Talking trade

U.S. Sen. Ron Johnson (R-Wis.) hosted a roundtable discussion of the impact of the proposed United States-Mexico-Canada Agreement on agriculture Friday at ABS Global in DeForest.. Nate Zwald, chief operating officer of ABS Global, is pictured to the right of Johnson.

U.S. Sen. Ron Johnson pushed for passage of the proposed United States-Mexico-Canada (USMCA) agreement Friday during a roundtable discussion in DeForest on agriculture.

“It would be a big step forward if we pass the (USMCA),” said Sen. Johnson, speaking to the press after the meeting.

The event took place at ABS Global, as leaders in agriculture from around the state gathered to talk about trade.

There was another roundtable that afternoon at the Waukesha County Technical College in Pewaukee, where the impact of the USMCA on manufacturing was debated with leaders in the auto parts industry.

Negotiators from all three countries have agreed to the USMCA, finishing their work on Sept. 30, 2018. But, Congress must ratify the deal for it to be finalized.

As he encouraged farmers and those in attendance to press members of the Democrat-controlled House of Representatives to ratify the USMCA, Sen. Johnson said, “We’ve got to defend trade.” He also emphasized the importance of the U.S. trade relationship with Mexico and Canada in his comments. Wisconsin’s food and beverages exports to Canada and Mexico have increased by nearly 70 percent over the last decade. Canada is the leading export market for U.S. food and agricultural products, while Mexico ranks third. China is second.

“It would have to be a pretty bad deal for me not to support it,” said Johnson.

Johnson also said he would have kept the North American Free Trade Agreement in place, referencing former independent U.S. presidential candidate Ross Perot and his famous quote about that “giant sucking sound.”

Johnson said, “The only giant sucking sound was exports leaving the U.S. for Canada and Mexico.”

Dave Daniels, of Mighty Grand Dairy In Union Grove, said, “We don’t want to go back to the way it was pre-NAFTA.”

Johnson acknowledged the heavy burden Wisconsin farmers have experienced in recent years. He said there’s been a fair amount of short-term pain inflicted on farmers and some of that could be permanent.

Chris Pollack, co-owner of Pollack-Vu Dairy in Oshkosh, talked about how the dairy industry had endured three to four years of tough prices for the dairy industry and how tariffs imposed by President Trump made the situation more daunting.

Pollack said farmers have been putting off projects to enhance their businesses until things turned around. He said it’s taken a toll mentally on farmers.

“When you’re not making progress, it’s hard to get up in the morning,” said Pollack.

Nate Zwald, the chief operating officer of ABS Global in DeForest, said it’s been a challenging four to five years for his business. ABS Global provides bovine genetics, reproduction services, technologies and udder care products to customers all over the world.

“We sell to almost 100 countries, so it’s important from our business perspective that these markets be open,” said Zwald.

Johnson said he was surprised to see how much support there was for what President Trump is trying to do to even the playing field for the U.S. with regard to trade, particularly as it pertains to China. He said trade abuses by China justify the strong reaction by the U.S.

“We’re kind of in a trade war with everybody,” said Johnson.

Johnson said the U.S. has been generous with other countries when it comes to trade.

“There has not been reciprocal treatment around the world,” said Johnson.

Daniels agreed that something had to be done.

“I don’t like tariffs, but they’re the only thing we had in our back pocket,” said Daniels.

To Johnson, the USMCA is the most important agreement moving forward. The deal will create new market access for U.S. exports to Canada of dairy, poultry and eggs, while the U.S. would allow Canada new access for dairy, peanuts, processed peanut products and a limited amount of sugar and products containing sugar. Also, all food and agricultural products that had no tariffs under NAFTA would continue to have zero tariffs.

As far as dairy is concerned, the U.S. would be able to export the equivalent of 3.6 percent of Canada’s diary market, an increase from the existing level of 1 percent. Also, Canada would get eliminate the “Class 7” pricing systems that was seen as putting U.S. farmers at a disadvantage.

In the first quarter of 2019, Wisconsin reportedly exported more than $800 million in agricultural and food products to 147 countries. That’s a 4.8 percent decrease from the same period a year ago, representing $40 million in value, as total U.S. agricultural exports declined by 4.57 percent, or $40.8 billion.

Ruedinger asked, “Why wouldn’t Democrats and Republicans come together to solve this?”

Johnson explained how the philosophies of the two parties on trade issues have aligned.

“Traditionally, Republicans love open markets, and Democrats like tariffs,” said Johnson. “Now, both parties are not opposed to tariffs. There’s way too much trending toward protectionism on both sides.”

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