If there’s one thing U.S. agriculture needs to survive, it is export markets. But if there’s one issue most troubling to those in agriculture with the election of Donald Trump, it is how he plans to interact with our major trading partners.
So it’s no surprise agricultural groups are making their voices heard about the importance of agricultural trade and need for enforcement of existing trade agreements as well as work to open up new markets. Potential trade disputes with China and Mexico are of particular concern in agriculture, and could devastate U.S. farmer income.
“As the Trump Administration assembles its team and policies, U.S. agricultural trade interests must be maintained, not only in existing markets but by expanding access to new markets,” according to a letter from a coalition of 16 groups.
Existing markets include China, Canada, and Mexico— U.S. farmers’ first, second, and third largest foreign customers. U.S. agricultural exports in FY-2016 were nearly $27 billion to China, over $24 billion to Canada, and nearly $19 billion to Mexico. “Disrupting U.S. agricultural exports to these nations would have devastating consequences for our farmers and the many American processing and transportation industries and workers supported by these exports,” the producer groups write.
"Exports account for over 70% of U.S. production of tree nuts and cotton, over 60% of soybeans, and over 50% of rice and wheat," the letter noted. "Positive farm income throughout America would not be possible without access to foreign markets, trade promotion, and trade agreements."
President-Elect Donald Trump nominated earlier this week Robert Lighthizer as the U.S. Trade Representative (USTR). “This nomination completes a triumvirate of officials who are seen as key power centers in the new administration's emerging trade policy,” said Bob Cumming, senior vice president at USA Rice.
Lighthizer has had a long and distinguished career in trade, working in the White House, Senate and private sector to assure favorable trading conditions for American goods and services. Lighthizer was deputy USTR in the Reagan administration and has led the international trade law practice at Skadden, Arps Slate, Meagher.
When serving as deputy United States Trade Representative, Lighthizer played a major role in developing trade policy for the Reagan Administration and negotiating roughly two dozen bilateral international agreements on a variety of topics from steel to grain. “These agreements were uniformly tough and frequently resulted in significant reductions in the shipment of unfairly traded imports into the United States,” the Trump Transition team said in a statement.
The New York Times shared that although Reagan is often remembered as an advocate for free trade, in the early days of his administration he also imposed a quota on Japanese auto imports. “It was the first in a long series of measures aimed at putting pressure on the nation that was then regarded, like China in recent years, as a threat to American prosperity.”
Cummings noted, “Lighthizer will likely increase the focus at USTR on enforcement of existing trade agreements.”
Cummings noted two other Trump appointees - Wilbur Ross as Commerce Secretary and Peter Navarro as chair of a new National Trade Council in the White House - are expected to play key roles in formulating U.S. trade policy. “Press reports and statements from the transition team don't answer the question of ‘Who's on first?’ so there will likely be some uncertainty as the new administration takes over,” Cummings added.
Many of Trump’s trade advisers, including Lighthizer, share the view that the United States in recent decades “prioritized the ideal of free trade over its own self-interest.”
National Milk Producers Federation President and CEO Jim Mulhern noted that farm groups must continue to emphasize that “the health of U.S. agriculture depends on our ability to sell our products outside of the United States. The growth of America’s dairy sector is directly tied to our ability to export. We have a positive trade balance in agriculture, and don’t want to see those hard-earned export markets eroded.”
Following the news of Lighthizer’s nomination, a joint statement from Mulhern and Matt McKnight, senior vice president of market access, regulatory and industry affairs for U.S. Dairy Export Council, his experiences at USTR and chief of staff for the Senate Finance Committee and his direct private sector engagement in enforcing trade rules will “serve him well in forging a path forward on trade policy that will benefit this country.”
The dairy groups noted that the U.S. dairy industry has seen the good and bad from trade agreements. “Our NAFTA partners epitomize both sides of that story: Our dairy agreement with Mexico has created an export market worth well over $1 billion a year, while on the other side of the border Canada has at every opportunity decided to flout its dairy trade commitments to the U.S.,” Mulhern and McKnight said.
Agriculture will have to continue to keep beating the drum of the importance U.S. agricultural trade plays in U.S. prosperity. If you want a quick primer on U.S. agricultural trade, be sure to check this out from the University of Illinois.
“Throughout the campaign, Mr. Trump and Gov. Pence committed to having farmer voices at the table when decisions are made that affect our industry. Nowhere is the potential effect more serious than in our trading relationships and as such we look forward to partnering with the Trump Administration on these issues,” said Illinois soybean and corn farmer Ron Moore, who serves as American Soybean Association’s president.