For the Week Ending July 26, 2019

July 26, 2019

USDA ANNOUNCES SECOND TRANCHE OF TRADE RELIEF PACKAGE

On Thursday, the U.S. Department of Agriculture announced details of its second program providing trade retaliation relief to American farmers. Eligible U.S. pork producers will receive $11 per head based on inventory between April 1-May 15, 2019. The USDA also announced it will make pork purchases of $208 million to support its programs for the food insecure. “U.S. pork producers are highly dependent on export markets, shipping more than 25 percent of production to foreign markets. We are grateful to the Trump administration for providing partial relief as hog farmers have incurred significant losses due to trade disputes that have lingered for more than a year,” said NPPC President David Herring. USDA’s second trade retaliation relief package is valued at $16 billion, with $14.5 billion dedicated to producer payments, $1.4 billion for commodity purchases and $100 million through its Agricultural Trade Promotion Program to help U.S. farmers and ranchers identify and access new export markets. Sign up for the program begins Monday, July 29 and ends Dec. 6, 2019. For more information, visit: www.farmers.gov/manage/mfp. A summary of U.S. pork-specific provisions in the package is available here.  

SENATE BILL TO ADD AG INSPECTORS RECEIVES COMMITTEE APPROVAL

The Senate Homeland Security and Governmental Affairs Committee approved legislation Wednesday that would ensure the safe and secure trade of agricultural goods across our nation’s borders by authorizing U.S. Customs and Border Protection (CBP) to hire additional agricultural inspectors to fully staff America’s airports, seaports and land ports of entry. The legislation, Protecting America’s Food & Agriculture Act of 2019, was introduced earlier this month by Sens. Gary Peters (D-Mich.), Pat Roberts (R-Kan.), John Cornyn (R-Texas) and Debbie Stabenow (D-Mich.). NPPC has been advocating for an increase in ag inspectors since its spring Legislative Action Conference in early April and NPPC President David Herring’s statement of support was included in a press release when the bill was introduced earlier this month. 

USTR: THAILAND MAY LOSE TRADE BENEFITS IF IT DOESN’T REMOVE U.S. PORK EXPORT BARRIERS

On Monday, the Office of U.S. Trade Representative said Thailand could lose U.S. trade benefits unless it removes barriers to U.S. pork exports, Politico reported. As USTR announced, the two nations met under the U.S.-Thailand Trade and Investment Framework Agreement (TIFA) to discuss the bilateral trade relationship, including the importance of Thailand taking action to reduce the U.S. trade in goods deficit and address the pressing trade concerns at the heart of the ongoing Generalized System of Preferences (GSP) reviews of pork market access and worker rights in Thailand. The pork market access review began in May 2018, after NPPC lodged a complaint. Thailand is a top beneficiary of the GSP program, which gives duty-free treatment to certain goods entering the United States. The program allows for removal of a country’s benefits if it fails to provide the United States “equitable and reasonable access” to its market. Thailand has a number of trade barriers that operate as a de facto ban on U.S. pork exports. It has been unresponsive to calls from the United States to lift the restrictions and, in fact, has continued to ramp up import protections for pork in recent years. 

U.S., CHINESE OFFICIALS HOLDING TRADE TALKS NEXT WEEK

The White House announced on Wednesday that U.S. Trade Representative Robert Lighthizer and Secretary of Treasury Steven Mnuchin will travel to Shanghai, China, next week to continue trade talks. The trade talks will begin July 30 and will cover a range of issues, including agriculture and non-tariff barriers. “There’ll be a few more meetings before we get a deal done,” Mnuchin told reporters, CNBC reported. “I wouldn’t expect that we’ll resolve all the issues. But the fact that we’re back at the table at the direction of the two presidents is important.” NPPC continues to reiterate the importance of ending the trade dispute with China that has placed a 50% punitive tariff on U.S. pork in addition to the regular tariff of 12%, putting the U.S. pork industry at a significant disadvantage to its global competitors l. Were it not for China’s trade retaliation, U.S. pork producers would be in a strong position to capitalize on an unprecedented sales opportunity in China, where domestic production is down significantly as African swine fever has ravaged the country’s swine herd. Bloomberg recently reported that the Chinese government has suggested waiving tariffs on certain U.S. agricultural exports including pork. If actually implemented for pork, this would be a very significant development.

NPPC TRADE COMMITTEE MEETS, LOBBIES THIS WEEK

NPPC’s Trade Committee met in Washington, D.C., this week to discuss U.S. pork industry trade priorities and to brief Capitol Hill. The NPPC Trade Committee members spoke about getting US pork on an equal footing as soon as possible with its competitors in the E.U. and the CPTPP nations which have better market access in Japan through trade agreements. The US pork industry is losing market share in Japan at an alarming rate. The NPPC Trade Committee also briefed Capitol Hill on the damage being done to the industry because of China’s 50% punitive tariffs on pork, as well as the need for swift congressional passage of the U.S.-Canada-Mexico Agreement (USMCA). 

NPPC SIGNS CONGRESSIONAL LETTER URGING PASSAGE OF USMCA

This week, a letter spearheaded by the U.S. Chamber of Commerce and signed by NPPC and # other organizations representing virtually every U.S. economic sector, was sent to members of Congress, urging passage of the U.S.-Mexico-Canada Agreement (USMCA). “More than 12 million American jobs depend on trade with Canada and Mexico. U.S. manufacturers export more made-in-America manufactured goods to our North American neighbors than they do to the next 11 largest export markets combined, and the two countries account for nearly one-third of U.S. agricultural exports. They are also the top two export destinations for U.S. small and medium-size businesses, more than 120,000 of which sell their goods and services to Canada and Mexico. Approval of USMCA will ensure U.S. manufacturers, farmers, and service providers can continue to access the Canadian and Mexican markets. The new pact guarantees that virtually all U.S. exports will enter these markets tariff-free,” the letter explained. A copy of the letter is available here.

NPPC ISSUES “MEAT OF THE MATTER” HIGHLIGHTING NEED FOR LABOR REFORM

There is a severe shortage of labor in the pork industry both on farm and in packing plants, and that’s why NPPC is actively advocating for reform of the H-2A visa program, NPPC Vice President and Counsel, Global Government Affairs Nick Giordano wrote in a “Meat of the Matter” published this week. Despite growing opportunities for employment and rapid wage growth, the pork sector struggles to find workers. Our production is a year-round endeavor and due to its seasonality component, pig farmers are unable to secure their workforce needs through the H-2A visa program. Agricultural visa reform is clearly needed. Agricultural visa programs should be designed with the flexibility to meet the needs of all agricultural producers—from fruit and vegetable farmers to dairy and pig farmers. Year-round labor needs should be a primary focus of any H-2A reform or the foundation of any new program. NPPC has been working closely with other agricultural stakeholders to stress the importance of agricultural visa reform to both the Trump administration and Congress. A link to the “Meat of the Matter” is here.

BORIS JOHNSON FORMALLY BECOMES NEW U.K. PRIME MINISTER

Former London Mayor and Foreign Secretary Boris Johnson was chosen as U.K.’s new prime minister on Tuesday, replacing Theresa May. Johnson had campaigned in support of Brexit and formally took the office on Wednesday. He has pledged to leave the European Union on Oct. 31, even if there is no deal reached with the EU. In October 2018, the Trump administration announced its intention to negotiate a trade agreement with the U.K. NPPC is supportive of negotiations provided the agreement eliminates tariff and non-tariff trade barriers on pork.