USDA official sees trade progress for ag

Farmers can expect benefits from pending trade agreements with China and North America as well as a recent agreement signed with Japan, the head of the USDA Foreign Agricultural Service (FAS) said at Land Expo 2020 in Des Moines, Iowa, Tuesday.

“All eyes this week are on Washington, D.C., with the expectation of the signing of the phase one agreement with China,” said Ken Isley, administrator of the FAS.

“That agreement will result in the sale of U.S. agricultural products of $40 billion to $50 billion over the next couple of years,” Isley said.

“More than that, it wasn’t just about sales,” he added. “It was about continued market access, because you can’t have sales if you don’t have the access to the markets and have the import regulatory requirements coming out of China that we can meet in terms of our products and that are based on science and that are based on data and that are reasonable.”

Isley hinted that the the U.S. beef industry will benefit from the market access part of the deal when he was asked about a delay in implementing another 2017 agreement with China to resume beef exports that had been cut off since 2003.

“Stay tuned to tomorrow. I told you I won’t give you a lot of details on China. Beef in China represents a great opportunity,” Isley said.

With African swine fever decimating China’s pork supply, the country is looking for other sources of protein, he said.

“A key thing today, the first shipment of poultry cleared Shanghai and will now be released into China,” he said.

Looking beyond China to other countries in the region, “the demand for beef in Asia has never been higher,” he added, so much that consumers are willing to buy it even when U.S. exports face 60% to 72% tariffs.

Our market share compared with Australia and other competitors in Japan and Korea is “extraordinarily high,” he said. “It boils down to taste. They like the taste of U.S. beef…”

Isley is optimistic about another trade agreement, the U.S.-Mexico-Canada Agreement (USMCA), which strengthens an export market worth $40 billion to American farmers.

The deal improves exports for U.S. dairy, wheat, and wine, he said.

After taking more than a year, the House of Representatives has approved the agreement.

“We fully expect the USMCA to make it through the Senate very quickly,” he said.

Another agreement – with Japan – took effect on January 1 of this year. It puts the U.S. on par with the Comprehensive and Progressive Agreement for Trans Pacific Partnership, which the U.S. withdrew from, Isley said.

It covers about 90% of products going into Japan tariff-free or in an enhanced position. The agreement will be phased in. It affects about $7.2 billion worth of U.S. products, he said.

Other agreements with the European Union will eventually result in $400 million in increased U.S. beef exports and in soybean exports for use in biofuels.

At the end of this month, the United Kingdom will exit from the EU. That nation, with the world’s fifth-largest economy, represents another opportunity, he said.

“Hopefully, we’ll get to an agreement that can be implemented in 2021, or shortly thereafter,” he said.