Biden administration plays long game for agriculture and trade
Ambassador Katherine Tai, the U.S. trade representative, said during an Iowa visit Aug. 18, 2022, that the federal government is seeking long-term answers to the country’s trade issues. (Photo by Jared Strong/Iowa Capital Dispatch)
WOODWARD, Iowa — The United States could take international trade actions that might have an immediate impact on the operating costs for farmers and the markets available for their crops, but the Biden administration has opted for a longer-term strategy, one of the nation’s top emissaries said Thursday during a trip to a central Iowa farm.
“When we are building toward more of a resilient economy and global economy, there’s a transition that we need to go through,” said Katherine Tai, the U.S. trade representative. “We can’t just throw the switch and change the course of 20, 30, 40 years of trade policy. … If we know where we’re trying to go, we have to enable the changes that take time to be made.”
Her remarks were part of a visit to the Spellman Family Farm south of Woodward, in which Tai, U.S. Secretary of Agriculture Tom Vilsack and U.S. Rep. Cindy Axne, D-Iowa, met with representatives from more than a dozen agricultural groups.
The trio were pressed by some of the representatives to cut tariffs on imported fertilizers, require more-accurate labeling that identifies the true origin of processed beef and embrace free trade agreements to expand the markets available for Iowa agricultural exports.
“Exports literally are the difference between profit or not on all of our farms,” said Craig Floss, chief executive of the Iowa Corn Growers Association, noting that about a quarter of the state’s corn is used in products that are exported.
But Tai cautioned that trade agreements must be balanced to ensure equity among different sectors of the country’s economy.
“Free trade and globalization has definitely grown with time, and some sectors have won more than other sectors,” Tai said, and later added: “It’s not just free trade because we have to look at fair trade.”
But she touted some trade advances in the past year that have been a boon to meat and potato producers. India allowed imports of U.S. pork for the first time, Vietnam reduced its tariff on U.S. pork, Japan increased its imports of beef and Mexico ended a decades-long ban on U.S. fresh potatoes.
Will Mexico end imports of genetically modified corn?
There is uncertainty over whether Mexico will end imports of genetically modified U.S. corn in 2024 as decreed nearly two years ago by its populist president, Andrés Manuel López Obrador. Vilsack downplayed that potential cessation and called it a product of politics and pride in the country’s white corn.
“For him it’s about Mexican pride; it’s about Mexican heritage,” Vilsack said. “It’s about protecting something that is unique to them that is literally part of their identity, so I get that.”
However, Mexico is a significant importer of U.S. corn, and such a move could be detrimental to both countries. Vilsack said he warned López Obrador about higher food prices that would result in Mexico.
“That made an impression on him, because I don’t think he had thought about that,” Vilsack said.
Beef labeling decision is pending
On beef labeling, Vilsack said he is awaiting the results of a survey to determine whether consumers know what “Product of the USA” means when meat is labeled that way, and whether it affects their purchasing choices.
The issue been a longstanding point of contention for domestic cattle producers because beef and pork that isn’t raised in the United States has been allowed carry the label if it was processed in the country. That practice was curtailed by an executive order last year, but livestock producers have pushed for mandatory labeling that identifies the country of origin of the meat.
“If there’s going to be a label regarding source of origin, it needs to be verified by a third party,” said Cora Fox, director of government relations for the Iowa Cattlemen’s Association.
Tai resists calls to end fertilizer tariffs
And Tai resisted calls to end tariffs on certain fertilizers to help alleviate the high operating costs for farmers right now, saying they can be an important tool to “balance the playing field” of trade. Ending tariffs has been a common request from certain agricultural groups and Midwest Republicans.
“The existing tariffs on fertilizer are nothing more than a tax on our farmers,” U.S. Sen. Joni Ernst, R-Iowa, said in a press release early Thursday in anticipation of the trade discussion near Woodward. “They hinder their ability to afford critical nutrients needed to meet the growing demand.”
At the heart of that request is an import tariff on Moroccan phosphate fertilizer that was imposed at the behest of the largest domestic producer of the fertilizer, which claimed the foreign product was unfairly subsidized. It’s unclear how much an elimination of that 20% tariff might affect prices, but some farmers are eager for any reduction.
“Costs on my farm are up by about 325%,” said Lance Lillibridge, president of the Iowa Corn Growers Association. “It’s getting to be unbearable.”
Vilsack said the Biden administration’s focus is boosting domestic fertilizer production to help shield the country’s farmers from supply shortages and high prices that have followed Russia’s invasion of Ukraine earlier this year. He said announcements are forthcoming about infrastructure investments.
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