief updates on a few other trade agreements and export markets.
In fact, he noted there are several issues taking place in Europe.
“The U.S. is currently trying to negotiate with the United Kingdom as they leave the European Union,” explained Salmonson. “These negotiations have been through five rounds, and we don’t see an end to them coming anytime soon, at least on the agriculture side.”
He further noted, “Taiwan has come forward and said they would reduce some long-standing barriers on U.S. beef and pork, so we are considering a trade agreement there.”
Hannah Bugas is the managing editor of the Wyoming Livestock Roundup. Send comments on this article to email@example.com.