Agriculture Export Problems Raised With USTR

The day after President Donald Trump officially launched his re-election campaign, moderate Democrat Rep. Ron Kind warned the administration's top trade official that the China trade war is making voters in his home state of Wisconsin lose patience. Trump won Kind's district by 4 percentage points, and narrowly won Wisconsin in the Electoral College.

"We’ve lost over 50 percent of our exports going into China in the last year alone," Kind said, referring to Wisconsin's dairy industry. He noted that the number of dairy farm bankruptcies has climbed to three per day, and said, "I’m not saying the trade war has everything to do with it," but that retaliation on dairy exports is a contributor.

U.S. Trade Representative Robert Lighthizer noted during his testimony June 19 before the House Ways and Means Committee that the issue he heard more about during NAFTA renegotiations from Congress than any other was Canadian subsidies of their dairy industry that affected global skim milk powder prices. Kind thanked him for getting that changed in the deal, but said that in resolving the trade war with China, "speed is of the essence."

"The president is hoping to carry Wisconsin next year. This is probably the worst way to do it," Kind said. "They are losing confidence with him."

Rep. Jason Smith, R-Mo., asked Lighthizer about China, too, and Lighthizer assured him that getting rid of China's retaliatory tariffs and Chinese promises to buy more commodities are at the top of the agenda. Smith said, "After promising to open the rice markets in 2001, the U.S. is yet to ship one kernel of rice to China. China is the largest importer of rice in the world." He asked if there is any sign that U.S. rice producers will get access to China, which they were promised almost 20 years ago. Lighthizer said that Chinese officials said in December they would buy U.S. rice and never followed through.

Chinese retaliation isn't the only way U.S. trade policy has hobbled American farmers, Lighthizer was told. Rep. Adrian Smith, R-Neb., said that signatories to the Trans-Pacific Partnership are beating out American livestock exporters in the Japanese market, and he'd like to know how U.S.-Japan talks are going. The U.S. withdrew from the TPP on Trump's third day in office.

Lighthizer replied that in every single meeting, Trump brings up farmers, "and I meet with him a lot." Lighthizer said that while Japan has pretty high tariffs on agriculture imports, "we have a fair amount of access" in beef and some other areas.

In terms of a Japan trade bilateral agreement, he said, the USTR staff and Japanese trade negotiators have been meeting more or less continuously. He said he met with the Japanese lead negotiator last week, and expects to have another meeting next week on the sidelines of the G-20 summit.

"We understand the nature of this problem and we have to resolve it, because if we don't these farmers are going to lose that market because of nothing they did ... and they may never get it back. The Japanese understand completely our position," he said. "There’s an enormous amount of urgency."