Tag Archives: Trade

Ag Secretary Sonny Perdue is hoping that a third round of trade aid payments to farmers will be unnecessary in 2020 because of a new trade deal with China.

The Hagstrom Report says Perdue spoke with reporters last week shortly after returning from a “successful” trade mission to Mexico. Farmers “would rather have trade than aid,” Perdue says. At the same time, he did say the second round of 2019 trade aid is approved and will be heading to farmers soon. “We have just gotten authorization on the second tranche,” he said. “I expect payments to be out to farmers by late November or early December.” The U.S.-Mexico-Canada Trade Agreement was one of the big topics of conversation on the trip to Mexico.

Perdue says Mexican officials are hoping Congress will sign off on the agreement as soon as possible. “They’ve done their work, as you know, and they’re anxious for us to complete our task as well,” Perdue says. Immigration was another topic of conversation with Mexican officials. Perdue is hopeful that the Mexican government will begin a program to “pre-certify” workers southeast Mexico for the H-2A Program. Southeast Mexico is one of the most poverty-stricken areas of the country.

Vice President Mike Pence again called on the House of Representatives to bring the U.S.-Mexico-Canada Agreement to a vote. Speaking at an event in Virginia over the weekend, Pence says Democrats in the House “are spending all their time on endless investigations and a partisan impeachment.”

Pence told the event, “The time has come for your congressmen and every Democrat from Virginia to put politics aside and pass USMCA.” House Democrats maintain the impeachment process will not impede progress on the trade agreement. House Speaker Nancy Pelosi last week hinted she was optimistic they could reach a deal with the White House.

Few days remain on the legislative calendar to pass the agreement this year, and the House is on recess this week. Pelosi told reporters last week, “hopefully we can do it sooner,” but she wouldn’t rule out the process stretching into next year. The U.S., Canada and Mexico agreed to the accord now more than a year ago, and Mexico ratified the agreement this summer.

Thailand plans to seek talks with the United States on a decision to end preferential trade privileges on a range of Thai exports including seafood, officials said Monday.

Keerati Rushchano, acting director-general of the Commerce Ministry’s Foreign Trade Department, said his office has been warning exporters that the U.S. might withdraw the duty-free status for some products and had been advised by the U.S. to expect it.

The Office of the United States Trade Representative announced Friday it was suspending $1.3 billion in trade preferences for Thailand under the Generalized System of Preferences, or GSP, because of its failure to adequately protect worker rights.

Keerati said Thailand will try to negotiate the issue before it takes effect in April, as did Thai Prime Minister Prayuth Chan-ocha in separate remarks Monday. The U.S. Trade Representative’s announcement said the GSP eligibility was open to periodic review.

Thailand has faced complaints for years over labor issues, particularly in its fisheries industry.

“Despite six years of engagement, Thailand has yet to take steps to provide internationally recognized worker rights in a number of important areas identified in a 2015 petition from the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), such as providing protections for freedom of association and collective bargaining,” said the U.S. announcement.

It said the list of products to be excluded from GSP focused on those “for which the United States is a relatively important market for Thailand, but where Thailand accounts for a relatively small share of U.S. imports” and “due to longstanding worker rights issues in the seafood and shipping industries, GSP eligibility will be revoked for all seafood products from Thailand.”

The U.S. move drew special attention because it came shortly after Thailand announced a ban on the herbicide glyphosate, which is sold under the brand name Roundup by Monsanto, a U.S. subsidiary of German pharmaceutical giant Bayer.

Leaked letters to the Thai government from the U.S. Department of Agriculture and its representative at the U.S. Embassy urged a delay on the ban, saying the health hazards of the farming chemical had been exaggerated and the ban could affect the export of certain farm products from the US to Thailand.

The documents, whose provenance was not denied by the U.S. Embassy, were leaked just ahead of the U.S. announcement on GSP, fueling suspicion that the trade representative’s actions was retaliation. The suspicions were highlighted on Thai nationalist accounts on social media.

However, Thai and U.S. officials both denied any connection.

A statement from the U.S. Embassy, addressing concerns that reasons besides labor rights were behind the GSP move, noted that the GSP review of worker rights had been under way for six years.”

“Despite the six years of engagement, Thailand has yet to take steps to afford internationally recognized worker rights in a number of important areas identified in a 2013 petition from the AFL-CIO, such as providing protections for freedom of association and collective bargaining,” it said.

It expressed hope “that in announcing this action, we will incentivize Thailand to move forward with legislation and administrative enforcement actions related to worker rights that could lead to a reversal of the GSP action.”00

The U.S. and China are on track to sign the phase one trade agreement next month. President Donald Trump this week stated the negotiations are running “ahead of schedule.” The South China Morning Post reports Trump and Chinese President Xi Jinping are set for a November 17 meeting in Chile to sign the interim trade deal.

Trump says the agreement would “take care of the farmers,” among other things, including banking provisions. A spokesperson from China’s Foreign Affairs Ministry confirmed the progress, saying, “the two sides made substantial progress” in recent talks. Top-level negotiators met over the phone last Friday and will again very soon.

The agreement includes an estimated $40-$50 billion of agricultural purchases by China over a two-year period, with $20 billion possible the first year. Market analysts say agricultural trade with China appears to be starting to normalize, ahead of the agreement.

In 2017, before the trade war began, the U.S. shipped $19.5 billion worth of agricultural products to China. However, the trade war cut those exports in half.

U.S. Commerce Secretary Wilbur Ross Monday suggested the phase one agreement with China doesn’t have to be ready to sign next month. Speaking on Fox Business Network, Ross says, “It has to be the right deal, and it doesn’t have to be in November.”

President Donald Trump has indicated the deal would be ready to sign at the November APEC summit. The agreement includes the intent by China to purchase up to $50 billion worth of U.S. agricultural goods over the next two years. However, China has said it won’t move forward with significant purchases unless Trump agrees to cancel a planned round of tariff increases set for December.

The comments from Ross seem to suggest the phase one agreement may not be as solid as previously portrayed. Agriculture is described best as cautiously optimistic that the phase one agreement can be completed, and that China massively increases its purchases of U.S. farm products. However, China recently purchased soybeans from Brazil, an uncharacteristic move for this time of year.

A government official from Mexico says global trade uncertainty is another reason the U.S. and Canada should ratify the U.S.-Mexico-Canada Agreement. Mexico’s Finance Minister last week noted global trade was a common topic during the fall meetings of the International Monetary Fund and World Bank in Washington.

Arturo Herrera says that in a world that is “probably facing some uncertainties for a while,” USMCA is “going to help attract investments to the region,” according to Reuters. Herrera says the ongoing trade war between the U.S. and China, now 15 months long, is partly to blame for a sharp slowdown in global growth.

USCMA replaces the North American Free Trade Agreement and was ratified by Mexico this summer. The U.S. and Canada have yet to ratify the agreement, and some fear if Congress doesn’t act soon, the deal will be stalled by the 2020 elections.

Democrats in the House of Representatives are set to continue negotiations with the White House this week. However, Congress is running out of working days to pass the agreement this year.

French vintners are begging for government aid. Italian farmers are scrambling for new export markets. And American shoppers are about to face supermarket sticker shock on European products.

That’s because some $7.5 billion in U.S. tariffs on European food, wine and other goods took effect Friday, in response to illegal EU subsidies to planemaker Airbus.

The U.S. is also accused of illegal subsidies — to Boeing — and EU Trade Commissioner Cecilia Malmstrom threatened Friday to impose retaliatory tariffs on U.S. products. But she held out hope that negotiations could prevent a trade war escalation that would have global fallout.

Louis Moreau feels the sting of the Trump administration’s wine tariffs personally.

A sixth-generation Chablis producer in Burgundy, he cut his teeth in California, where he lived for 10 years before taking over the family business in 1998.

Since then, he’s worked to expand his American business, traveling to the U.S. three times a year to promote his top-quality white wines. Around 8% of his exports, or roughly 17,000 bottles, go to the U.S. each year.

“Where is the logic? It’s not fair,” Moreau told The Associated Press. He said he and other Chablis producers feel they’re being held hostage to an unrelated political dispute.

“We have good relations with our U.S. consumers,” he said.

“This whole thing — it’s a mess in a way — is really putting some stress, some tension on this relationship.”

The U.S. is the No. 1 market for French wine exports, and Moreau estimates the tariffs could cost him 80,000 euros ($90,000) in revenue over the next six months, a 20% loss of his U.S. business.

French wine exporters group FEVS asked for government help to compensate for an expected drop in sales as American consumers shun French varieties for cheaper wines from the U.S. or elsewhere.

And it’s not just France.

At Rome’s Testaccio market, which is packed with wheels of Parmesan and strung with cured meats, food shop owner Enzo Paoloantoni urged Italian politicians to fight harder to protect Italy’s economic interests.

Paoloantoni joked that “Trump was very nice to help Italians” by slapping tariffs on world-renowned delicacies that Italy prides itself on.

Italy’s main farm lobby has forecast a 20% drop in sales of agricultural products that represent half a billion euros in export value, and called on the government to help promote Italian goods in other export markets instead.

German Riesling white wine is among the many products that’s about to get more expensive for American shoppers. Germany’s government isn’t happy, but is staying prudent for now.

“We regret that it’s come to the imposition of tariffs by the U.S., because the U.S. is of course harming itself, too, in the end,” Economy Ministry spokeswoman Beate Baron told reporters in Berlin. “Higher tariffs will weigh on the U.S. economy and U.S. consumers.”

The tariffs come at a particularly bad time for French winemakers, who also feel threatened by Brexit, a contracting global economy, and a changing climate that is altering harvest patterns.

Wine association representatives have been meeting with French government officials to try to find ways to defer paying the tariffs, Moreau said.

On Friday, as the new rules took effect, workers in Moreau’s warehouse packaged more than 1,000 bottles for export — to Canada.

The Department of Agriculture is moving forward with select trade aid provision in buying U.S. lamb products. USDA’s Agricultural Marketing Service recently announced the food purchase of up to $17 million of American lamb for distribution to various food nutrition assistance programs.

The products include, but are not limited to, boneless lamb leg roasts and boneless lamb shoulder roasts. The Chief Economist’s office determined the amount to be spent on American lamb. The $17 million allotted is a larger amount than USDA has spent in previous lamb buys.

The American Sheep Industry Association is helping facilitate the program between USDA and sheep producers. Meanwhile, the broader trade aid effort, including payments to farmers, remains unclear. USDA had planned another payment to producers this fall, with a final payment early next year.

However, a breakthrough in talks with China, and the Japan agreement signed last week, could mean the payments are no longer needed in the eyes of the Trump administration and farmers.

TRUMP: “The deal I just made with China is, by far, the greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country.” — tweet Saturday.

TRUMP: “Start thinking about getting bigger tractors!” — tweet Saturday.

THE FACTS: Not so fast. No final trade agreement has been reached.

It’s true that U.S. and China declared a temporary truce in their 15-month trade war. As part of a cease-fire deal announced Friday, China agreed to buy up to $50 billion in U.S. farm products, while the Trump administration said it would suspend a tariff increase on $250 billion worth of Chinese imports that was set to take effect Tuesday.

However, negotiators reached their tentative agreement only in principle. No documents have been signed. A final deal could still fall through, though Trump told reporters Friday he didn’t think that would happen.

Many of the details remained to be worked out. Some of the thorniest issues — such as U.S. allegations that China forces foreign companies to hand over trade secrets — were dealt with only partially, or not at all, and will require further talks.

“The president is acting as if a lot of Chinese concessions have been nailed down, and they just haven’t,” said Derek Scissors, a China specialist at the conservative American Enterprise Institute.

The administration still has in place tariffs on more than $360 billion worth of Chinese imports. Beijing has lashed back by taxing about $120 billion in U.S. goods, focusing on soybeans and other agricultural products.

Meanwhile, the threat of escalation still hangs over the two countries. Trump has yet to drop plans to impose tariffs that are set to take effect Dec. 15 on an additional $160 billion in Chinese products — a move that would extend the sanctions to just about everything China ships to the United States.

China wants further talks as soon as the end of October to hammer out the details of the “phase one” trade deal touted by Donald Trump before Xi Jinping agrees to sign it, according to people familiar with the matter, Bloomberg News reports.

Beijing may send a delegation led by Vice Premier Liu He, China’s top negotiator, to finalize a written deal that could be signed by the presidents at the Asia-Pacific Economic Cooperation summit next month in Chile, one of the people said. Another person said China wants Trump to also scrap a planned tariff hike in December in addition to the hike scheduled for this week, something the administration hasn’t yet endorsed. The people asked not to be named discussing the private negotiations.