David Salmonsen is the Senior Director of Congressional Relations at the American Farm Bureau Federation, and last Friday he was at the National Press Club talking about China and American agriculture. He did so as part of a GBD panel on
China Trade: 5 American Views.
Mr. Salmonsen has a low key style, and it had the counter-intuitive effect of magnifying the drama in the numbers he quietly enumerated. He won his Washington audience over at the outset with the gentle observation that "Everyday is special this week," referring to the whirlwind start of the
Trump administration - much of it dealing with trade.
Though the policy focus may be shifting from TPP to other things, Mr. Salmonsen said, "What drives agriculture ... to engage in this does not change at all, especially with China. ...
We're always eager for new markets, always eager for more." That is especially true now, Mr. Salmonsen said, because farm prices are low, back to where they were in 2004 and 2005.
U.S. Agricultural Exports. Mr. Salmonsen painted a broad brush picture of American farm exports with these numbers.
$130 Billion. U.S. agricultural exports last year were about $130 billion. That's down somewhat from the $150 billion of a few years ago. The volumes are about the same but commodity prices have dropped.
Canada at $21 billion is the top destination for U.S. agricultural exports, followed by:
China, over $19 billion. With Hong Kong added, Mr. Salmonsen said, it's about $23 billion. Put differently, China and Hong Kong together provide the market for approximately 18 percent of all U.S. agricultural exports.
Mexico at about $18 billion;
About Soybeans. Mr. Salmonsen talked about a number of American products and producers that rely on the Chinese market. For us, the really arresting one was soybeans. Thirty to thirty-five percent of all U.S. soybeans go to China, Mr. Salmonsen said. He added:
"So when you talk to the people in the mid-West and all the soybean producing states in the South, they always have China on their mind."
Beyond exports and the U.S. agricultural sectors that are doing well in China, Mr. Salmonsen had a lot of good things to say about the broader, in a sense, political context of the U.S.-China relationship as well. The U.S. agricultural community was very pleased when President-elect Trump announced that he would name Iowa Governor
Terry Branstad as America's next Ambassador to China.
And there have been other positive developments as well. For example, as Mr. Salmonsen explained:
"In the summer of 2015, USDA and the Chinese Ministry of Agriculture basically started an agricultural strategic dialogue, where they were getting together, working on agricultural issues, agricultural development projects. We'll see what happens with that in the future."
So far, it is seen as a very positive development. But wait, there is more, some of it not so positive.
"But you know, with trade you get issues." With that brief sentence, Mr. Salmonsen made the transition to the darker, minor key passages of his China sonata. As he put it:
"I get asked about issues all the time from farmers, and I say, 'You know, would you rather not have the issues and not have the trade? Or would you rather have the trade with the issues?'"
We assume that, by and large, that's a rhetorical question that he puts to his members. And yet, as his first example illustrated, sometimes the issue means there is no trade. Here are some of the challenges he mentioned for U.S. ag producers frustrated by Chinese policies:
Beef. "The Chinese market has been officially closed to U.S. beef since 2003," when a cow in Washington State was determined to have died from BSE. For most countries, the issue was put to rest years ago, especially after the World Animal Health Organization listed the United States as a minimal risk country for BSE back in 2007. In China, however, the issue lives on, notwithstanding China's assurances that the Chinese market would soon be open to U.S. beef.
Poultry. There were problems with avian influenza a few years ago, but only in a few U.S. states. "China shut down all of our poultry imports back in 2015," Mr. Salmonsen said. "Internationally," he added, "You're supposed to regionalize that, not shut down a whole country."
Biotechnology. "We've got issues with the Chinese approval process," for chemicals used in agriculture, Mr. Salmonsen said.
Subsidies. It may be winding down, but China has been subsidizing a number of key products, including corn, wheat, rice, and cotton. It is serious enough that the U.S. has brought cases against China in the WTO on the issue.
Tariff-Rate Quotas. There is also a WTO case challenging how China has been administering TRQs.
Ethanol and Dried Distillers Grain. The U.S. isn't the only one using trade remedies. China has slapped anti-dumping duties on both of these products from the U.S.