Page 38 - Export or Bust eBook

EU Agriculture Commissioner Phil Hogan added: "This agreement proves yet again the value of the
EU leading from the front globally … This deal is very positive for our agri-food sector, creating
new export opportunities for our high-quality food and drink products, which in turn will support
more jobs and growth, particularly in rural areas."

It’s not just the budding ties between South America and Europe that are hobbling U.S.
exports. The U.S. would like to sell a lot more wheat to Brazil - a major importer of the grain - but
Brazil continues to favor its Mercosur neighbor, Argentina.

Preferential Mercosur tariffs, proximity and abundant harvests continue to assure that Argentina will not
be giving up its share of the Brazilian import market anytime soon. Argentina is projected to reap a
record-high wheat harvest this year of 20 million tons, according to a new analysis by USDA’s Foreign
Agricultural Service.

That harvest is expected to spur record high exports of 14.2 million tons, about 40 percent of which will
go to Brazil.

Asian countries take notice

In March, South Korean Prime Minister Lee Nak-yon agreed with Brazilian President Michel Temer to
start formal negotiations for a free trade deal between South Korea and the Mercosur bloc by June. The
pact would likely be designed to increase South Korean exports of consumer electronics and auto-parts
and boost Mercosur's shipments of corn, soybeans and other grains.

At the same time, China is moving quickly to expand its influence in the Pacific Rim and around the
globe. While the U.S. was severing ties with the Pacific Rim by withdrawing from the Trans-Pacific
Partnership (TPP) last year, China continued to negotiate a separate multilateral pact.

China’s Regional Comprehensive Economic Partnership (RCEP) with the Philippines, Japan, Australia,
India, South Korea, New Zealand, Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Singapore,
Vietnam and Thailand isn’t the country’s only outreach plan designed to counter U.S. influence. Chinese
President Xi Jinping proposed his Belt and Road Initiative (BRI) in 2013 to build new trade and
infrastructure networks.

So far about 80 countries have signed up as part of China’s efforts to diversify its sources of food,
technology and energy trades, according to recent presentation by Erin Ennis, senior vice president of
the US-China Business Council.

And China has invested heavily in Brazil by funding projects such as a new “super port” in Rio de
Janeiro, which officials say is being used to send mostly petroleum products to Chinese buyers.

In March, a consortium led by the China Communications Construction Company (CCCC), in
association with Brazilian companies WPR and Lyon Capital, began expanding the port of São Luís in
the northeast state of Maranhão, Xinhua news agency reported.

Port construction is expected to take four years, cost $245 million (US), create 4,000 jobs and allow
Maranhão to increase its capacity to export grain to Asia, Europe and Africa.

36 www.Agri-Pulse.com