KANSAS CITY, MO. — During The American Feed Industry Association’s (AFIA) virtual Pet Food Conference on Jan. 26, Gregg Doud, former chief agricultural negotiator, with the rank of ambassador, in the Office of the United States Trade Representative (USTR) who served from March 2018 to January 2021, provided his candid perspective on US agricultural exports.

Following the signing and implementation of the US-China Phase One trade agreement in early 2020, Doud reports record breaking agricultural exports to China.

“Our ag exports to China are up 77% for the 11 months of 2020 versus the same 11 months of 2019,” Doud said. “In fact, the latest trade data for October and November, shows those were the two biggest months of all time for ag exports to China.

“We are going to be really interested to see what December looks like,” he added. “I think there is a chance that 2020 will be the all-time record for ag exports to China. And that’s really incredible when you consider the fact that we didn’t sign the [Phase One] deal until the middle of January and we didn’t begin it until the middle of February and the exclusions process for China’s retaliation on our tariffs was March 2.”

Looking at pet food exports to China, the United States exported approximately $11 million worth of products to China in 2019. In 11 months of 2020, Doud reports that number is up to $30 million. Composite animal feed exports, as well as hay exports to China were up 34%, and whey exports increased by 74%.

An important factor making these exports possible is the increase in US facilities eligible to export products to China. That number has risen during the Phase One agreement from 1,500 US agricultural facilities to well over 4,000.

“Our ability to export agricultural products to China was being hugely limited behind this governance they had on getting new products and new facilities approved,” Doud explained.

According to Doud, the larger demand by China on the feed side is going to empty US bins of grain sorghum, soybeans and corn.

“Logistically on the feed side, this might be one of the most extraordinary years we’ve seen in a long time,” Doud said. “China’s soybean demand are 110 to 115 million tons for the year. That’s up from 100 last year and a couple of years it was down to 82 due to African Swine Fever, so we are talking about a significant increase in China’s demand for soybeans. I’ve seen numbers all over the board on China’s demand for corn, but whether it is 20 or 30 or over 30 million tons of corn imports, that is a huge number.”

In addition to China, Doud said trade agreements with Canada, Mexico and Japan are important to the pet food industry and overall US agriculture interests. Agreements with these four countries represent 47% of US agricultural exports.

“I’m particularly proud of what we did in the Japan agreement,” Doud said. “It’s one of the great unsung trade deals of all time to get ourselves on track with all the other TPP countries in regard with agricultural trade in Japan. I think it’s a very significant thing especially for us on the meat and wheat side of the equation. And obviously what we’ve done with USMCA is very important.”

Looking ahead, Doud said the United States has yet to reach an agricultural trade agreement with the United Kingdom.

“I’m most disappointed that we didn’t get a chance to enter into a conversation with the United Kingdom,” Doud said. “I think there is real opportunity for us there in ag.”

Fortunately, some of the trade data in pet food shows the US performing fairly well in the UK, Doud reported.

In looking at the European Union (EU), he believes an agreement with the EU will prove difficult based on our risk-based regulatory system and the European regulatory system based on the precautionary principle. These two approaches to food safety are fundamentally different, Doud said.

He explained that a risk-based system concentrates the majority of resources and regulation on the area of the manufacturing process that pose the greatest risk of food-borne illness to make sure the product is safe. The regulatory process of the European precautionary principle defines a set number of steps to follow in a specific order and those manufacturers that follow those steps in that order are approved.

Outside of Europe, Doud mentioned Vietnam, the Philippines, Saudia Arabia and the Middle East in general, Kenya and Morocco as interesting prospects for future agricultural trade agreements.

In a separate pre-recorded presentation during the Pet Food Conference, Ginal Tumbarello, director of international policy and trade for AFIA, discussed how the new administration in the United States might potentially address trade. Tumbarello shared a look at what to expect for trade under the Biden administration as part of the AFIA’s virtual conference in a pre-recorded session made available on Jan. 25.

In spite of the impressive 2020 agricultural export numbers to China, Tumbarello said it’s important to remember that the United States remains in a trade war with China that includes Chinese tariffs on US exports of pet food products to China. She said the previous administration favored bilateral over multilateral trade agreements and saw tariffs as a “go-to” way to approach obstacles and grievances with trade partners.

“We’ve heard senior advisors of President Biden mentioning that the Biden administration might consider using tariffs as-needed and backed by a strategy to address violations of trade rules,” Tumbarello shared. “So, we might continue to see tariffs as a way to incentivize our trading partners for change, but I think if the Biden administration goes that way, we’ll see it dawn in a different way and imposed in a different fashion.”

In addition to shifting toward multilateral agreements, President Biden has pledged to prioritize relationships in trade agreements. However, Biden has also pledged, according to Tumbarello, not to enter into any new free trade agreements until the United States has invested in Americans and equipped them to succeed in the global economy.

For pet food and agricultural product manufacturers wanting to export their products, Doud left them with one suggestion.

“I think the best answer going forward is to go into a country and find a local partner,” Doud said. “Partner up and get busy. I think you’ll be really successful time and time again.”

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