TRADE UPDATE Maria C. Zieba Director of International Affairs U.S. - - PDF document

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TRADE UPDATE

Maria C. Zieba

Director of International Affairs

U.S. Free Trade Agreements Lead to Increased Opportunities for Pork Exports

Data Source: USDA FAS

Canada FTA NAFTA (Mexico) WTO Uruguay Round (Japan) China WTO Accession Singapore FTA Chile FTA Australia FTA DR-CAFTA Peru FTA Korea FTA Colombia FTA Panama FTA

225,000 450,000 675,000 900,000 1,125,000 1,350,000 1,575,000 1,800,000 2,025,000 2,250,000 2,475,000 2,700,000 Metric Tons

Annual U.S. Pork Exports, 1989-2017

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Data Source: USDA-FAS Global Agricultural Trade System (GATS) CY Basis $0 $30 $60 $90 $120 $150 1946 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 Billion U.S.

General Agreement on Tariffs and Trade (GATT) Kennedy Round Of GATT Trade Act of 1974 Tokyo Round

• f GATT

Japan: Beef and Citrus Trade Act of 1988 NAFTA Uruguay Round

• f GATT

Fast Track China in WTO Doha Development Round Trade Promotion Authority CAFTA-DR Korea, Colombia, Panama Trade Agreements

U.S. Agricultural Exports U.S. Agricultural Imports

$115 billion $135 billion

Trade Agreements Create Opportunities for U.S. Agriculture

NAFTA Partners Remain Critical to U.S. Pork Exports

ROW 19% China/Hong Kong 14% Japan 16% South Korea 10% Mexico 32% Canada 9% NAFTA 41%

U.S. Pork Exports by Destination, 2018

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TRADE WORKS

▪ Promotes rural prosperity ▪ Exports added over $51 to price of each hog marketed ▪ 110,000+ U.S. jobs are dependent on pork exports

2018 Trade Actions

▪ Many trade investigations initiated:

– Section 201: Washers, Solar Panels – Section 232: Steel, Aluminum, Cars, Trucks, Auto Parts, Titanium Sponges – Section 301: China

▪ Retaliation began in 2018, continues and could worsen this year:

– China (pork already on two retaliation lists) – Mexico (pork already on retaliation list) – Other countries?

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Export Value to Mexico Feeling Impact of Retaliatory Tariffs

Data Source: USDA FAS

64% 7%

• 15%

31% 3% 11%

• 14%
• 10%
• 19%
• 19%
• 26%

2% 52% 4%

• 1%

31%

• 1%

0% 15% 4% 44%

• 4%
• 19%
• 11%

1% $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 South Korea Canada China/HK Mexico Japan Million USD

U.S. Export Value to Key Markets YTD, 2014-2018

2014 2015 2016 2017 2018

*Percentages indicate change from previous year

USMCA

▪ Mexico and Canada are vital markets

– Mexico #2 export market - $1.3B in 2018 – Canada #4 export market - $764M in 2018 – Over 19,000 U.S. jobs (combined)

Withdrawing from NAFTA without a replacement would cost the industry $1.5 billion or $12 per animal

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Japan Deal Needed ASAP

▪ Bilateral Negotiations

– #1 Export Market

• $1.6 billion pork exports

– Additional competition from EU and CPTPP

Must Have Access to New Markets

▪ Bilateral Negotiations Need to Begin:

– South East Asia – UK: FULL market access – EU: Ag MUST be included. FULL market access

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Working on New Markets…

▪ Bilateral pork trade issues examples:

– Australia – Brazil – India – Indonesia – Nigeria – Singapore – South Africa – Taiwan – Thailand – Vietnam

African Swine Fever

▪ Disease only affects pigs; not a health risk for people or a food safety risk ▪ Spreading throughout Asia and Northern Europe ▪ Imports/Exports ▪ What are we doing to reduce the risk?

– Working with producers – Working with the USDA on safeguards against contaminated ag imports – Response planning – Research on feed testing – More beagles – U.S. customs on border biosecurity coordination – Development of global network of swine vets, producers, government officials to monitor globally, share best practices, etc. (along with NPB, AASV, SHIC)

▪ Best defense is prevention

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Other NPPC Priorities:

Gene Editing

▪ Accelerates genetic improvements ▪ Allows for simple changes in a pig’s native genetic structure without introducing genes from another species ▪ Move regulatory oversight of gene editing in animals from the FDA to the USDA’s Animal and Plant Health Inspection Service (APHIS) ▪ Regulation of gene editing in animals by the FDA as an “animal drug” is not appropriate or practicable

– Oversight at FDA will cede this critical technology to competing nations

▪ Innovation is key to success of industry

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California Proposition 12

▪ A ballot initiative banning the sale of pork from hogs born to sows raised – anywhere in the U.S. - in gestation stalls

– Defined as less than 24 sq. ft.

▪ Approved by California voters in November 2018 ▪ Effective Jan. 1, 2022 ▪ Next step: CA rule-making process ▪ Massachusetts passed a similar initiative in 2016

Farm Bill Implementation

▪ Vaccines exist today to help mitigate damage ▪ Farm Bill provided mandatory funding

– $120 million over first 4 years, $30 million in 5th year – State block grants, NAHLN, vaccine bank

▪ USDA must work to quickly secure FMD vaccine to safeguard rural economies

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Thank You!

Maria C. Zieba ziebam@nppc.org