June U.S. exports of $150.5 billion and imports of $200.3 billion resulted in a trade deficit of $49.9 billion, the highest in nearly two years. June exports were down $2 billion from May, suggesting difficulty in reaching the Obama administration’s goal of doubling U.S. exports in the next five years.
Agriculture Secretary Tom Vilsack said this week that goal is an economy-wide standard that will vary from one sector of the economy to another. Ag exports, he said, would not necessarily double although demand for U.S. ag products will continue to be strong. The current year will probably be the second-best ever for U.S. ag products, he said.
But not all will be smooth sailing.
Canton, Miss., producer Danny Murphy, representing the American Soybean Association this week before a Senate committee, said, “Efforts to achieve this goal in the agriculture sector will require congressional approval of the pending Free Trade Agreements with Colombia, South Korea, and Panama, negotiation of new FTAs with key importing countries, and progress on the Asia Pacific Economic Cooperation regional agreement.”
Delay in approving the Colombia FTA has caused U.S. soybean producers to lose over 50 percent of their market share, he said.
“Action is needed on legislation to normalize financial relations with Cuba. Normalizing financial relations would improve the competitiveness of U.S. soy and livestock product exports to the Cuban market,” he said.
U.S. rice producers have been a strong voice in opening up the Cuban market.
U.S. ag exporters also will need help in knocking down barriers to their products imposed by foreign governments.
This week Sens. Blanche Lincoln, D-Ark., and Saxby Chambliss, R-Ga., both members of the Senate Agriculture, Nutrition and Forestry Committee, criticized the Russian government for its failure to resume U.S. poultry imports.
'Arbitrary trade barrier'
“Russia’s refusal to resume poultry trade with the U.S. demonstrates a serious lack of commitment to the agreement reached by the two countries in June,” Lincoln said. “By creating an arbitrary trade barrier, Russia continues to hamper progress in U.S.-Russian relations.”
U.S. poultry exports were barred from entering the Russian Federation in January because of concern about the use of chlorinated water in pathogen reduction treatments in American poultry processing plants. U.S. poultry processors agreed to discontinue the use of chlorine, and Russia agreed in June to resume imports, but a new barrier has since been erected.
Over the last three years, U.S. poultry exports to Russia averaged more than $800 million in value. In Arkansas, the Russian poultry market has been worth as much as $100 million a year, contributing to 88,480 or nearly 6 percent of all jobs in the state, according to Lincoln.
And there are inequities with other trading partners. The United States last year sold $700 million worth of ag products to India. At the same time, however, India sold $1.4 billion worth of its ag products to us.
India has closed its doors to many U.S. ag products, claiming plant and animal health restrictions. U.S. exporters and trade officials, however, say many of the restrictions are not science-based. And, says a USDA official in New Delhi, India has a stated commitment to protect its 100 million small farmers.
Ag exports are vital to the U.S. economy, and farmers here have proven they can help meet the world’s growing need for food, fiber and feed.
But approaching anything near doubling up is going to require that international trade is truly a two-way street and that governments here and abroad don’t make the job more difficult than it need be.