For the Week Ending September 29, 2017
October 20, 2017
NAFTA RENEGOTIATION TALKS CONTINUE
The third round of talks on renegotiating the North American Free Trade Agreement (NAFTA) concluded this week in Ottawa, with Canadian Minister of Foreign Affairs Chrystia Freeland stating that progress was made “on a number of bread-and-butter trade issues.” During the negotiations, the United States tabled a proposal to increase trade protections for seasonal and perishable produce. NPPC and most other U.S. agriculture groups oppose the proposal, which likely would provoke America’s NAFTA partners to push for mechanisms that make it easier to restrict U.S. farm exports. NPPC continues to press the Trump administration to maintain the current zero-duty market access into Canada and Mexico, emphasizing that U.S. pork cannot be collateral damage in the NAFTA renegotiations. The next round of talks is set for Oct. 11-15 in Washington, D.C.
GOP TAX REFORM PLAN UNVEILED
President Trump and congressional Republicans this week rolled out a blueprint for tax reform, giving few details but offering a “starting point” for negotiations. The framework calls for lower tax rates for incorporated businesses, non-incorporated businesses and individuals, elimination of most credits and deductions as well as the estate tax and immediate write-off of new investments for at least five years. It does not address cash accounting, like-kind exchanges and business interest deductions as well as the stepped-up basis related to estate taxes. NPPC continues to ask members of Congress to maintain the option for a cash accounting system, eliminate the estate tax while maintaining stepped-up basis, lower taxes on capital investments, allow immediate expensing of capital investments, simplify the tax code to reduce compliance costs and lower the corporate tax rate.
NPPC SUPPORTS EARLY PORT CONTRACT EXTENSION TALKS
The Ports Coalition, which includes NPPC, applauded the International Longshoremen’s Association and the U.S. Maritime Alliance for agreeing to early discussions on contract renegotiations of labor agreements that cover U.S. East and Gulf coast ports. The current agreement expires next year. The Ports Coalition, which represents the interests of manufacturers, agribusinesses, wholesalers, retailers, importers, exporters, distributors and transportation and logistics providers, has urged the sides to conduct early negotiations to avoid port disruptions such as occurred in late 2014 into early 2015 at West Coast ports. Work slowdowns at the ports cost the U.S. meat industry millions of dollars in lost export sales. Click here for a recent article on the pending contract extension.
ROSS VISITS CHINA AHEAD OF TRADE MISSION, TRUMP VISIT
U.S. Secretary of Commerce Wilbur Ross traveled to China this week in preparation for his November trade mission and President Trump’s state visit, where the United States will look to expand Chinese market access for U.S. goods. Increasing exports to China would reduce America’s trade deficit with the Asian nation. NPPC expects U.S. pork to be among the topics of discussion since China is the largest consumer of pork in the world. Because China is a high-cost producer of pork and the United States a low-cost producer, there is tremendous potential for increased U.S. pork exports to China. Last year, the U.S. pork industry shipped $1.1 billion of product to China.
JAPANESE SNAP ELECTION WILL DELAY FINALIZATION OF TPP 11 DEAL
Japanese Prime Minister Shinzo Abe this week called for an early, or snap, election, one year before scheduled elections, to take advantage of favorable public opinion of him, following his recent response to North Korea’s saber rattling. The election could delay finalization of the TPP 11 – the Trans-Pacific Partnership trade agreement that includes 11 Pacific Rim countries but no longer includes the United States. (President Trump in January withdrew from it.) The deal was expected to be finalized in November. NPPC, which strongly supported the TPP, continues to urge the Trump administration to explore bilateral free trade agreements, beginning with Japan.
HOGS AND PIGS REPORT CONFIRMS INDUSTRY EXPANSION
The U.S. hog inventory on Sept. 1 was a record high, according to the U.S. Department of Agriculture’s Quarterly Hogs and Pigs report, which was released Thursday. The report, which presents data – inventory number by class, weight group, farrowings and farrowing intentions – on the U.S. pig crop for 16 major states and the entire country, showed an inventory of 73.5 million head, up 2 percent from the same time last year and 3 percent higher than the previous quarter. The average pigs saved per litter also was a record high, reaching 10.65 for the June-August period. The report was close to analysts’ expectations and confirmed that the pork industry is continuing to expand, albeit at a relatively controlled pace.
NORTHEY, IBACH NOMINATIONS FOR USDA POSTS TO BE CONSIDERED
The Senate Committee on Agriculture, Nutrition and Forestry next week will consider the nominations of Bill Northey and Gregory Ibach for top posts in the U.S. Department of Agriculture. President Trump tapped Northey, who is secretary of the Iowa Department of Agriculture, to be Undersecretary of Farm Production and Conservation; Ibach, who is director of the Nebraska Department of Agriculture, was picked as Undersecretary for Marketing and Regulatory Programs. A hearing on the nominees is set for Oct. 5.
HOUSE COMMITTEE ON AGRICULTURE TO HOST FARM BILL LISTENING SESSION
The U.S. House Committee on Agriculture will continue take input from America’s farmers, ranchers and agriculture industry stakeholders on 2018 Farm Bill priorities when it holds its next hearing – “The Next Farm Bill, Conversations in the Field” – in Cobleskill, N.Y., on Oct. 9.