Trade Speakers Touched on Factors that can Enhance, Block Exports

Speakers at the eighth annual Governor’s Conference on Agricultural Trade highlighted agreements that could boost agriculture and forestry exports and animal health issues that can hinder them.

The conference was held March 7 and 8.

Ambassador Darci Vetter, chief agricultural negotiator in the Office of the U.S. Trade Representative, outlined benefits of U.S. participation in the Trans-Pacific Partnership.

The TPP is an agreement among the U.S. and Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Its implementation has been a goal of the Obama administration.

Vetter said the TPP will foster “unprecedented access to the region that will support two-thirds of the world’s middle class by 2030.” That’s important from an agricultural standpoint, she noted, because “when people enter the middle class they change the way they eat,” purchasing more fresh fruits and vegetables and more proteins.

Vetter said TPP participation will afford U.S. exporters “trade liberalization for every agricultural product, without exception.” For example, she said, Brunei, Japan, Malaysia, New Zealand and Vietnam would eliminate duties on 93 percent of all ag tariff lines, and 70 percent of those tariff lines would be eliminated immediately.

The American Farm Bureau Federation has estimated that net exports of U.S. soybeans and grain products will increase in value by $297 million when the TPP is fully implemented, and net dairy exports will increase by $131 million.

The agreement also stands to raise trade standards related to sanitary and phytosanitary issues, intellectual property, labor and human rights and environmental issues.

Failure by Congress to approve TPP participation presents a significant risk, Vetter said. “The rest of the world is continuing to move. These countries will continue to negotiate preferential agreements with each other.”

Ray Owens, senior economist and research advisor for the Federal Reserve Bank of Richmond, called the U.S. economy “relatively solid” but noted that in election-year rhetoric “we continually hear there’s something really broken in our economy.”

All things considered, “we at the Federal Reserve think this is about as fast as the economy can grow,” he said. The Richmond Fed serves the Fifth Federal Reserve District, which consists of Maryland, the District of Columbia, Virginia, North Carolina, South Carolina and most of West Virginia.

If globalization yields rising incomes, and if global economic policy is well-run, Owens said, the U.S. stands to benefit. But it is important to adapt quickly to rapid international developments. “We have to keep a much sharper eye, be much more agile, be quicker on our feet.”

Dr. John Clifford, deputy administrator and chief veterinary officer for the U.S. Department of Agriculture’s Animal & Plant Health Inspection Service, told conference participants that trade interruptions related to animal health issues can be lasting ones.

In 2003, he reminded them, officials confirmed a single case of bovine spongiform encephalopathy in a cow of Canadian origin that was in the United States. It resulted in numerous bans on U.S. beef, and “we are still, today, trying to gain some of those markets back,” Clifford said.

An outbreak in 2014 and 2015 of avian influenza in commercial turkey flocks in the Midwest had a similar result on poultry and egg exports. Jim Sumner, president of the USA Poultry and Egg Export Council, said the outbreak and unrelated economic conditions formed the “perfect storm” for exports.

“About 18 countries banned U.S. poultry,” he said. “Fortunately some of those have lifted their restrictions,” though challenges still remain in major markets like China, South Korea, Mexico and Russia.


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