U.S. Undersecretary for Trade and Foreign Agricultural Affairs Ted McKinney said he wants nothing more than free, fair and reciprocal trade for the United States.
McKinney spoke at the 4th Annual Arizona Agribusiness Roundtable, Dec. 10, in Scottsdale, Arizona, and took attendees on a little spin around the globe, giving updates about varying degrees of several trade agreements.
“So let’s start with the positive. Korea,” McKinney said.
The U.S.-Korea Trade Agreement, or KORUS, agreement is settled. Both the United States and Korea signed it.
“Basically the food and aggies in this country and the food and aggies in that country said—no, leave us alone,” he said. “We like it pretty much as it is. Fine. Thank you very much.”
McKinney said there are several good things that come out of this agreement—U.S. produce can now get into Korean ports.
“My goodness, it’s difficult to get stuff in the ports, and I don’t know if it’s deliberate or if it’s not deliberate, but it’s just difficult,” McKinney said. “And some of the KORUS re-writes should, repeat should, enhance that.”
Next, he detailed United States-Mexico-Canada Agreement. Some might have questioned whether or not USMCA is a good thing for agriculture, and McKinney said, “Let me just tell you from what I think, a fairly honest observer, it’s a doggone good thing. It’s 25 years old. It needed to be redone. Now it’s true, most of ag said things are pretty well do no harm.”
McKinney thinks that for the most part there was no harm, but it was tough going. The U.S. got more dairy access to Canada—cheese, milk and other products. There were some “wheat problems” solved. If the same variety of wheat a mile into North Dakota is transferred across the border, it went from food grade to feed grade—with a difference in price.
“The same variety, both sides of the border—north was food grade south was feed grade,” McKinney said. “Not very free, fair and reciprocal. That is supposed to be fixed.”
Wine and distilled spirits also saw some help from USMCA.
“But truly most of the time that was spent negotiating—the ag issues are always the most difficult or always the last to negotiate in a free trade agreement, and so Canada only put on the table two days before President Trump’s deadline,” McKinney said. “That’s why it went long.”
Besides the help to wheat, dairy and distilled spirits, there was a new chapter opened up for biosciences and biotechnology.
“It’s never existed in a biotech free trade agreement, and it is largely a good one because Mexico, Canada and the us are aligned with things—GMOs and the new gene editing or crisper technologies and others that will undoubtedly come along,” McKinney said. “Brand new chapter.
The framework will be a template for chapters in the U.S. Trade Representative and what the U.S. Department of Agriculture will introduce to Japan and any other free trade agreement they’re pursuing.
“I cannot tell you how important that is,” he said. “We’re getting screwed on the biotech and biosciences trade issues around the world.”
Speaking of Japan, McKinney said, “We can’t get there fast enough.”
“It is significant that we close the USMCA agreement and discussions when we did. We had to, had to pivot to Japan and nobody was going to negotiate with us till they saw what the template was going to be like with USMCA.”
The Japanese wanted to see what USMCA looked like and the 90-day window was about to close. McKinney thinks more negotiating will take place in January and hopes it’s a much quicker process since there’s such good language in the USMCA and Trans-Pacific Partnership about agriculture.
“I don’t think it was ag that blew that,” he said. “So I’m hopeful we can get there sooner than later. It’s not going to be days or weeks, it’ll be months. But I hope it’s not more than a year.”
McKinney praised a stronger relationship the U.S. is building with Japan for high value beef, pork and soybeans.
“They love our products, we have to get there,” McKinney said.
He could have spent hours talking about China, but boiled it down. He’s very optimistic about what came out of Buenos Aries negotiations with China, but at the same time cautious.
“We have seen this chapter and verse time and time and time again,” he said. “Understand the folks at the ministry of ag and rural development in China are friends. It’s a good relationship. China has visions to be an economic dominator of the world.”
Biotech is one example. Grains with biotech traits haven’t been admitted for Chinese approval for some time, 54 months. The longest time was 85 months ago.
“Let me interpret folks. This is deliberate. They’re not studying science,” McKinney said. “They’re trying to do basically in 15 years what we did since the 1930s and 1940s with the adoption of hybrid seed corn.”
“The withdrawal is deliberate,” McKinney said, especially since “we have most of the world approving our product. This has got to be fixed.”
McKinney sees the turmoil with the negotiation process, and believes it is all working. We just need to be patient.
“If you wondered if we’re making progress, it’s slow,” he said. “You’ll never read about it in the newspaper. Trust me. Never going to read it. In many cases it’s working.”
Trade negotiations are often uncomfortable, but things take time. McKinney believes they’re doing it in a “relatively civil, respectful, diplomatic manner.
“I hope we get an end to this. I do not think this is going to go for months and months,” McKinney said. “I hope that we can get those tariffs off of Mexico and Canada.”
McKinney and others expected that to happen after USMCA was finished, but a lot of work remains for the White House and others to get that fixed, reduced or re-worked.
“We can’t just support steel and aluminum and trade off ag,” McKinney said. “You can’t do that.”
McKinney said there is something about short-term gain, and trade officials are working 24/7 to give U.S. products somewhere to go.
“We really are trying to get new additional market access,” McKinney said. “We’re trying to double down. Some of our best staff is in those countries, as well. We’re going to diversify and we’ve all ready begun.”
Kylene Scott can be reached at 620-227-1804 or [email protected].
