For the Week Ending August 25, 2017

TRUMP SAYS U.S. MAY WITHDRAW FROM NAFTA

President Trump at a rally this week in Phoenix hinted that he may withdraw from the North American Free Trade Agreement (NAFTA), stating: “I’ve told you from the first day that we will renegotiate NAFTA, or we will terminate NAFTA. I don’t personally think you can make a deal without termination, but we’re going to see what happens.” The NAFTA comments are the first from Trump since renegotiation talks on the 23-year-old deal between the United States, Canada and Mexico began Aug. 16. If the agreement is terminated, the U.S. economy will suffer, especially the agriculture industry and U.S. pork producers, NPPC has pointed out. Iowa State University economist Dermot Hayes calculated that if Mexico placed a 20 percent duty on U.S. pork – a likely response to a U.S. withdrawal from NAFTA – and allowed other countries duty-free access, the U.S. pork industry eventually would lose the entire Mexican market. That would result in a loss of 5 percent of U.S. pork production at a cost of $14 per hog; the cumulative impact on the U.S. pork industry would be $1.7 billion. NPPC outlined the benefits of NAFTA in a white paper released earlier this year. The organization has urged the Trump administration to “modernize” NAFTA and to maintain the zero-tariff rate on pork trade with the U.S. pork industry’s No.2 (Mexico) and No. 4 (Canada) export markets.

NPPC TELLS PERDUE FMD VACCINE BANK NEEDED

NPPC this week in a letter to Agriculture Secretary Sonny Perdue detailed the need for a Foot-and-Mouth Disease (FMD) vaccine bank and said the 2018 Farm Bill “offers the only path to establish sufficient resources for an adequate supply of vaccine.” According to Iowa State University’s Dr. James Roth, director of the school’s Center for Food Security and Public Health, the estimated annual cost for the vaccine bank is $150 million. While the amount is significant, NPPC pointed out, it pales in comparison to the estimated loss of $200 billion over 10 years to the livestock and corn and soybean industries alone if an FMD outbreak were to occur and not be contained through vaccination. NPPC will continue pushing for establishment of and funding for the vaccine bank through the Farm Bill.

U.S., KOREA REMAIN AT ODDS ON UPDATING FREE TRADE AGREEMENT

The United States and South Korea this week began discussions on their current trade pact – the Korea-U.S. Free Trade Agreement (KORUS) – but remain at odds on updating the deal, with South Korea refusing to accept the U.S. call for “trade imbalance resolution, full implementation of the existing FTA and modification and amendment of the current deal.” South Korea walked away from Tuesday’s talks, saying it needs further “investigation, analysis and evaluation” before making any decision. NPPC has emphasized to the Trump administration the importance of KORUS and the detrimental effect on U.S. pork producers of reverting to pre-KORUS tariffs, which likely would cause the U.S. pork industry to lose the South Korean market to the European Union, Chile and other countries that have preferential trade access. It would be a costly loss: For the 12-month period ending May 2017, U.S. pork exports to South Korea were $444 million, making the Asian nation the No. 5 export market for U.S. pork. Talks between the United States and South Korea are expected to continue over the coming weeks.

TALKS ON FINALIZING TPP SET; NPPC WARNS OF LOST MARKET SHARE

Three days of talks among the 11 remaining countries in the Trans-Pacific Partnership begin Monday in Australia, and Japan has proposed suspending concessions the United States secured from TPP member nations when it was still in the deal. President Trump withdrew from the trade agreement when he took office in January. The remaining TPP countries are exploring ways to implement the deal without the United States. NPPC, which was a strong supporter of the TPP, has warned that the U.S. pork industry will lose market share in the Asia-Pacific if the United States doesn’t conclude bilateral free trade agreements (FTAs) with countries in the region. NPPC is urging the Trump administration to begin trade talks with Japan – the U.S. pork industry’s No. 1 export market – and with countries such as Vietnam and the Philippines. Pork and other exports from the United States already will be at a competitive disadvantage once the European Union and Japan implement their recently concluded trade deal – likely sometime in 2019. U.S. exporters will be further hurt if the remaining TPP nations implement a trade agreement. Pork from TPP members Canada and Mexico, for example, would have an advantage over U.S. pork exports in Japan, Vietnam, Malaysia and other markets.

WHAT’S AHEAD

TELECONFERENCES ON REVISING ‘WOTUS’ DEFINITION TO BE HELD IN FALL

The U.S. Environmental Protection Agency and the Army Corps of Engineers are expected to announce Monday that they will have teleconferences to take input from stakeholders on revising the definition of “Waters of the United States” (WOTUS) under the Clean Water Act. The agencies in 2014 proposed a WOTUS rule, which took effect Aug. 28, 2015, that broadened their jurisdiction over “navigable” waters to include, among other water bodies, upstream waters and intermittent and ephemeral streams such as the kind farmers use for drainage and irrigation. It also covered lands adjacent to such waters. Widespread opposition to the regulation, including from NPPC, prompted the Trump administration to rescind it. (EPA recently proposed a regulation to repeal the WOTUS rule and to work with stakeholders on a rule that’s workable and protects waterways.) The agencies will hold 10 teleconferences, nine of them for specific sectors, including agriculture; one will be open to the public. The teleconferences will be held throughout the fall on Tuesdays from 1-3 p.m. Eastern time, beginning Sept. 19; the agriculture teleconference is Oct. 17. Additionally, the agencies will hold an in-person meeting with small entities on Oct. 23 and will accept written recommendations from the public. (Written recommendations must be received on or before Nov. 28.) The announcement will be published Monday in the Federal Register and will be available then online at https://federalregister.gov/d/2017-18214.

NPPC MEMBERS TO LOBBY CONGRESS ON PORK INDUSTRY ISSUES

NPPC will host its fall Legislative Action Conference in Washington, D.C., Sept. 13-14. The biannual fly-in draws from around the country more than 125 pork producers, including 15 who will be participating in NPPC’s Pork Leadership Institute, a grassroots leadership development program. Producers will lobby congressional lawmakers on issues of importance to the U.S. pork industry, including asking them to urge the Trump administration to pursue bilateral trade agreements, to rescind regulations detrimental to agriculture and to support establishing and funding a Foot-and-Mouth Disease vaccine bank.

ON-FARM SWINE WELFARE AUDITOR COURSE SET

The Professional Animal Auditor Certification Organization (PAACO) will hold a course for potential swine auditors at South Dakota State University’s Swine Education and Research Center Sept. 21-22. Registration ends Sept. 15. The certification course is designed to train potential swine farm auditors in using the National Pork Board’s Common Swine Industry Audit. For more information on the course or to register, contact Collette Kaster, PAACO executive director, at ckaster@animalauditor.org, or (402) 403-0104.

CONGRESS TO RESUME AFTER LABOR DAY

With Congress on a month-long break, NPPC’s Capital Update will be published on an as-needed basis until lawmakers return after Labor Day.