Pace of trade talks reach uncharted territory for nation’s ag sector

Each day has brought a new development in the world of trade. And while trade disputes aren’t new, the current pace and the number of contentious conversations happening concurrently is uncharted territory even for trade policy experts.

In his tenure with the U.S. Grains Council, President and CEO Tom Sleight can’t remember a time when the pace has been so rapid in global trade discussions.

“There has certainly been a paradigm shift in how everything is happening at the same time,” Sleight said. “In the past, we have had these issues one after the other, but now we are working on trade issues from all around the globe.”

For America’s corn farmers, Sleight said one trade issue followed closely by the U.S. Grains Council is the recent back and forth with Canada. Following President Trump’s announced tariffs on steel and aluminum, Canada proposed retaliatory tariffs that impacted America’s beef industry. As America’s second-largest export market for ethanol and also an important market for corn, Sleight said they are closely watching Canada’s next steps.

Currently, Sleight said Canada is taking a surgical approach in their retaliatory tariffs, focusing on products that directly impact industries in congressional districts where Republicans are challenged. The concern is Canada in the future takes a more broad approach and targets ethanol and other ag products, knowing their importance to the American economy.

With the changing focus, Sleight said NAFTA negotiations have temporarily stalled as both sides have focused on the more tenuous tariff discussions.

“With NAFTA, I think behind the scenes we are going to see more action to help us get over the finish line in the future, but for now I think those talks have taken a backseat,” Sleight said.

Trade discussions that currently have a firm spot on the front burner have been with China. While it holds tremendous growth potential as an export markets for agricultural products, China has enacted trade policies that have shut out American corn and other agricultural products. Sleight said his team is expecting retaliatory tariffs after President Trump announced it would impose tariffs as penalty for China’s alleged intellectual property theft that could further hurt negotiations with the country.

“We hope the proposed moves will be removed or softened, but for now we are hoping for the best while planning for the worst with China,” Sleight said.

Even with the negative headlines around trade, Sleight said America is having a very strong export year for corn. Currently, the United States is 23 percent ahead of the record export pace set last year. While currently in a strong position, Sleight said the strong start to 2018 could slow down markedly if tariff wars continue to spread.