Selling U.S. goods and services around the world creates and maintains good jobs at home, helps small businesses, expands consumer choices, and improves American competitiveness. Ninety-five percent of the world’s consumers live outside our borders. International trade and the relationships that go with it make our world a safer, more stable place. Fewer barriers to U.S. agriculture exports allow us to deliver more food into the hands of people who need it.
Trade is vital to the success of our nation’s farmers. Foreign demand for U.S. farm goods plays a huge role in farm income. Farm exports make up a large portion of farmers’ income. In fact, more than 25 percent of all U.S. ag production ultimately goes to markets outside our borders. Currently, the success of agricultural trade is at risk. Retaliatory tariffs, lingering trade negotiations and farm income being at a decade low threaten U.S. agriculture’s trade surplus.
U.S. farmers and ranchers export more by value than farmers in any other country. The U.S. has a trade surplus in agriculture. In 2017, we exported $140 billion in farm products which is $21 billion more than we bought. Agricultural trade is successful because of trade agreements that have reduced barriers to our exports. In 2018, the top five export markets for the U.S. were – in order – Canada, Mexico, European Union, Japan and China, while Pennsylvania’s were Canada, European Union, Mexico, China, and the Philippines. American agriculture nearly always wins when trade agreements remove barriers to our exports, since we impose very few compared to other nations.
Highlighted concerns include:
- USMCA – As of 2018, Canada and Mexico were two of Pennsylvania’s top agricultural trade partners. Under NAFTA, ag exports from the U.S. to Canada and Mexico increased from $8.9 billion in 1993 to $39 billion in 2017. The new USMCA includes several important gains in trade for agriculture, including increased opportunities for U.S. dairy products in Canada, and Canada treating wheat imports in the same manner as domestic wheat for grading and pricing.
- Retaliatory Tariffs – Tariffs targeting China, Canada, Mexico and others have resulted in retaliation against U.S. agricultural exports by imposing tariffs and other import restrictions. American farmers are already facing low commodity prices and the “trade war” with China is hurting our farmers and rural communities. From 2017 to 2018, U.S. agricultural exports to China fell more than 50 percent, dropping to $9.1 billion. Farm Bureau appreciates the Administration’s trade mitigation package which will help some of our farmers most impacted by the tariffs, however, farmers need fair and open markets if we are going to see long-term recovery from the depressed farm economy and the ongoing trade war.
- U.S. - Japan Trade Negotiations – The U.S. and Japan have agreed to enter into negotiations toward a trade agreement. Japan is a top market for U.S. exports of wheat, corn, soybeans, beef and pork, but it also has many restrictive policies in place against U.S. agricultural products. Japan has said it will follow its agreement with the U.S. in the original Trans-Pacific Partnership. The negotiating objectives for the talks include the reduction and elimination of tariff and non-tariff barriers; also included are added enforcement mechanisms for Sanitary/Phytosanitary regulations, disciplines for enacting science-based food safety standards and limits on the use of geographic indications in product labeling.
- U.S. - EU Trade Negotiations – The US and the European Union are beginning negotiations for a trade agreement. The EU is a top trading partner for both the U.S. and Pennsylvania. The EU has strongly resisted including agricultural issues in this negotiation. Farm Bureau strongly supports agriculture being included in the negotiation.
- Trade with Cuba – Continuing trade restrictions with Cuba, especially limitations on trade financing (such as no export credit), limit the potential growth in agricultural exports. Main exports from the U.S. to Cuba include chicken, pork and animal feeds. Cuba has not bought U.S. wheat since 2011, but buys from Canada and the European Union. Added costs of third-party banks and requiring that transactions are made in cash only make the U.S. less competitive in export sales. Additionally, USDA allows state checkoff funds to be used for research and promotion activities to help develop the Cuban market for U.S. agricultural products. Due to the embargo, federal funds for these activities through the Market Access Program (MAP) and the Foreign Market Development (FMD) Program cannot be used.
Farm Bureau asks Congress to support:
- Development of new markets for U.S. agricultural goods and to protect and advance U.S. agricultural interests around the world.
- The new USMCA agreement, and oppose any withdrawal from NAFTA until the USMCA is in place.
- Inclusion of agriculture in the U.S. - EU negotiations.
- Actions to increase market opportunities for U.S. farmers and ranchers in the Asia-Pacific region.
- Normalization of trade and travel relations with Cuba.
Farm Bureau asks for elimination of higher tariffs with China and Mexico – or any other country – and, instead support lower barriers to trade and open markets for the hard-working farmers across the country.