House Agriculture Committee Asks Agriculture Secretary for Reassurance on Free Trade
Republicans and Democrats on the House Agriculture Committee -- including the chairman -- asked Agriculture Secretary Sonny Perdue for reassurance that the administration will preserve trade agreements that are crucial to farm sales, during a Feb. 6 hearing on the rural economy. Perdue said he expects Mexico, Canada and the U.S. to reach an agreement on a modernized NAFTA by the end of the year, though not until after Mexico's presidential election. "I’m more hopeful than I have been," he told Rep. Jim Costa, D-Calif., who had noted Mexico buys 30 percent of his state's milk. Perdue said NAFTA has been positive for agriculture generally; all trade-related questions from the committee during the hearing were pro-free trade.
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President Donald Trump has softened some of his language on NAFTA, in January telling an interviewer at The Wall Street Journal: "I would rather be able to negotiate" than withdraw from the deal. "We’ve made a lot of headway. We’re moving along nicely." But Trump's earlier threats to blow up NAFTA have unnerved agricultural interests. "Uncertainty in the direction of trade has exacerbated the anxiety of farm and rural America because the U.S. farmer and rancher depends so much on access to global markets to make ends meet," Committee Chairman Michael Conaway, R-Texas, said as he opened the hearing. "On the trade front, the ball is naturally more in the administration’s court than it is ours. I appreciate the administration’s strong desire to strike better deals for the United States and to reduce if not eliminate our trade deficit." He said, however, there's deep concern that farmers' and ranchers' market access abroad could be jeopardized as a result of this administration's approach to agreements.
Rep. Roger Marshall, R-Kan., said the administration's decision to leave the Trans-Pacific Partnership is hurting the price of U.S. beef. He said that Japanese tariffs on U.S. beef mean that buyers there are going with Australian beef instead. "You’ve addressed NAFTA already. Japan is a huge market for our wheat and our beef," he told Perdue. "We’d like to get that Kansas beef over there." Perdue said the other 11 countries in the TPP were "very regretful" that the United States withdrew, even though they signed their own agreement based on the TPP. "I was very encouraged to hear our president talk at Davos over a potential interest in rejoining TPP," Perdue said. "I’m going to take the president’s word at that."
Tariffs the administration levied against Chinese solar panels may affect farmers' profits, too, Perdue said, because China said Feb. 5 that it is considering antidumping and countervailing duties on U.S. sorghum (see 1802060026). The cash price for the grain immediately dropped 25 percent, he said. That shows how dependent the agriculture sector is on trade. "No one is saying we should not take actions over bad actions from China and others regarding intellectual property," Perdue said, even if there is collateral damage to exports. "Agriculture typically is the point of the spear of retaliatory measures. Everyone in the administration is aware of that."
Perdue could not give a hopeful answer to every pro-trade question. Rep. Rick Crawford, R-Ark., said he'd like to see more products sold to Cuba. Perdue responded that while sales have grown, cash flow is a constraint. "They love the products and would love more of them -- it’s a matter of how they pay for them," he said. Crawford asked if the law could be changed to allow private financing of these sales. "The president’s comments on Cuba may make that problematic," Perdue said.