ROCK VALLEY—After a year filled with weather extremes, uncertainty surrounding foreign trade and obstacles for ethanol producers, Iowa secretary of agriculture Mike Naig is hopeful 2020 will be friendlier to Iowa agriculture workers.
Naig shared that sentiment Monday, Jan. 6, at Rock Valley’s Parkview Event Center while speaking at a luncheon hosted by Northwest Iowa Development. About 60 area city and business leaders attended.
The focus of the event was discussing existing challenges and opportunities the United States, and Iowa specifically, has regarding foreign trade.
Naig explained that after a rocky year-and-a-half exchanging tariffs with China, the United States recently reached a trade agreement with the Asian country. He said President Donald Trump may sign Phase One of the agreement into law as soon as Wednesday, Jan. 15.
According to the fact sheet available on the Office of the U.S. Trade Representative website, Phase One of the U.S.-China trade agreement would require China to substantially increase the amount of goods and services it purchases from the United States, including food and agricultural products.
The agreement also calls for reforms in the Chinese economy and trade policies regarding intellectual property, technology transfer, agriculture, financial services and currency and foreign exchange.
“It doesn’t solve everything, every issue we’ve got with China, not by a long shot,” Naig said. “But it’s a move in the right direction and that’s good news.”
He also mentioned how the outbreak of African swine fever that began in August 2018 — and has since decimated about a third of China’s hog population — presents an opportunity for U.S. pork producers to increase exports to the country.
“That does shift what China needs, right?” Naig said. “If half of your industry is gone, well, what do you need half of? Feed. So you don’t need as many soybeans, you don’t need as much corn but you do have a significant demand for protein.”
The United States also recently entered two trade agreements with Japan: the U.S.-Japan Trade Agreement and the U.S.-Japan Digital Trade Agreement, which went into effect Jan. 1.
Japan has been an important, longtime trading partner with the United States, Naig explained, and the trade agreements aim to increase access to Japan’s agricultural and digital markets for U.S. exporters.
Naig addressed the importance of getting the U.S.-Mexico-Canada Agreement signed into law, although he did not know when that would happen.
The trade agreement, which would function as a modernized North American Free Trade Agreement, was negotiated more than a year ago and passed the U.S. House of Representatives in December.
It is still, however, pending approval in the U.S. Senate
When asked how the USMCA would be better than NAFTA, Naig said the new agreement would take into account products and services that did not exist 25 years ago when NAFTA was signed.
He said the updated trade deal also would ensure continued access to the Mexican and Canadian markets for U.S. exporters.
“These were already our No. 1 and No. 2 markets, so it’s not like we’re going to bring them from the bottom to the top here but it does provide certainty,” Naig said.
In addition to discussing trade, Naig also brought up the small refinery exemptions the Trump administration granted in August which decreased demand for ethanol.
“We didn’t quite yet what we wanted, what we needed, in terms of small refinery exemptions. We’re going to have to continue to fight for this industry, but it’s worth fighting for,” Naig said.
In follow-up comments he made after he finished speaking on stage, Naig mentioned changes the U.S. Environmental Protection Agency recently finalized which determine how much ethanol to blend into the nations’ fuel supply.
That change did not include language to follow through on a commitment to blend 15 billion gallons of ethanol into the supply.
“Basically, what they said was, ‘Trust us, we’re going to deliver a 15 billion-gallon blend level for ethanol,’” Naig said. “And now my response to that is: ‘Prove it.’”