TARGETING PORK

"Because pork is an export juggernaut, it is an attractive candidate for trade retaliation.  ... Our industry has the dubious distinction of being on three retaliation lists."  

 

 Nick Giordano   

National Pork Producers Council
June 29, 2018

 

 Nick Giordano explains: Pork is on three retaliations lists.  

 

 

Informative, hard hitting, and nuanced - it's hard to get all three, especially those last two, in a single presentation, but in his remarks at the Global Business Dialogue on June 29, Nick Giordano did it.

 

Mr. Giordano is Vice President and Counsel for Global Government Affairs at the National Pork Producers Council. The last of four speakers, he began with some facts about pork and the U.S. pork industry. One of the first of these was this:

 

Pork-not chicken, not beef-pork is the number one meat protein consumed in the world.

 

And the United States, with 60,000 pork producers, is the world's low-cost producer. Those farmers, working in all 50 states, generated more than $20 billion in cash receipts in 2017 and supported 550,000 U.S. jobs. And trade is a big part of it. U.S. pork is shipped to over a 100 countries, Mr. Giordano said. This past year for example, the U.S. exported a record 5.4 billion pounds of pork to foreign customers, and those shipments accounted for almost 27 percent of the industry's receipts or $6.4 billion.

 

But, as today's featured quote declares, the trade picture has become much, much more difficult in recent months and the expectation is that the industry will suffer losses this year in excess of $2 billion. That's according to a January forecast from Iowa State University. Here is an extended version of today's quote:

 

Because U.S. pork is an export juggernaut, it's an attractive candidate for trade retaliation. So, our industry has the dubious distinction of being on three retaliation lists: China and Mexico 232 and China 301. Those are very important export markets for us. Mexico is our largest volume market and our number 2 value market, taking almost 802,000 metric tons of pork, worth more than $1.5 billion in 2017. China was our number 2 volume market at more than 495,000 metric tons and our number 3 value market at $1.1 billion last year.

There is never a good time to have a problem in an industry, and, for an industry, like ours, that's dependent on exports, there's never a good time for an export disruption. But the timing here is particularly bad. The U.S. pork industry is in the middle of an export-driven expansion with production expected to grow by about 5 percent in 2018. As the world's most competitive producer of pork, the U.S. pork industry was anticipating increases in access to Japan and Vietnam and others through the Trans-Pacific Partnership and was counting on shipping more pork under prior U.S. free trade agreements. Obviously, things have changed.

Ambassador Gregg Doud, the chief agricultural negotiator with the Office of the U.S. Trade Representative, summed it up recently by telling our producers, "The lead tip of the spear in all of this right now is your pork." And boy did he get that right!  

 

THE LARGER QUESTIONS

If those comments and the repeated references to the pork industry's "financial pain," were the hard-hitting part, the nuance came shortly thereafter. And there were two elements to it. One was what Mr. Giordano said about America and the global trading system. The other was his assessment of how rural America sees the Trump Administration.  

 

TRADE
On trade generally, Mr. Giordano sought to broaden the issue beyond the question of U.S. compliance with particular GATT articles. He said:

 

The focus of this panel is really 232 and legality, but I think the broader question being asked by a lot of people in the United States is, does the post World War II trading system, that the U.S. was the primary architect of, does it still serve our national interests? And that's a big question, and if you're an industry that was built on the current trading rules and you export, it's tough. Change is tough.

 

Later he added:  

 

We're clearly redefining the trade relationship with China; obviously modernizing the NAFTA. These are complex matters. Our producers get it.

 

RURAL AMERICA AND THE TRUMP ADMINISTRATION

Mr. Giordano also made it clear that, difficult as the current trade situation is for his members, their view of the Administration is broader. He said:  

 

They also know the President is committed to strengthening American agriculture and the rural economy. And they acknowledge that the tax and regulatory reforms the Administration has implemented, and approved by the Congress, have set a course for significantly improved economic growth. .... Ag. Secretary Perdue and other Administration officials have made it clear that they have the back of the American farmer. The Administration has told us point blank that it's going to take steps to mitigate pork producers' pain.

Yes, there was more, and you will want to read or listen to Nick Giordano's full presentation.

As we have noted in earlier entries, there were four speakers at GBD's June 29 session on the 232 tariffs - five if you include the insightful comments of the moderator, John Magnus of TradeWins.  All of the presentations were excellent.  Nick Giordano's was the last of them.  It was a fitting note to end on at the time, and it is a fitting end to this short, four-part summary of the event.

From the Transcript is a link to our transcription of Nick Giordano's presentation on June 29.  This was the source for today's featured quote and others in the above entry.  The audio recording from which it was taken is available on the Events page of the GBD website, www.gbdinc.org.  

 

About the Event takes you to the page of the GBD website that focuses on the June 29 GBD event What's in a Name?  The Tariffs, National Security, and the WTO.  Here you will find links to biographies of all of the speakers, an MP3 recording of each of their remarks, and a link to the C-Span video of the full event.