David Salmonsen is with the American Farm Bureau Federation, where he is the Senior Director for Government Relations.  Fresh from the Farm Bureau's annual convention in New Orleans, Mr. Salmonsen talked about North American trade as one of four panelists at the GBD event "A North American Checklist," which was held at the National Press Club on January 24.  It is understandable that he should have begun his talk with anecdotes from New Orleans.  It was a big deal.  It was the group's centennial event, and President Trump was there on January 14 to help the farmers and ranchers celebrate.

Mr. Salmonsen's personal interactions with the farmers and ranchers that make up the Farm Bureau is captured in today's featured quote.  There is a sense in which American trade policy is held in a painful holding pen.  The question "When?" dominates issue after issue and there are no answers in sight. That said, Mr. Salmonsen reviewed the elements that were central to the GBD event on January 24.

GOALS FOR USMCA
The Farm Bureau is a strong supporter of the United States-Mexico-Canada Agreement or USMCA, also known as the new, modernized NAFTA.  In explaining what the Farm Bureau wanted from that agreement, Mr. Salmonsen said:

 

Well, we pretty much wanted what we had. ...   You know, we had a good deal.  And it continues as a good deal.  ... We went from a little over $8 billion in ag sales to Canada and Mexico before NAFTA.  Now we're about $40 billion.  You know, getting rid of tariffs is a good thing.  It's a good thing.  And so, that was fine; let's continue with that.  And we have.   

 

He also noted that USMCA includes some market access improvements for his members, particularly in Canada, but they are modest.  Those gains are in dairy and poultry, which are regulated under Canada's supply management system.  As Mr. Salmonsen put it:  

 

Canada didn't really address tariffs.  ...  They addressed quotas.  They didn't lower their tariffs on anything, but we got some more quota access.  That's positive.  That's good.  That's a win.   

 

THE METAL TARIFFS
The 232 or national security tariffs on steel and aluminum still apply to imports from Canada and Mexico - 25 percent on steel imports and 10 percent on aluminum.  It was clear from Mr. Salmonsen's comments that some members of the Farm Bureau are sympathetic to the goal of those tariffs, namely strengthening those two industries.  It is also clear, especially from the policies the group adopted at its New Orleans conference, that they nevertheless very much want those tariffs to go away.  They are driving up costs for the farmers who use steel inputs, for example, and they have led to costly retaliation.

At the risk of getting ahead of ourselves, the press release the Farm Bureau issued on January 15 summarized the group's new policies in the trade area this way:  

 

Delegates voted to favor negotiations to resolve trade disputes, rather than the use of tariffs or withdrawal from agreements. They also voted to support the United States' entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. 

 

NEIGHBORS RETALIATING
Mexico and Canada have retaliated with tariffs of their own against U.S. products, including agricultural products.  "Both Canada and Mexico are affecting about $2 ½ billion each of U.S. ag exports," Mr. Salmonsen said.  To put that in perspective, the U.S. exports about $22 billion in agricultural products to Canada each year and about $19 billion to Mexico, Mr. Salmonsen said.  

 

And of course retaliation is always political.  U.S. pork, dairy, apples and whiskey are some of the products being retaliated against. "Everybody who retaliates puts whiskey on the list," Mr. Salmonsen said, presumably because so much of it is made in Kentucky, the home state of Senate Majority leader Mitch McConnell.