What s at stake? Tom Sleight President & CEO

Transcription

1 What s at stake? Tom Sleight President & CEO

2 Mission Statement Developing Markets Enabling Trade Improving Lives

3 World Belongs to Those that Show Up

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6 US Trade Balance with Top-10 Major Partners Trade Balance (Goods Only) Source: US Census Bureau, December 2017 China Canada Mexico Japan Germany Korea, South United Kingdom France India Italy Hogan Lovells

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9 Millions of Households Global Middle Class is Expected to Reach 1.25 Billion Households by 2023 Growth Dominated by Emerging Markets Households w/real PPP incomes greater than $20,000 a year Middle class in emerging markets projected to increase 107% over the period vs. just 16% in developed countries Emerging markets Developed countries 100 Source: Global Insight s Global Consumer Markets data as analyzed by FAS/USDA

10 Middle Class In Emerging Markets Could Reach 865 Million Households By 2024, Double 2014 Levels China India Indonesia Households w/ Real PPP incomes greater than $20,000 (millions) Egypt Brazil Mexico Philippines Proj. gains by 2024 Turkey Russia 5 3 Vietnam Thailand Malaysia Colombia Source: Global Insight s Global Consumer Markets data as analyzed by OGA

11 Another Factor

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13 NAFTA

14 Trade In The NAFTA Era Mexico is the third largest U.S. ag trading partner Total bilateral trade up 430% since NAFTA Agricultural exports from the U.S. up 5x Mexico imports about ¼ of all U.S. feed grain exports 14,000 trucks and 1,800 rail cars cross daily at Laredo Sources: USDA, MX Secretaría de Economía

15 Mexico Is The Top Export Market For.. Corn Barley DDGS Wheat Soybean Meal Soybean Oil HFCS Dairy Products Poultry Meat & Products Eggs Pork Products Animal Fats Rice Source: U.S. Census Bureau Trade Data USDA/GATS

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17 Mexican Yellow Corn Imports Argentina Brazil Canada U.S.

18 Mexican Yellow Corn Imports Argentina , ,000 67,000 Brazil , , ,000 54, ,000 Canada , ,000 US 10,385,101 8,779,683 7,197,262 7,468,361 7,894,092 8,047,016 6,456,102 9,628,160 11,037,637 12,869,377 13,801,338 Total 10,385,101 8,779,683 7,197,262 7,468,361 7,949,092 8,204,016 6,678,102 9,628,160 11,297,637 13,072,377 14,451,338 U.S. Share 100% 100% 100% 100% 99% 98% 97% 100% 98% 98% 96% Source: SIAP *2017 imports from Brazil commenced in September

19 Pursuing Alternative Markets Canada Trade Initiatives EU CETA Effective Sept. 21 Pacific Alliance Caribbean Community Dominican Republic El Salvador, Guatemala, and Nicaragua India Morocco Singapore Japan TPP-11 Mexico Trade Initiatives Pacific Alliance Ecuador Brazil Paraguay MERCOSUR Jordan Korea Singapore Turkey European Union Update FTA TPP-11

20 Political Climate In Mexico Presidential election July 1, 2018 The current President s party (PRI center/right) has held the presidency in 77 of the last 89 years Andres Manuel Lopez Obrador (AMLO) is currently leading the polls Leftist, populist candidate Favors returning oil to government control Has disparaged NAFTA Accusations of Russian interference to help him Ricardo Anaya (PAN) and Jose Antonio Meade (PRI) are in a close race for second Armando Rios Piter (Ind.) is pushing to abolish U.S. grain imports MEADE AMLO ANAYA

21 Japan

22 Australia Canada Japan Malaysia Mexico Peru United States Vietnam Chile Brunei Singapore New Zealand

23 Japan Trade Policy Works seriously on TPP-11, and hopes the U.S. will come back But no renegotiation: PM Abe Not seem to be interested in a bilateral trade agreement GOJ realizes it would be a long time to reach a bilateral agreement Vice President Pence visited Tokyo on February 7 and held talks with GOJ: No talks on trade agreement

24 Korea

25 KORUS Amendments USTR initiated talks in July Amendment/Modifications Negotiations held more in future. Focus Trade Deficit in industrial goods autos/parts Agriculture is not a priority exception is rice access Council priority do no harm preserve FTA access Process designed to avoid TPA requirements and formal consultations

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27 And Then There is RCEP

28 China

29 US Agriculture Trade and China Hogan Lovells

30 China: A Long Trade Policy List WTO Domestic Subsidies & TRQ Investigations WTO-Illegal VATs MOFCOM Sorghum AD/CVD case Ethanol 30% Import Tariff Asynchronous Biotechnology Approval Process Decree 177

31 Antidumping, Countervailing Duty 2010 DDGS- Food needs trumped price imbalance 2015 DDGS- In it to win it Unprecedented 2 nd questionnaire 2018 Sorghum Unprecedented - no mandatory respondent, questionnaire to 30 entities Newton s 3 rd law?

32 Reciprocity & Retaliation: Investigations Targeting China New Antidumping and Countervailing Duty Investigations 1. Aluminum Foil, initiated March 28, Carton-Closing Staples, initiated April 21, Certain Tool Chests and Cabinets, initiated May 2, Cold-Drawn Mechanical Tubing, initiated May 10, Fine Denier Polyester Staple Fiber, initiated June 21, Cast Iron Soil Pipe Fittings, initiated August 3, Stainless Steel Flanges, initiated September 6, Polytetrafluoroethylene Resin, initiated October 19, Forged Steel Fittings, initiated October 26, Common Alloy Aluminum Sheet, self-initiated November 28, Sodium Gluconate, Gluconic Acid, and Derivative Products, initiated December 21, Certain Plastic Decorative Ribbon, initiated January 17, 2017 Hogan Lovells 32

33 Section 232- National Security Interest In the United States, Section 232 of the Trade Expansion Act of 1962 allows the president to initiate an investigation to determine whether our security is indeed threatened by imports, which threat can include substantial unemployment decrease in government revenue displacement of any domestic products by excessive imports, among other impacts

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35 We Both Want The Same Thing! China s own goals of Supply-side Reform seek the same outcomes as sought by U.S. trade officials: An end to policies that generate overcapacity and over production. Work out a solution that benefits both countries and maintains mutually-beneficial trade relations.

36 In Times Like These, We Need Friends For the most part, people in China like Americans and want to see the relationship continue to grow. The Council is continuing to build relationships with key stakeholders in government, industry and academia.

37 Good News! Southeast Asia South Asia/Frontier Asia Middle East/North Africa Possibly Africa More demand growth Western Hemisphere EtOH

38 "The region is not thrilled by the trade message," said Chan Heng Chee, a Singapore ambassadorat-large who was an envoy to the U.S. from 1996 to Straits Times Nov 2017

39 It comes down to Global Presence

40 Funding Allocation MAP/FMD Funding $12,000,000 USGC FAS Approved Budget $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $ MAP $9,373,977 $11,041,370 $8,534,358 $8,054,871 $8,291,699 $7,937,961 $8,158,523 $8,313,397 $8,236,835 FMD $5,021,584 $4,920,453 $4,573,333 $4,145,521 $3,957,524 $3,880,052 $3,802,451 $3,434,164 $3,407,809

41 If Things Really Get Rough...