For the Week Ending November 15, 2019

November 15, 2019

USMCA DEAL COULD BE IMMINENT, HOUSE SPEAKER PELOSI ANNOUNCES
A deal between House lawmakers and the administration on the U.S. Mexico-Canada (USMCA) could be announced shortly, House Speaker Nancy Pelosi (D-Calif.) announced on Thursday. “I do believe that if we can get this to the place it needs to be — which is imminent — that this can be a template for future trade agreements,” she said. Congressional ratification of the USMCA agreement remains the top priority for NPPC, but there are only a limited number of legislative days left in the year. An agreement would provide much-needed certainty for U.S. pork producers, ensuring zero-duty market access to two of its largest export markets. Since the trade agreement was signed last November, NPPC and its members have been aggressively working to ensure ratification, educating lawmakers about the significant benefits that USMCA provides for U.S. hog farmers and becoming a “top ask” during our spring and fall congressional fly-ins. Additionally, NPPC recently launched a new campaign, “It’s Pork O’ Clock Somewhere,” which focuses on the importance of USMCA by highlighting pork and the many ways it’s enjoyed across North America. NPPC urges Congress to quickly reach consensus on any outstanding issues and swiftly bring USMCA up for a vote.  

NPPC MEETS THE PRESS IN KANSAS CITY
NPPC was out in full force at the National Association of Farm Broadcasting’s “Trade Talk” event in Kansas City, Mo., on Thursday. NPPC staff conducted more than 35 interviews on issues of importance to U.S. pork producers, including removal of all punitive tariffs on American pork to China for five years, quick implementation of the U.S./Japan trade deal, ratification of the USMCA trade agreement, funding for 600 new Bureau of Customs and Border Protection agricultural inspectors and implementation of the Foot and Mouth Disease vaccine bank. NPPC President-Elect Howard (AV) Roth, NPPC Vice President and Counsel, Global Government Affairs Nick Giordano, NPPC Chief Veterinarian Liz Wagstrom and NPPC Assistant Vice President Domestic Affairs & Counsel Michael Formica, along with the NPPC communications team, attended the event, which brings together broadcast professionals, ag industry leaders, and students focused on the agriculture industry.

TRUMP EXPECTS U.S.-CHINA INTERIM TRADE DEAL ‘SOON’
An interim trade deal between the U.S. and China “could happen soon,” President Trump said this week in a speech at the Economic Club of New York. China is “dying to make a deal. We’re the ones that are deciding whether or not we want to make a deal,” he said. “A significant phase one trade deal with China could happen….But we will only accept a deal if it’s good for the United States and our workers and our great companies because we’ve been hit very hard,” Trump continued, noting that China likely makes up nearly 60 percent of U.S. trade deficits. The U.S. has already implemented a 25 percent tariff on Chinese imports into the U.S. on the first $250 billion of product. “If we don’t make a deal, we’re going to substantially raise those tariffs [on China],” Trump added. As already announced, a “phase one” trade deal would include a pledge for China to buy $40 billion-$50 billion in U.S. agricultural products, including pork. While specific timing is unclear, the interim trade deal may be signed Dec. 3-4 at the NATO summit in London. NPPC is urging the U.S. to press China to permanently exclude U.S. pork from all tariffs in China for five years. With African swine fever dramatically reducing domestic production in China, the United States is well positioned to meet the country’s need for safe, nutritious and affordable pork and to manage an emerging food price inflation challenge. In doing so, U.S. pork can single handedly put a huge dent in the United States’ trade imbalance with China. 

JAPAN’S DIET WILL VOTE NEXT WEEK ON U.S. TRADE DEAL
Japan’s House of Representatives is scheduled to vote next week on the recently announced trade agreement with the U.S. On Tuesday, Nov. 19, the Lower House is expected to approve the trade deal, which would then move to the House of Councillors, the upper chamber of Japan’s Diet, for deliberations the following day. The trade deal was signed in early October and it’s expected to be implemented by Jan. 1, 2020. In remarks this week, President Trump described the agreement as “historic” and said it will “substantially reduce barriers for American agriculture and facilitate $40 billion in digital trade and agricultural purchases.” He also indicated there could be future trade deals with Japan. “That deal was signed, and it’s a great deal, but it’s only phase one of the Japan deal, too,” he said. Once implemented, the trade agreement will place U.S. pork producers back on a level playing field with international competitors in one of our most important export markets. Dr. Dermot Hayes, an economist at Iowa State University, estimates exports to Japan could grow from $1.6 billion in 2018 to more than $2.2 billion over the next 15 years under market access terms included in the agreement. 

THAILAND TO FIND NEW MARKETS FOR GSP-SUSPENDED PRODUCTS
Thailand announced this week that it will look to find new markets for products that are to lose benefits under the U.S. Generalized System of Preferences (GSP). In October, the Office of the U.S. Trade Representative announced that it would be suspending $1.3 billion in trade preferences for Thailand under the GSP in April 2020, based on the country’s failure to adequately provide internationally recognized worker rights. The GSP provides preferential duty-free treatment for thousands of products to bolder the economies of developing nations. In addition, the U.S. government has been negotiating full market access of U.S. pork and pork products. Currently, Thailand has a de facto ban on U.S. pork. NPPC believes the country should eliminate its de facto ban, allowing all U.S. pork and pork products to have full access.

WHAT’S AHEAD?

HOUSE HEARING ON U.S.-JAPAN TRADE DEAL NEXT WEEK
The House Ways and Means Trade Subcommittee is holding a hearing on Nov. 20 to discuss the recent U.S.-Japan trade deal. Specifically, the hearing will focus both on the trade deal signed in October “and prospects for a second phase of negotiations for a bilateral agreement to cover trade in a comprehensive manner.” Implementation of the trade deal is anticipated in early 2020. Japan is the largest value market and the second largest volume market for U.S. pork exports. Once implemented, the trade agreement will place U.S. pork producers back on a level playing field with international competitors in one of our most important export markets. The hearing begins at 10am ET.