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McKinney: Trade deal work is rough, with worthy end result

By RACHEL LANE

WASHINGTON, D.C. — The agricultural industry is concerned about trade: a trade war with China, pulling out of NAFTA and the agreement with South Korea, decreasing beef sales to Japan and less access to some growing markets than some of the United States’ trading partners.

Since President Donald Trump took office, he has stated objections to U.S. participation in existing trade agreements. One of his first orders of business was to withdraw from the Trans-Pacific Partnership (TPP), which had been negotiated with Canada, Mexico and 10 Asian countries. At that time of his withdrawal, the agreement was waiting to be approved by the governments of the involved countries.

With U.S. withdrawal, the remaining countries adjusted and renamed the TPP the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). The purpose was to control China’s influence on trade. Without U.S. involvement, the goal may not be achievable.

Trump announced global tariffs aimed primarily at China imports to the U.S. In retaliation, China has threatened to impose tariffs, including on American agricultural products. Government officials from both countries have indicated they are willing to negotiate, but ag experts worry about a trade war.

Ted McKinney, USDA under secretary for trade, said there are problems with the trade agreements and that the U.S. does tend to have unfair barriers placed by trading partners. He is worried, but he is not prepared to back down.

“What did we expect? Did we think it was going to be a cake-walk to get where we want to go?” he asked at the Agri-Pulse Summit in March.

He said farmers have always faced trials and tribulations. The tensions caused by trying to get fair trade deals is another, similar trial. He said much of the disagreement about Trump’s position on trade has been focused on the methods, the rhetoric and the tone, not about the need to make better trade deals.

“The U.S. is finally and definitively defending trade barriers. Buckle up,” McKinney said. “You're asked to buckle up when you're in an airplane and there's some turbulence. But you get to your destination 99 percent of the time.”

He said he is looking at the long-term goals of trade. He is trying to maintain relationships with important countries like Japan and South Korea, while cultivating new markets like India, and expanding in markets where U.S. exports already exist.

It may take time to open the emerging markets, but McKinney is confident he can succeed. He’s already traveled to India several times since he was appointed seven months ago. More trips will be needed because it’s the face-to-face interaction that moves the projects forward.

“The relationships we've established in some of those countries are really strong,” he said.

Using the baseball analogy he has repeatedly favored the past few months, he said most games are won with singles and doubles, not home runs. His job is to set the foundation for future trade.

Most of the people he’s spoken to in the countries he has visited want more U.S. products. When a product is marketed as “from the U.S.,” he said sales increase immediately.

The problem is that most other countries have stronger trade barriers against imports than the United States. If a country can prove a product meets scientific standards, there are few limits on what the U.S. will import, he said. Trade agreements help to make the other countries just as open to U.S. products as the U.S. has been to theirs.

He wants to work with trading partners to make good agreements. If that means the agreements are only between the U.S. and an individual country, rather than multi-party trade agreements like the CPTPP, he will work toward the solution.

“I know the trade negotiations make you, and me, a little nervous. The President knows our concerns,” he said.

He thinks NAFTA renegotiations will be completed soon. And conversations are progressing regarding the U.S. - Republic of Korea Free Trade Agreement (KORUS) modifications. USDA Secretary Sonny Perdue said the agreement has been modernized and protects U.S. agricultural products.

"U.S. agricultural exports to the country have increased 95 percent over the past decade and we look forward to continued growth,” Perdue said. “Through this new agreement in principle, progress was also made with regard to Korea’s customs verification procedures, which have been a substantial concern related to exports of U.S. agricultural and industrial goods.”

McKinney has been meeting with Japanese officials and he hopes an agreement can be reached, whether it is bilateral or if the U.S. joins the CPTPP – that’s up to Trump.

And in regards to China? “I did say ‘buckle up,’ didn't I? With China, you might add shoulder straps,” McKinney said. “I continue to hope that China will understand that they have to change their ways if they're going to be on the world stage.”

4/4/2018