Op-Ed: After A Big Week In Trade, What’s Next On The Agenda

By Ryan LeGrand, USGC President and Chief Executive Officer

Last week was – in the words of Sen. Rob Portman, also a former U.S. Trade Representative – the World Series and the Super Bowl all at once in the world of trade policy.

On Wednesday, U.S. President Donald Trump and Chinese Vice Premier Liu He signed a phase one deal at the White House, promising extensive new sales of U.S. agricultural products and other goods and sweeping changes to non-tariff trade barriers that have stymied U.S. ag’s participation in the Chinese market.

On Thursday, the U.S.-Mexico-Canada Agreement, or USMCA, was passed by the U.S. Senate, leaving only Canada to approve it before it can be fully entered into force, hopefully by mid-summer.

And on Friday, we learned that the U.S. corn sector had prevailed in a countervailing duties case brought against us by Peru, a large and growing customer with whom we share a free trade agreement.

These are huge strides forward in the trade environment surrounding our efforts to build demand for corn, sorghum, barley, distiller’s dried grains with solubles (DDGS) and ethanol. By finding some resolution on these key issues – joined with a phase one agreement with Japan – we are able to pause and look forward with new eyes and over a longer term horizon.

So: what’s next?

The first and obvious answer is to work closely with our members, partners in industry and government officials to ensure these agreements go into force in a timely manner and are properly enforced as they are implemented. How well these agreements translate into real life in the marketplace will determine the long-term value they offer to our farmers and agribusinesses.

And, at the same time, now is the time to start thinking about new agreements and new access. Talk has turned to the potential for trade agreements with the European Union, the United Kingdom, a partner in Southeast Asia or even in Africa. All of these are worthwhile efforts we will strongly support because they hold potential to knock down barriers – tariff and non-tariff – in places where we could see significant growth. While there is appeal in the large, sweeping agreements that characterized trade policy for decades in the past, we’ve also seen the power of bilaterals and more focused, phased agreements to help us gain new market access.

Following the exciting week in Washington, on Saturday, I got on a plane to join the Grains Council officers and grower and staff leaders from the National Corn Growers Association (NCGA) on a mission to Southeast Asia to explore the potential growth available for grains products there. So far, we have met with government officials and representatives from the country’s largest fuel retailer in Vietnam, and we’ll finish up the week in Myanmar, a market we consider to be one on the horizon in the years to come.

This mission shows not just the need for continually evolving and strengthening trade policy, but also a focus on long-term demand building where we know there is vast potential for new sales based on population and income growth. While we work to achieve access through trade policy to these huge potential new sources of demand, we also have to keep our eyes set on the Council’s mission of long-term, sustainable market development.

In recent years, we have focused significant energy on marketing, helping our members and our sector as a whole ride the waves of a rapidly-changing marketplace. And yet our core mission is to work where the market does not and to find ways to address constraints that, if eased or removed, would open new doors for significant new demand.

We’ve been doing this work in a big way in two areas – ethanol and Africa – which we believe will change the global landscape for our products over the long-term. Meanwhile, the policy environment and its market impacts have clearly called us to diversify our approach, and we’ve been able to do that in large part due to increasing support from our members coupled with funds from the Agricultural Trade Promotion (ATP) program, part of the trade aid package.

Finally, while we focus on demand building overseas, we must also continue to focus on making the case for trade here at home. In recent years, talking about trade and market development and helping build trade ambassadors has become a wider calling for the Council and many other agriculture organizations. It’s amazing to see so much energy about trade issues at our meetings, when I travel to visit members, at trade school events and even in online conversation. As we often say, more than 95 percent of the world’s population lives outside of our borders; demand building overseas is as sure of a bet for investment as it gets. To keep doing the work of trade, those of us closest to the day-to-day challenges – and opportunities – of the global marketplace have to keep making the case for why engagement is so critical to our long-term success in agriculture.

Over the last several years, we have played a lot of defense – and now I’m ready to go on offense and get some points on the board. By taking advantage of the new trade deals in place, looking to the future of trade policy and long-term market development and continuing to make the case for member engagement on key trade topics, we plan to do just that for the good of the U.S. grains sector.

Keep up with the trade-related news with the U.S. Grains Council.