China may fall short of annual agricultural product purchasing commitments made in its Phase 1 trade deal with the United States due to “non-agricultural trade issues,” U.S. Department of Agriculture Secretary Sonny Perdue said.
“I’m not sure they’re going to make it, but they’re trying,” Perdue said during a town hall meeting with farmers at Edge Dairy Farmer Cooperative. “Non-agricultural trade issues get in the way.”
China committed to importing $36.5 billion in U.S. farm products this year in the trade deal signed in January, but lagging purchases during the first half of the year cast doubt on the goal of increasing imports by more than 50% over 2017 levels.
It was unclear which trade issues Perdue believed were obstacles to the agreement. A series of hurdles have emerged since the Phase 1 deal was implemented, including a threatened U.S. ban on popular Chinese-owned social media app TikTok and an executive order signed by U.S. President Donald Trump ending preferential economic treatment for Hong Kong.
Below is a full rush transcript of the press conference by Secretary Sonny Perdue U.S. Department of Agriculture.
Secretary Perdue: I think we’re in a very pivotal point here about how we produce our food. I think farmers and food producers around the world in both the U.S. and Europe are facing really the same two overarching challenges. And first of all, that’s to produce enough food and agricultural products to meet the needs of growing populations and rising standards of living in a economically – affordability and socially, a supportable standpoint as well as environmental. And secondly, to protect the natural resource base on which the agriculture depends for both current and future production.
So we are anxious to work with our friends in the EU and others to sustainably feed a population of what we expect to be, most demographers expect to be 10 billion people by 2050, even though we may disagree on how to achieve those results. But I do not believe and I want to issue a warning that I do not believe we will be on a track to meet our food needs and develop sustainable farming techniques if we continue to impose policies that stifle innovation.
I’ve asked our economists with USDA to project if the world – all production of societies in the world abided by the Farm to Fork, what would that mean? Their preliminary discussions – and we will be publishing this later – indicate a potential doubling of food prices around the world and increased – creating millions of more people in food insecurity. So from that I feel very strongly, and that’s one of the things that we are trying to have really good discussions about.
I think, again, the warning is we are in a period of surplus now. We’re not always that way. Since 2012 we’ve had good global growing weather all over the globe, and we have surplus commodities now. I think it’s very dangerous to create long-term restrictive policies in times of surplus because we know there will be times of drought and other types of situations that do not lend itself to food production.
Question: What consequences do you see for transatlantic trade if the EU implements its Farm to Fork strategy as proposed ?
Secretary Perdue: I think the impact on transatlantic trade can be extremely problematic. I think, again, every sovereign nation has the right to determine their rules and regulations regarding their food and agricultural production. We do. Europe does. EU does. And that is. But when you try to impose that – those standards on international trade based on subjective matters rather than the definitive health and safety matters, then I think it becomes extremely problematic.
We certainly believe in Codex standards. We believe in health and safety, of limitations of any issues contained in food that may be harmful. We’re big believers in that. But when you move into the methods of production that may be – that are, frankly – much more subjective, then I think that can be quite intimidating to international trade and would not be helpful at all. And I do believe it has the possibility of being contagious into other areas outside the food and ag sector.
Question: Can you tell me if you have expressed this view to the European Commission and to EU politicians and what the reaction has been and what you think is going to be the next step in hopefully liberalizing agricultural trade between the EU and the U.S.?
Secretary Perdue: I have done my best to express this to the EU Commission. I was there earlier this year. I’ve talked about these very things there. I’ve expressed them individually and corporately to those members, and both in writing and in direct communications. I was speaking to one secretary minister yesterday and discussing similar things. So I’ve tried to issue these warnings directly and these concerns directly regarding my belief that this is a very unfortunate policy that will affect international trade, it’ll affect international food production. And the response has been more a populist perspective, is this is what the people are demanding, and this is – we are determined to move this way, which I think is a very unfortunate method upon which to determine food policy.
Question: Will the U.S. accept a post-Brexit trade deal that excludes food and agricultural products that are produced to standards that would not be accepted in the EU?
Secretary Perdue: Well, we are certainly hopeful and are working towards a free trade agreement with the Brexit UK community. We would love to reset the relationship there, them having been, I would say, shackled by some of the EU policies over a period of years. We’re hopeful that they would have a resetting of that relationship that we think would be careful, that would be productive. We are not – absolutely will not agree to policies that restrict our methods of production to any other standards outside of this country. While we will absolutely accede to international standards of health and safety which we believe to be very measurable and objective, we do not intend to abide by any types of methods of production based on perception or anything else that’s not scientific.
Question: Which particular elements of the Farm to Fork strategy are you suggesting are the most detrimental to global food security?
Secretary Perdue: I think the policies that essentially restrict the tools of production. As I’ve indicated in previous comments and in previous discussions with European farmers, if they are held back from using modern technologies of food production which have been fabulously successful in the United States, and we pointed that out using – we’re producing multiple tons of food with less acres. If European farmers are restricted from using the modern tools, as has been stated in the Farm to Fork, we believe it’s misguided and that they will then only have the choice to be protectionist, which never leads to good trade relationships. If they are uncompetitive, if I were a European farmer, I would cry out for protectionism if my government was forcing me to use uncompetitive methods of production. Then my only choice is to be protectionist, which then limits supply and raises prices for our own citizens as well as really citizens across the world, if that.
And if the EU wanted to export those demands to other societies of producers, then, as I indicated earlier, our early indications are that it raises global food prices and creates much more food insecurity internationally. The Europeans may say, well, we’re affluent nations, we can afford that, but frankly, I don’t think that’s the moral, humanitarian way to look at it.
Question: I wanted to ask you about U.S.-Russian commercial and trade ties. President Trump, when he met Foreign Minister Lavrov last December, spoke about his desire to substantially expand the bilateral trade and commercial ties despite sanctions and all of that. So I was hoping to hear your views on that. How – do you see a potential to increase especially trade in agricultural goods and such? What are your thoughts on that?
Secretary Perdue: I’m really unfamiliar with that. The President has never spoken to me about those types of things. And as we – as most everyone knows, our agricultural and food trade with Russia is extremely limited. We do not view them as a major trading partner as we do the EU and UK and Southeast Asia in that regard. We – at one time we were large trading partners. Russia has had a fair amount of success in their own production using modern technologies; where they used to be wheat importers, now they’re wheat exporters. So we view them more as competitors rather than trading partners in food and agriculture.
Question: You were very busy with Brussels media with the New Europe interview a few weeks ago, and the op-ed this week in the EUobserver, and you mentioned the historical transatlantic partnership to address global challenges. So what would be your vision of an EU-U.S. partnership to address agricultural sustainability in developing countries around the world?
Secretary Perdue: Well, first of all, let me state that I think we both mutually have sustainability goals. There may be some different methods to achieve that. My definition of sustainability I have tried to articulate really has three pillars. Initially, environmental sustainability is imperative. No – there’s no way that we can poison the land in order to be able to have that land be productive in the future. So environmental sustainability is a given in that regard.
Secondly, I think we, as human beings and part of a global human brotherhood and sisterhood, have a social responsibility to produce food that can be absolutely affordable and obtained by the – by the global masses. We’ve made great progress in that in lifting people out of food security over the last 40 years, and the U.S. is very proud of its role in helping to do that. International trade does that. That’s what happens. But we see many millions less in food insecurity than we have seen in the past, and frankly, most of that deals with tribal conflicts and war and terrorism in various areas that contribute to that. So there’s a social responsibility of sustainability.
And then lastly, there has to be an economic sustainability for our producers – those people that we call upon for the very noble enterprise of producing our food and that we need to live. They have to make a living as well. We cannot expect them to do this at a loss in that way. So the balance and the equilibrium between environmental sustainability, social sustainability, being affordability for the masses, and economic sustainability for the producers – both small producers and large producers – is absolutely necessary in order to continue the balance of food production as we have known it and the zero tolerance that we have of giving out of food globally.
Question: Do you believe that the proposed greening of the Common Agricultural Policy is fundamentally protectionist in nature, and if so, do you see possibilities for the U.S. to take it or elements of it to the WTO?
Secretary Perdue: Well, if you’re referring to the Farm to Fork strategy or the greening of the Green New Deal that’s being proposed in Europe, I don’t necessarily think that in and of itself it is that, but I think it leads to protectionism. That’s my fear, is that the European producers who are throttled by the inability to use modern agricultural and food production techniques, their only choice in a very competitive world is to become protectionist, and that is to cry out and say, “Don’t let these products come in because they are not produced in the same restrictions that we have to do that.” That’s only reasonable from a production perspective.
So I don’t think the greening in and of itself or the Farm to Fork strategy is protectionist, but it will lead to a cry of protectionism because the effect that it will have will become uncompetitive to the producers, and they will not be able to maintain their economic sustainability in a global world of free trade.
Question: I basically wanted to ask the same question. So do you believe that it’s – that in the end, the United States will have to go to the WTO ?
Secretary Perdue: That remains to be seen. I don’t think we like to threaten about those kinds of things. If the protectionism does come to play in that – in that role, then WTO courts are one avenue. I much more prefer the diplomacy and the persuasion of both agricultural producers as well as European consumers that the choice is really the factor. If we export food to the EU and consumers do not want to choose that because of our methods of production, that’s the market, and we’re comfortable with that. There have been many disparaging comments about the way we produce our food, and I think many of them are inaccurate, unfortunately, because our citizens are really thriving from a healthy nutrition standpoint. In fact, most of the problem is we’ve got more problems with obesity than scarcity. And frankly, the other people – we have millions of people, certainly prior to COVID, that would travel to the United States and enjoy our food and eat heartily, and none the less healthy when they return from that.
So what we’re asking is let the consumers choose. Let the consumers – we believe in transparency of production. We believe in transparency of marketing. We believe in transparency of the labeling of food. But then allow the consumers to be the choice. The consumers are the ultimate guide of these things when we get past the regulatory healthy and safe – health and safety issues there. If they don’t like the way something is done for whatever reasons, be they ethical or any other reason, then they have the power of the purse to withhold their purchasing from that. And that looks like to me, rather than protectionism by – rather than a government saying, “we’re not going to allow these things in because some of our people don’t think they’re produced to our, quote, standards,” then why don’t you let – why don’t you trust the consumers to make that decision?
Question: If there is any regulation which restricts import of products from the U.S. to countries like Georgia due to the pandemic? Georgia is depending on import of wheat currently from Russia, and what’s the perspective on importing this product from the U.S.?
Secretary Perdue: I’m not aware of any restrictions there. Certainly, when we have disease outbreaks such as the African swine fever that we see occurring in Brandenburg in Germany now, people have the right to withhold that for the fear of transmission of disease, when we’ve experienced it. As people may know, we’ve just received our first shipment of beef back from the UK after years over the BSE outbreak. But these things go away.
We’ve had in the United States occasional outbreaks of avian and swine influenza, and we’ve regionalized those and have been restricted over certain exports during those periods of time. But aside from that, as long as it complies with international health and safety standards, I think international trade depends on that objective standard rather than any other kind of issue, be there ideological or populist in belief or any other subjective reason.
Secretary Perdue: I appreciate the opportunity to speak to the European press and I hope that my words convey a willingness to work with our European counterparts in creating a sustainable food production system that can hopefully face those two challenges I mentioned earlier: to produce enough food and products to meet the needs of growing populations and to protect the natural resources based on which we – all producers depend. And I think those are not mutually exclusive, and I look forward to continue working with our European counterparts to achieve that.
