THE TTALK QUOTES 

On Global Trade & Investment
Published By:
The Global Business Dialogue, Inc.
Washington, DC  Tel: 202-463-5074
 
No. 66 of 2019
WEDNESDAY, OCTOBER 9, 20219

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JAPAN AND U.S. PORK

 "Japan is actually the largest purchaser by value of U.S. pork ... . We're very, very, VERY happy to have this agreement with the Japanese."

Maria Zieba
September 26, 2019
CONTEXT
The second panelist at the GBD event on September 26, Maria Zieba , is the Director for International Affairs at the National Pork Producers Council (NPPC). The focus of the event was on Japan, and Ms. Zieba was emphatically clear about the importance of the new U.S.-Japan trade agreement to America’s pork producers. Here is more of what she said on that score:

A successful U.S. pork industry really needs market certainty, and we’re very, very, VERY happy to have this agreement with the Japanese that was announced yesterday at the U.N. Once implemented, this trade agreement will place us back on a level playing field with our international competitors into one of our most important export markets. J apan is actually the largest purchaser by value of U.S. pork, and it is the second largest by volume.  We watched helplessly as we saw our competitors in the European Union and the CP-TPP countries as they took market share away from us through their trade agreements. So we are very happy that we have been able to level the playing field, and we look forward to the implementation of this agreement in the near future. 

According to Dr. Dermot Hayes – he is an economist at the Iowa State University – he estimates that U.S. pork exports to Japan will grow from – last year they were $1.6 billion – to $2.2 billion in the next 15 years under this agreement.

Like others on the panel, Ms. Zieba talked about more than the improved access to the Japanese market that the new agreement promises. She painted a picture of the U.S. pork industry with the numbers. She talked about new opportunities for U.S. pork producers in countries like Jamaica and Vietnam.  She reaffirmed the priority NPPC attaches to winning Congressional approval for the USMCA , the new NAFTA. And she talked about China . A transcript of her remarks is available on the GBD website. Here, we shall recap just a bit from the first and last of those four items.

U.S. Pork By the Numbers . “Pork is the Number One meat protein consumed in the world,” Ms. Zieba said. Here are some of the figures she used to describe the U.S. contribution to that portion of the global food chain, i.e. pork.

60,000 — The number of pork producers across the United States represented by NPPC.

500,000 — The number of jobs provided by the U.S. pork industry throughout the U.S. economy.  100,000 the number of U.S. jobs directly related to pork exports.

5.3 billion pounds — The volume of U.S. pork exported in 2018.

$6.4 billion — The value of U.S. pork exports in 2018. 

26 billion pounds ¬— The quantity “of safe and nutritious pork for consumers worldwide” provided annually by U.S. pork producers. As Ms. Zieba explained, the United States is the world leading exporter of pork.
COMMENT & SOME HISTORY
China – Because we expect to add to a pinch of speculation, we will deal with the China issue here in the Comment Section. But first a fact. The Chinese eat a lot of pork. According to a recent New York Times article, “China consumes over 50 million tons of pork a year or nearly half of the pork that is eaten annually by all humankind.”  If those are short tons, that would be 100 billion pounds. But the supply of pork in China has been sharply reduced by the devastating effects of African swine fever, which has been killing hogs in China at an alarming rate. As the same New York Times story explained, China manages a strategic pork reserve system, and has been selling pork into the market recently to ease the pressure of soaring prices, but that is a palliative, not a solution.

Increased imports from the United States would help both China and America. As Ms. Zieba’s put it:

Due to African swine fever, China’s domestic production has dropped dramatically over the last year or so. And prices to consumers are increasing to crisis levels. China needs a reliable source of pork, which is a staple of the Chinese diet. And there really is no more reliable source of pork in the world than the United States. … We could single-handedly put a huge dent towards the trade imbalance that we have with the Chinese. Instead, [Because of the trade friction between the U.S. and China] the opportunities in China have been fueling jobs, profits, and the rural development in our competitor nations.

Talks this week.  Chinese negotiators are due in Washington this week (if they are not already here). All things considered, there are not too many optimists out there. But with new U.S. tariffs scheduled to hit Chinese imports next Tuesday, both sides have plenty of incentives to seek some easing of the current tensions. Will they? We don’t know. Might they? Yes they might.
SOURCES & LINKS
Presentation by Maria Zieba is a link to the GBD transcript of Ms. Zieba's remarks at the GBD colloquium U.S.-Japan Trade: The Next Step . This was the source for today’s featured quote.


September 26 Event takes you to the page of the GBD website with materials from this event. At present these include the audio recording of Mr. Smith’s remarks that day as well as the transcript mentioned above. Soon it will include all of the recordings from that event.

Joint Statement is the statement on the forthcoming agreements on trade and digital trade that was signed by President Trump and Prime Minister Abe on September 25 in New York.

Japan Trade Agreement is a USTR fact sheet on this agreement.

U.S.-Japan Agriculture is a USTR fact sheet on the agricultural elements of the announced agreement.

China’s Pork Reserves, a Primer takes you to an October 7 New York Times article on these reserves by Wang Yiwei and Raymond Zhong. Their article highlights the importance of pork in China as well as introducing the reader to this supply management tool and its role offsetting the effects of African swine fever.  

More on China and AFS is the TTALK Quote from June 24, with more on the special challenges posed by African swine fever in China for both China and American pork producers.


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