READ the NAFB’s National Ag News for Thursday, November 1st
Sponsored by the American Farm Bureau Federation
Steel and Aluminum Tariffs Cancel Benefits of USMCA
Steel and aluminum tariffs by the U.S. will hurt agriculture more than NAFTA 2.0 will help. The updated North American Free Trade Agreement, known as the U.S.-Mexico-Canada Agreement, would grow U.S. agricultural exports by $450 million a year, according to the Farm Foundation. However, the organization says the retaliatory tariffs in response to the tariffs that President Donald Trump has imposed on steel and aluminum will cause U.S. exports to Mexico and Canada to decline by $1.8 billion. Those figures were presented in an analysis by Perdue University Wednesday. The report says, according to the Hagstrom Report, that with continued retaliatory tariffs from China and other trading partners, “the United States would see a decline in agricultural exports of $7.9 billion, thus overwhelming the small positive gains from USMCA.” However, those close to the Trump administration expect the steel and aluminum tariffs will be removed at a later date, before the USMCA is put into effect.
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Vietnam Winning U.S.-China Trade War
Vietnam is emerging as the winner of the U.S.-China trade war. A new analysis by the American Chamber of Commerce in South China shows companies in China and the U.S. are losing market share, especially to companies from Vietnam, as a result of the trade war. Companies in China also report they are losing sales to companies from India, the U.S. and South Korea. For U.S. companies, the next rivals taking market share are Germany and Japan. The tariff situation could get worse if the Trump administration moves ahead with more tariffs in December against China, pending the outcome of talks at the G20 summit. U.S. soybean farmers or feeling the brunt of the trade war as China has steep tariffs on U.S. soybeans, and other agricultural products. President Trump said last week that the effort would take time, indicating no immediate end to the action.
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Trump Administration Plans Hearing on Trade with Japan
The Trump administration will hold a hearing in December to help craft negotiating objectives for a trade deal between the U.S. and Japan. A recent Federal Register notice seeks public comment with a deadline of November 26th, and a hearing scheduled for December 10th in Washington, DC. The U.S. Trade Representative’s Office is seeking the comments to develop U.S. negotiating positions. USTR specifically is seeking comments on product-specific negotiating objectives, trade barriers, economics, sanitary and phytosanitary measures, and on measures or practices that undermine fair market opportunities for U.S. businesses, workers, farmers, and ranchers that should be addressed in the negotiations. Japan has previously sought to enter a trade agreement through other means, instead of a bilateral agreement, in an effort to protect its agriculture industry from United States agriculture.
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Updated TPP to Take Effect This Year
The Trans-Pacific-Partnership replacement that does not include the United States will take effect at the end of this year. Australia and Canada filed ratification documents this week for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, kicking off a 60-day waiting period before the agreement takes effect, as now six countries have ratified the deal. President Donald Trump removed the U.S. from the agreement upon taking office, opening a new era of trade policy for the U.S. focusing on bilateral agreements and aggressive negotiations. The Wall Street Journal reports backers of the agreement say it may be the most important trade agreement reached in more than two decades, modernizing agreements to reflect the rise of digital trade, services and copyright in a fast-growing region. The trade deal puts U.S. agriculture at a competitive disadvantage as it phases out ties on sensitive products such as agricultural imports in countries including Japan and Mexico.
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Fixed 5G Wireless Not Likely to Bridge Urban-Rural Divide
Fixed 5G wireless is an unlikely candidate to solve rural America’s broadband challenges, according to a new report by CoBank. Rural telecommunication providers have identified 5G fixed wireless as a potential option. However, the report says high costs, competition, spectrum propagation and ecosystem headwinds stand in the way. Verizon is implementing 5G in urban markets, but a CoBank spokesperson says “they are facing operational and technical issues that will limit the scale of its 5G fixed wireless deployments.” Because of the technical issues, CoBank says “we don’t see the use of millimeter-wave spectrum in fixed wireless networks extending to rural markets.” There are measures underway that will open opportunities for some rural network deployments. However, uncertainties related to the cost of acquiring licensed rights could be problematic. Further, the report says that Verizon, the leader in 5G fixed wireless, faces stiff competition from cable operators in urban and suburban areas, which presents a challenge to offer a competitively priced product while maintaining profitability.
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USDA Announces Rural Job Training Grants
The Department of Agriculture is investing $39.6 million for 128 projects to increase access to job training, educational and health care services in rural areas. Announced by Agriculture Secretary Sonny Perdue, the grants stem from the Distance Learning and Telemedicine Grant Program. More than 4.5 million residents in 40 states and three territories will benefit from the funding. Perdue says distance learning and telemedicine technology “bridges the gap that often exists between rural communities and essential education, workforce training and health care resources.” The assistance supports infrastructure improvements, business development, housing, community facilities such as schools, public safety and healthcare, and high-speed internet access in rural areas. For more information and a list of projects, visit www.rd.usda.gov.
