For The Week Ending Feb. 21, 2014
AGRICULTURE OUTLOOK FORUM FEATURES PORK INDUSTRY REPRESENTATIVES
The U.S. Department of Agriculture this week hosted the 90th Annual Agricultural Outlook Forum in Arlington, Va. The conference was well-attended by farmers and ranchers, government and agribusinesses and featured information on a variety of agricultural topics. Agriculture Secretary Tom Vilsack moderated two panels that focused on building domestic and international markets as well as other opportunities within agriculture. NPPC Chief Veterinarian Liz Wagstrom served as a panelist in a discussion focused on livestock and poultry. Wagstrom spoke about the effects of the porcine epidemic diarrhea virus (PEDv) on the U.S. swine herd and the development of resources for producers on bio-containment, biosecurity and other coordinated strategies to protect animal health. Iowa pork producer and veterinarian Dr. Craig Rowles served as a panelist on the U.S. Farmers & Ranchers Alliance Food Dialogues panel. Rowles spoke about pork production practices, transparency, sustainability and producers’ commitment to continuous improvement. As the only pork producer on the panel, Rowles said his goal is to bridge the food knowledge gap and bring transparency to what happens on the farm. Click here for more information about the panelists and to watch the Food Dialogues.
NPPC, VILSACK TAKE ISSUE WITH THE EU STAND ON AGRICULTURE TRADE
The United States and the European Union (EU) last week exchanged tariff offers in the Transatlantic Trade and Investment Partnership (TTIP) talks. While the EU is willing to eliminate tariffs on nearly all goods, it announced publicly it was unwilling to eliminate tariffs on beef, poultry and pork. Further, EU Trade Minister Karl De Gucht stated that the EU will not change its legislation regarding beef hormones and the feed additive ractopamine, which is used in beef and pork production. NPPC’s position is that tariffs should be eliminated on all products, including pork. “We will not accept anything other than the elimination of all tariffs on our products, and we are going to hold you to the WTO principle of equivalence,” said Nick Giordano, NPPC’s vice president and counsel for International Affairs in response to De Gucht’s comments. The elimination of EU tariffs and non-tariff measures are reasonable requests and are consistent with previous U.S. free trade agreements. U.S. Secretary Tom Vilsack signaled his unhappiness with the EU by stating there will be no trade agreement with the Europeans unless Brussels agrees to engage on difficult issues such as technology-based production. He said he has told this privately to his European counterparts and to U.S. Trade Representative Michael Froman. “Now,” Secretary Vilsack announced at the USDA outlook conference, “I am saying it publicly.” The EU is the second largest market in the world for pork consumption and represents a tremendous market opportunity for U.S. pork exports. The fourth round of TTIP negotiations is set for March 10-14 in Brussels, Belgium. Removal of all EU barriers would significantly increase U.S. pork exports to the EU, creating more than 17,000 U.S. jobs, according to Iowa State University economist Dermot Hayes.
VIETNAM LIFTS ITS BAN ON U.S. PORK OFFAL
In a huge victory for the U.S. pork industry, Vietnam this week notified the U.S. Department of Agriculture’s Food Safety and Inspection Service that it would accept pork offal exports from the United States. NPPC worked closely with U.S. and Vietnamese government officials on lifting the ban to U.S. pork variety meat exports. Other obstacles to trade with Vietnam remain, however, including “Circular 25,” which requires U.S. exporters to provide the Vietnamese government with confidential, company-specific information that is cumbersome and irrelevant to ensuring food safety. Because of the burdensome nature of Circular 25, only a small number of U.S. companies are eligible to export pork to Vietnam. NPPC continues to work hard in connection with the Trans-Pacific Partnership (TPP) negotiations to achieve the elimination of all tariffs and non-tariff barriers in Vietnam.
PACIFIC ALLIANCE SIGNS TREATY
This week in Cartagena, Colombia, at the eighth summit of the Pacific Alliance, leaders from the member countries signed a treaty to immediately eliminate tariffs on 92 percent of all goods and services, with the intent of eliminating the remaining 8 percent over time. The Pacific Alliance, formalized in 2012, is a free trade area that includes Chile, Colombia, Mexico and Peru, which account for more than one-third of Latin American GDP. Additionally, Costa Rica has signed a declaration of intent to join the trade bloc. The United States has bilateral free trade agreements with all of the Pacific Alliance member countries and is involved in negotiations for a larger trade agreement – the Trans-Pacific Partnership (TPP) – with three of the four nations. The Pacific Alliance countries have been an increasingly important market for U.S. pork. Mexico is now the largest volume market for U.S. pork exports at over 625,000 metric tons, valued at $1.2 billion in 2013. A free trade agreement with Colombia implemented in 2012 has resulted in a 204.5 percent rise in U.S. pork export values since implementation. Colombia also issued a decision Dec. 13, 2013, to remove all trichinae risk-mitigation requirements on U.S. pork, which include testing and freezing of U.S. pork and pork products. NPPC worked closely with the U.S. government and Colombian officials to reach an agreement on removal of all mitigation requirements. The removal of the trichinae mitigation requirement and the ability to ship fresh/chilled pork will further boost U.S. pork exports to Colombia. NPPC continues to work closely with Latin American countries to promote scientific regulation and market access for U.S. pork.
WTO HEARS CANADA AND MEXICO ‘COOL’ CASE AGAINST U.S.
The World Trade Organization (WTO) this week held a public hearing in Geneva, Switzerland, to hear Canada’s and Mexico’s cases against the revised U.S. Country of Origin Labeling (COOL) rule. The WTO in 2012 ruled that the COOL law violated U.S. obligations under the WTO Agreement on Technical Barriers to Trade, and it gave the United States until May 23, 2013, to make its meat-labeling law compliant with WTO rules. The U.S. Department of Agriculture issued a new COOL law intended to come into compliance with WTO guidelines, but the revised rule is considered by the Canadian and Mexican governments to be more discriminatory than the previous labeling scheme, and they requested a WTO compliance panel to review the rule. A ruling from the panel is expected this year. If the WTO finds that the U.S. rule is discriminatory, it will then start a retaliation proceeding. Canada and Mexico could be given authority to retaliate against U.S. products through very high tariffs that will restrict U.S. exports and kill U.S. jobs. Canada, the second largest export market for U.S. agricultural products valued at $21.3 billion, already has issued a draft retaliation list that includes fresh pork and beef, bakery goods, rice, apples, wine, maple syrup and furniture. Mexico, which is the third largest export market for U.S. agriculture totaling $18.0 billion in 2013, is threatening to suspend preferential tariffs for a variety of produce items, meat, dairy products and other commodities. Such retaliation would be similar to the tariffs applied on pork and many other products by Mexico a few years ago during the NAFTA trucking dispute. Mexico and Canada were the second and fourth largest export markets by value for U.S. pork in 2013, with exports totaling $1.22 billion and $844 million, respectively.
NORTH AMERICAN LEADER SUMMIT IN MEXICO THIS WEEK
President Obama this week traveled to Toluca, Mexico, to meet with Mexican President Enrique Peña Nieto and Canadian Prime Minister Stephen Harper to discuss trade issues. The trade agreement among the three countries, the North American Free Trade Agreement (NAFTA), just celebrated its 20th anniversary and remains one of the most important free trade agreements (FTA) that the United States ever has negotiated. NAFTA has been very beneficial for the U.S. pork industry. Mexico ranks as the second largest value market for U.S. pork exports, valued at $1.22 billion in 2013. U.S. pork exports to Canada, under NAFTA and previously under the U.S.-Canada FTA, have grown to more than 227,000 metric tons from just under 7,000 metric tons in 1989, placing Canada among the top five foreign markets for U.S. pork. NPPC continues to work closely with its counterparts in Mexico and Canada to strengthen the relationship and the North American swine herd. While NAFTA is a key agreement for the U.S. pork industry, all eyes are currently on the Trans-Pacific Partnership (TPP), a regional trade agreement among 12 countries, including the United States, Canada and Mexico. All three leaders recognized the need to conclude the negotiations. The TPP is at a critical point, with market access for pork and other agricultural products at issue. As with the highly successful NAFTA agreement, the TPP should eliminate all tariffs on U.S. pork and pork products.
PRELIMINARY AGRICULTURE CENSUS NUMBERS SHOW FARM NUMBERS DOWN
The 2012 Census of Agriculture preliminary numbers were made available this week, showing farm numbers declining from 2007 – the year the last Agriculture Census was published. The number of small and large farms remained fixed, while mid-size farm numbers declined. The number of farms is 2.1 million, down more than 4 percent from 2007. For the second time in history, crop sales of $212.4 billion surpassed livestock sales of $182.2 billion. As previous censuses have demonstrated, principal farm operators continue to become older, by 1.2 years, and more diverse as minorities are entering agriculture professions. Click here to read the preliminary report. The final report will be made public in May.
2014 PORK FORUM SET FOR MARCH 6-8
The 2014 National Pork Industry Forum will be held March 6-8, at the Sheraton Hotel Crown Center in Kansas City, Mo. For more information and to register for the joint NPPC-National Pork Board annual meeting, click here.