KANSAS CITY, Mo. – When Gregg Doud interviewed with US Trade Rep. Robert Lighthizer for the job of chief agriculture trade negotiator, he told his future boss, “In agriculture, sir, we play offense.” That statement laid the groundwork for an overview of progress the United States has made to establish global trade partnerships. Doud was a featured speaker at the 2018 Ag Outlook Forum presented by The Agricultural Business Council of Kansas City and AgriPulse on Sept. 27. Some highlights of his remarks included an update on trade negotiations with Canada, and continued tensions between the United States and China.
On Aug. 27, the US and Mexico announced a preliminary agreement on a revised North American Free Trade Agreement (NAFTA). “What we did with Mexico is try to work on things for the next 25 years,” Doud said, by including discussions about new types of biotechnology, such as Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR) gene editing.
“We have a great relationship with Mexico on these technology issues,” he said. “I wish we had the [same] relationship with parts of the world — like the EU — like we do with North America, related to that. But we have to work together with our major trading partners in the world to continue to help people understand just how important that is.”
With regard to Canada and NAFTA, dairy has dominated discussions that are ongoing. “I have to tell you we have spent more time on this dairy issue than anything,” Doud said.
“I read a New York Times article about the similarities between the US and Canadian dairy systems,” he noted. “I can’t think of two entities that look the same but could not be more different.”
Doud said Canada has been selling skim milk powder into Mexico — and transporting it through the US — “…cheaper than we can sell it from dairies in New Mexico and Arizona into Mexico, which would tell you that maybe something was amiss in how that was working.”
“We have spent an inordinate amount of time trying to figure out how to deal with this,” Doud said.
“We’re at a point where, frankly, Canada has to make a decision.”
Later in his remarks, Doud said, “Now, we have to have ‘that’ conversation. That conversation is not a lot fun. That conversation is about our biggest export market for US agriculture; a country where in the last few years, we’ve sold some $20 billion in products to China.”
He urged the audience to read the findings of a USTR investigation into what US officials said are unfair practices of the Chinese government related to technology transfers, intellectual property theft and licensing regimes, among other infractions. “Folks, this about as serious as it gets,” Doud added.
Doud said what has been taken from the United States is roughly $50 billion in intellectual property. That figure formed the basis of the first salvo of tariffs imposed on Chinese imports at the direction of President Donald Trump. China responded by placing tariffs on agricultural goods imported from the US.
“It was China’s decision to retaliate against US agriculture,” Doud said. “It was China’s decision, that they somehow believed that if they did that, US agriculture would be concerned enough that they would convince the US government to pull back and not engage China on the fact that we needed to have these conversations regarding intellectual property, etc.”
The ambassador gave examples of other ways in which China has not aligned its trade practices with World Trade Organization (WTO) rules. Analysis suggests that China has exceeded allowable subsidies to farmers by some $100 billion, Doud said. “We have two of the biggest WTO cases in history against China in agriculture,” Doud continued. “China has not reported to the WTO what its agricultural subsidies have been since 2010. We have no idea what China is spending in domestic supports for its farmers.”
He called US exports of beef to Hong Kong “a thimble-full” considering 15 years’ of work done to open the Chinese market to US beef products.
“We also have a situation where we have, when they became a member of the WTO in 2001, they were supposed to implement their tariff rate quotas at some point, and they’ve never done that,” he added. “That’s billions of dollars’ worth of wheat, corn and rice that they haven’t imported, not just from us, but from the entire world.”