Page 27 - Export or Bust eBook

However, the administration has also unnerved trading partners by renegotiating the North American
Free Trade Agreement (NAFTA), pulling out of the Trans-Pacific Partnership (TPP) and announcing
tariffs on steel, aluminum and a variety of other products – prompting retaliatory threats from the
Chinese and other countries.

President Trump sent some of his key staff and cabinet members on a trade mission to China recently,
including White House advisers Peter Navarro and Larry Kudlow, U.S. Trade Representative Robert
Lighthizer and Treasury Secretary Steven Mnuchin. The foursome discussed a wide variety of concerns
with Chinese leaders, including the pending tariffs, better access for U.S. products, and concerns over
alleged intellectual property theft.

Several U.S. agricultural groups say that one of the best ways to keep pressure on the Chinese and
counter the Asian giant’s influence is for the U.S. to rejoin what used to be called the TPP.

Just three days into his presidency, Donald Trump carried out his 2016 campaign promise to withdraw
the U.S. from the negotiations for a trade pact among a dozen Pacific Rim nations. The agreement’s
other parties were shocked. But they recovered quickly by finalizing their negotiations and turning the
TPP into the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific
Partnership (CPTPP). The new agreement raises the specter that – rather than the U.S. remaining the
dominant player in Asia – the lead instead could default to China.

On April 11, however, Trump delivered new orders to Lighthizer and National Economic Council
Director Kudlow. He asked them to find ways to reverse his abrupt January 2017 withdrawal from the
TPP negotiations.

Trump’s apparent reversal was celebrated by the farm sector as well as farmer-focused and free-trader
members of Congress who had warned that abandoning the TPP not only risked devastating the already
struggling rural economy but risked a self-inflicted surrender to China. But then, just a few days later,
Trump seemed to signal that he really likes bilateral deals – like one he has been pushing for with Japan
– rather than multilateral agreements like the TPP. Trump tweeted on April 17 that the TPP provided
no way out for the U.S. if it doesn’t work. “I don’t like the deal for the United States,” he said.

The U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) welcomed
the possibility of reviving the full 12-nation pact. “If the United States joins TPP, U.S. wheat should
be able to compete on a level playing field with Canadian and Australian wheat,” said USW
Chairman Michael Miller, a wheat farmer from Ritzville, Wash. He added that rejoining “would keep
U.S. wheat sales that currently represent 50 percent of Japan’s total wheat imports competitive in this
crucial market.”

Representing 140,000 American wheat farmers, USW and NAWG wrote USTR’s Lighthizer in March,
warning that “Lost market share is incredibly difficult to regain.” They pointed out that under new
CPTPP rules, Japan will cut its tariffs on imported Canadian and Australian wheat to $85 per ton
but keep the current $150 per ton tariff in place for U.S. wheat. While the change will phase in over
nine years, the wheat groups said the “loss in market share and its negative effect on farm-gate prices are
likely to come much sooner, as Japanese millers reformulate their product mix to avoid the need to
purchase artificially expensive U.S. wheat.”

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