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Trade is critical for America, particularly for Agriculture.
7 August 2017
Jason HafemeisterUSDA Trade and Foreign Agricultural Affairs202.720.3111jason.hafemeister1@osec.usda.gov
U.S. Ag Exports in ContextU.S. Agriculture is Competitive and Trade Dependent
Agreements Increase Demand and Reduce Barriers
The Trade AgendaProblems: barriers, subsidies, technical standards
Markets: Canada, Mexico, Japan, China …..
Tools: negotiation and litigation
0
50
100
150
200
250
300
350
400
450
500
1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
Farm-
related
income
Government payments
Livestock cash receipts
Crop cash receipts
Note: Crop insurance net indemnities included in farm-related income.Source: Farm Income Data, Updated August 2016. Economic Research Service, USDA.
U.S. Agriculture Relies on Exports.Exports support higher prices and expanding production.
4Source: USDA: ERS, Farm Income and Wealth Statistics. USDA: FAS, GATS, all agriculture. CY data.
0
50
100
150
200
250
300
350
400
450
U.S. Ag Exports
U.S. Ag Cash Receipts
U.S. Ag Exports and Imports 2016
The United States is an export powerhouse. All sectors export, most have a trade surplus.While we are big importers, most imports are complementary.
0
2
4
6
8
10
12
14
16
18
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Tree
Nu
ts
Bee
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U.S. Exports U.S. Imports
0
5
10
15
20
25
30
35
40
Oilseeds & Products
Billion$
USDA/FAS/GATS complex mix of categories. CY data.
Trade is Important for U.S. Agriculture
5
U.S. Ag Exports as a Share of Production. Exports are a critical source of income for a wide range of ag products (2015/16).
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Source: USDA/FAS/PSD database, marketing year data
Korea, Colombia, Panama FTAs
Source: USDA Global Agricultural Trade System (CY basis)
0
30
60
90
120
150
19
47
19
50
19
53
19
56
19
59
19
62
19
65
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
20
07
20
10
20
13
20
16
Billions $U.S. Ag Exports
U.S. Ag Imports
Tokyo Round of GATT
Uruguay Round of GATT
GATT Established
Kennedy Round of GATT
Trade Act of 1974
Trade Act of 1988
Trade Promotion Authority
Fast TrackDenied
Doha Launched
China in WTO
CAFTA-DRNAFTA
Japan: Beef & Citrus
Source: USDA FAS Global Agricultural Trade System*Share of exports to the 20 FTA partners in 1990 vs. share of exports to same countries in 2015.
0
10
20
30
40
50
60
70
Grains &feeds
Dairy Poultry Beef Pork Fruits &veg.
Pe
rce
nt
(%)
1990
2015
0
1
2
3
4
5
6
7
Pre 5 years Post 5 years
0
2
4
6
8
10
12
NAFTA
Billion$U.S. Ag Exports Grow after Trade Agreements
(Comparison average pre and post five years)
Note: China reference is WTO AccessionNote: four year data post agreement only for Colombia, Korea and Panama.
9USDA/FAS/GATS CY data.
High Income($12,476+ GNI per capita)
100
300
500
700
900
1100
1300
Mill
ion
s o
f H
ou
seh
old
s
Households w/real PPP incomes greater than $20,000 a year
Lower-Middle Income defined as ($1,026-$4,035) GNI per capita
Upper-Middle Class Income defined as ($4,036 - $12,476) GNI per capita
Middle class in middle income countries projected to increase by 119% by 2024 vs. just 12% in high income countries
Source: Global Insight’s Global Consumer Markets data as analyzed by OGA
Most of the increase will be in middle income countries and the impact on
worldwide food consumption will be significant
Lower income countries spend much more of that additional income on food
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Co
ngo
, D.R
.
Nig
er
Gam
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Zam
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Gh
ana
Nig
eria
Ind
ia
Ch
ina
Mo
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Nam
ibia
Par
agu
ay
Jord
an
Pe
ru
Bra
zil
Bo
snia
Kaz
akh
stan
Mex
ico
Mac
ao
Isra
el
Mal
ta
Ital
y
Au
stra
lia
Can
ada
U.S
.
Other
Education
Recreation
Transport &communicationHealth
Furnishings
Housing
Clothing
Food
Source: USDA, Economic Research Service using International Comparison Program 2005 data.
-2%
0%
12%
17%
22%25%
45%
62%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
EU NorthAmerica
FSU East AsiaminusChina
SouthAmerica
China SoutheastAsia
South Asia
Changes in Beef, Pork, and Poultry Consumption2016 vs 2006
Source: USDA Production, Supply & Distribution Database
-20% 0% 20% 40% 60% 80% 100%
North America
E. Asia minus China
EU
FSU
South America
China
South Asia
SE Asia
-7%
-3%
3%
20%
53%
71%
73%
85%
Changes in Grains and Oilseed Meals in Feed Consumption2016 vs 2006
Source: USDA Production, Supply & Distribution Database
14
• 355 million bushels (or 2.1 million acres) of corn • $1.3 billion in value to corn • 1.48 million tons of DDGS (169 million bushel
equivalent) • $205.4 million in value to DDGS • 11.7 million tons (or 3.1 million acres) of combined
corn and DDGS fed
Source: World Perspectives, USMEF
2015 U.S. Red Meat Exports accounted for:
Without red meat exports, the price of corn in the U.S. would have been $.45 a bushel lower.
Meat Exports Expand Corn Demand
Meat Exports Expand Soybean DemandCurrently more than 20 percent of domestic pork production is exported; that is expected to grow to 22 percent over the next 10 years even as hog production and pork production expand.
Over the next 10 years, one in every 2.75 pounds of additional pork production will go to the export market.
One pig finished from 12 lbs to 284 lbs consumes an average of 136 lbs of soybean meal.
U.S. pork exports in 2016 will utilize:· 1.75 million tons of soybean meal· 73.4 million bushels of soybeans
That should be the equivalent of 1.5 million acres of soybeans this year
Pork exports are likely to generate more than $672 million to soybean growers in 2016 (assuming season average price of $9.15/bu).
Estimates from World Perspectives, Inc., based on USDA baseline projections for pork and soybeans
As WTO Stalls, Countries Turn to FTAs for Market Access. U.S. Falling Behind.
0
50
100
150
200
250
300
1961 1977 1986 1993 1997 2001 2005 2009 2013
Total WTO-Notified PTAs
U.S. WTO-Notified PTAs
Global Preferential Trade Agreements
Source: WTO
0
20
40
60
80
100
120
Ho
ng
Ko
ng,
Ch
ina
Sin
gap
ore
New
Zea
lan
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Pe
ru
Mo
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lia
Ch
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gyz
Rep
ub
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rain
, Kin
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ine
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oliv
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t Lu
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ine
se T
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Mal
awi
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Jap
an
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anka
Sud
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Mo
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Rep
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Mya
nm
ar
Source: WTO Tariff Profiles. 2012
USA EU China Canada Mexico Japan
Korea
VietnamMalaysia
India
Norway
%
Production Process Methods and Labeling Requirements Become Trade Issues
Beta-Agonists
Antibiotics Animal welfare
Geographic IndicationsOrganic
Antimicrobial treatments
Sustainability
Halal slaughterNew technologyHormones
Health/nutrition standards
Known Unknown
Unknown Unknown
Residues
Top 10 Ag Markets 2016
USDA/FAS/GATS. CY data.
FTA CountriesChina/HK/Taiwan
Our top 10 markets account for 75% of exports. Successful bilateral negotiations will ensure low tariff access in most of these markets.
19
0 5 10 15 20 25
China
Canada
Mexico
EU
Japan
Korea
Hong Kong
Taiwan
Indonesia
Vietnam
Billion $
0
0.5
1
1.5
2
2.5
3
1993 2015
U.S. Ag Exports to North America: 1993 and 2015 billion dollars
Source: USDA Bico HS – 10 product groups
North America Share of Total U.S. Ag Exports
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1993 2015
Source: USDA Bico HS – 10 product groups
U.S. Trade with Mexico: Agricultural & Agricultural Related
Source: FAS-GATS – BICO-HS6
-5
0
5
10
15
20
25
301
99
01
99
11
99
21
99
31
99
41
99
51
99
61
99
71
99
81
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92
00
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22
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32
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42
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52
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62
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72
00
82
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92
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12
01
22
01
32
01
42
01
52
01
6
Val
ue
s in
Bill
ion
Do
llars
U.S. Agricultural Trade Balance with Mexico– 1990-2016
Trade Balance
U.S. Exports
U.S. Imports
0
0.5
1
1.5
2
2.5
$ billion
Key U.S. Ag Exports to Japan
2016 USDA/GATS/FATUS
Top US Export Market#2 Export Market#3 Export Market
Significant Tariff Barriers
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
2001 2015
China share of U.S. Exports to World
FATUS categories. Beef and pork include variety meats. Fruit includes fruit juice. Corn includes DDG and ethanol. Tobacco includes cigarettes.
Key China Trade Policy Issues• Grain Protectionism
• Subsidy policies• Improper TRQ administration
• Cotton subsidies and tariffs• Beef (sanitary restrictions)• Biotech (corn and soybeans)• Rice (phyto protocol)• Other Corn Product issues
• CVD/AD• VAT• ethanol tariff
• Poultry (sanitary restrictions & CVD/AD)• Dairy • Other ………….
TPA 2015 – Vote of AG Congressional Districts
Top 230 Congressional Districts ranked by value of ag production ($200 million or greater)
resigned, no vote
Voted no,then yes.
Yes on TPA” 2015
No on TPA” 2015
Did not vote
Exports are critical to the health of U.S. agriculture, and for rural communities.
Trade agreements have helped support U.S. agriculture production and prices.
U.S. agriculture is competitive, but other countries are seeking advantages. Aggressive trade policy can protect us from falling behind and create new opportunities.
Opportunities include Mexico, Canada, Japan, China and others.
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