Agriculture

USMCA, phase one China deal "good long-term for ag"

U.S. Representative Darin LaHood shakes Bobby Baker's hand at the Adams County Farm Bureau on Friday, Jan. 3, 2020. Congressman LaHood visited Quincy to discuss the impact that the United States-Mexico-Canada-Agreement and Phase One Trade Deal with China will have on Illinois farmers and manufacturers. | H-W Photo/Katelyn Metzger
Katelyn Metzger 1|
By Herald-Whig
Posted: Jan. 4, 2020 12:01 am

QUINCY -- Two new major trade agreements set the stage for more stability for the area's farm economy.

The new United States Mexico Canada Agreement "equals jobs and economic opportunities for our farmers, agribusiness and our manufacturers. USMCA is good for the country," U.S. Rep. Darin LaHood said.

LaHood met Friday afternoon at the Adams County Farm Bureau with local farmers, grain merchandisers and officials with Quincy, Adams County, the Great River Economic Development Foundation and the Quincy Area Chamber of Commerce to talk about USMCA and a phase one agreement with China.

"America represents 4.5% of the world's population. We have to have markets and customers around the world," LaHood said. "This trade agreement is good long-term for ag, good for a lot of other things."

The China agreement, expected to be signed on Jan. 15, calls for the Chinese to buy $80 billion in U.S. commodities over two years.

"Twenty-five percent of the soybeans grown in Adams County go to China every year. That market opens up. That helps our farmers," LaHood said.

Positive trade news provided a good way to start off the year for the area's agricultural community after a stress-filled 2019 with planting and harvest delays, wet weather and price concerns.

"The new USMCA shows some stability that hopefully grain markets will respond to, and reopening some trade avenues with China will be really helpful to grain markets as well. Ultimately exports is what drives prices farmers receive for the commodities they grow," Adams County Farm Bureau Manager Shawn Valter said.

Even more important, LaHood said the agreements set the stage for the future, including agreements with England, expected within the next six months, and then with Brazil.

"Building upon USMCA and the standards we set in here will be a good benchmark and threshold for trade agreements down the road," LaHood said. "What it shows our allies around the world is we can negotiate a good trade agreement with our two largest trading partners."

Mexico, Canada and China are Illinois' three largest trading partners. Forty-three percent of what Illinois grows, produces or manufactures goes to Mexico or Canada. About 10% of the state's exports go to China, with nearly 25% of the state's agricultural exports going to China.

USMCA, basically a rewrite of the North American Free Trade Agreement adopted in 1993, is expected to bring over $68 billion in new economic activity, add 176,000 new American jobs and for the first time open Canada's markets to American dairy, wheat, chicken, egg and turkey producers.

"We want a little better markets than what we got," Mendon farmer Bob Schoch said.

"The message we want to give (LaHood) was that we want him to know the president has our full support in trade negotiations," Coatsburg farmer Louis Janssen said. "We do want to see something get done."

The phase one China deal requires reforms in intellectual property, technology transfers, agriculture and financial services, expands access to U.S. goods and services over the next two years for import to China and reduces tariffs.

Ensuring the Chinese are held accountable will be the goal in the next phase, but the first phase agreement "sends a message we can negotiate with the Chinese," LaHood said. "It's not perfect, but it's very, very good for agriculture."

Meeting with LaHood also provided an opportunity to raise other issues important to the farm community including flood control and river transportation, including upgrades to the lock and dam system.

"All that plays a part in the exports he's here to talk to us about. We have to have a river transportation system in place to get locally grown commodities down river," Valter said.

"It's great that he's coming out and listening, not only giving us an update but getting an update from us of what we expect from him when he's in D.C."