For the Week Ending December 13, 2019

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The U.S. administration has struck a mini trade deal with China, President Trump announced Friday morning. “We have agreed to a very large Phase One deal with China,” he tweeted. “They have agreed to many structural changes and massive purchases of agricultural product, energy and manufactured goods, plus much more,” he wrote. There are few products better positioned to slash the trade imbalance with China than pork. China is the world’s largest producer and consumer of pork, but African swine fever has reduced its pork production by 50 percent. The United States is able to supply large quantities of safe, high-quality pork at affordable prices. NPPC has been advocating for China to eliminate all tariffs on U.S. pork — both the 60 percent punitive tariff in retaliation for U.S. trade policy decisions as well as the 12 percent WTO/MFN tariff. Iowa State Economist Dermot Hayes estimates that if China eliminates tariffs, U.S. pork exports would grow to almost $25 billion annually, creating almost 200,000 new U.S. jobs, and reducing the trade deficit with China by six percent within ten years. While pork producers have welcomed the removal of Mexico’s 20 percent punitive tariffs on U.S. pork and a new trade deal with Japan that will generate new export opportunities, they continue to suffer financially. A robust deal on pork with China is needed. 

After months of negotiations between the administration, House Democrats, and the Mexican government, one of NPPC’s highest trade priorities moved closer to congressional ratification this week. On Tuesday, Mexico approved U.S. changes to the U.S.-Mexico-Canada (USMCA) trade agreement, paving the way for a House vote next week. Meantime, Senate Majority Leader Mitch McConnell (R-Ky.) has indicated a vote in that chamber isn’t likely until after the Senate votes on impeachment. NPPC is urging Congress to approve the trade agreement. “Mexico’s approval of USMCA changes proposed by the United States is welcome news for U.S. pork producers and all of American agriculture,” said NPPC President David Herring, a pork producer from Lillington, N.C. “Members of Congress can count on hearing, yet again, from pork producers as NPPC is unleashing a grassroots call to action.” 

The House approved legislation on Wednesday to address the severe labor shortage in U.S. agriculture. H.R. 4916, by original sponsors Reps. Zoe Lofgren (D-Calif.) and Dan Newhouse (R-Wash.), was approved 260-165. The measure creates a new “Certified Agricultural Worker” (CAW) program that grants legal status to workers with at least 180 days of agricultural employment over the last two years, establishes a capped H-2A program for employers seeking to bring in temporary workers to fill year-round needs and dedicates an additional 40,000 green cards per year for agricultural workers. The U.S. pork industry is suffering from a serious labor shortage both on farm and in packing plants. Without visa reform to support a sustainable workforce, production costs will increase, leading to higher food prices for consumers. While NPPC applauds the lawmakers for jumpstarting this critical conversation, it views the bill as an incomplete fix. Although NPPC fully supports opening the H-2A program to year-round labor, the bill unnecessarily caps the year-round visas at just 20,000.  A cap of the year-round program unfairly biases seasonal agricultural industries over hog and other livestock producers that need year-round workers. The measure further disadvantages pork producers by reserving half of the year-round H-2A visa for the dairy industry. Finally, the bill’s changes only apply to labor on farms and not in plants. NPPC continues to advocate for labor solutions that fully address U.S. pork’s needs.   

NPPC joined numerous agriculture groups this week in signing a letter in support of legislation recently introduced by Reps. Jimmy Panetta (D-Calif.) and Jackie Walorski (R-Ind.) that will help family-owned agricultural businesses. The bill would facilitate the transition of farms to the next generation by allowing more land to be appraised on its agricultural value rather than its development value for estate tax purposes. “The farming and ranching sector is dominated by family-owned businesses that in the best of financial times can struggle to survive the death of a family member and business partner,” explained the letter in support of H.R. 5259. “Estate taxes, especially if based on inflated land values, can add to the pressures that push a family to sell agricultural land and fragment businesses. The negative ramifications of these actions extend well beyond the harm caused to farm and ranch businesses, impacting the ancillary businesses and rural communities where agriculture is a primary economic driver. When this land is lost to development, agriculture loses its base for production forever,” wrote the groups in a letter sent Wednesday to the two lawmakers. 

UK Conservative Party Leader Boris Johnson was re-elected prime minister on Thursday in the country’s third national election in five years. The Conservatives had secured 364 of the 650 seats in the House of Parliament, ahead of the Labour Party’s 203 seats. The election win gives Johnson’s party a majority in the House of Commons and paves the way for Britain to leave the European Union next month. 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. 

Congressional negotiators announced Thursday a deal in principle to approve $1.3 trillion in federal spending for next year, likely averting a looming government shutdown. The preliminary agreement on 12 appropriations bills would keep the government running past Dec. 20. While main differences have been resolved, negotiations will continue in the coming days before releasing text of the agreement. The House is hoping to vote on appropriations early next week, giving the Senate enough time before the Dec. 20 funding deadline.