Former USTR Crowder: Everyone prepares for the worst
The Trump administration’s trade rhetoric is leading both American farmers and their customers around the world to prepare for the worst outcomes of negotiations, Richard Crowder, the U.S. chief agriculture negotiator in the latter part of the George W. Bush administration, said Wednesday.
“Creating uncertainty for your customers is never a good thing in the business world,” Crowder said. “Everyone prepares for the worst.”
Chinese tariffs on U.S. agricultural products and a withdrawal from the North American Free Trade Agreement may not happen, Crowder said, but U.S. corn has already lost 8 points of market share in Mexico.
“What I am concerned about is a trade policy induced-competitive disadvantage as a result of us falling behind in in tariff reduction schedules,” he said, noting that agreements often take six years and then there is a 15-year implementation schedule.
If China imposes a 25 percent tariff on ag products, then the United States is disadvantaged against Brazil. The European Union and Australia have signed free trade agreements with Japan, which gives EU pork and Australian beef an advantage. If the United States withdraws from NAFTA, he said, the EU will take that dairy market.
“For those of us who not only remember but lived through the grain embargoes these scenarios are pretty scary,” Crowder said.
Of the Trump administration’s statements that it will use the authorities of the Commodity Credit Corporation to compensate farmers for a one-time trade loss, Crowder said, “Prediction if it is bad enough to be compensated for it will be more than a one-time event.”
World leaders conclusions’ that the economic consequences of failing at trade negotiations “aren’t acceptable,” are reasons for optimism he said, but the conflicts between the United States and Canada over dairy and the conflict with China over intellectual property are “troubling.”
Crowder, who has been in the seed business, said he agrees with Greg Doud, the current chief agriculture negotiator who was on the panel, that Chinese demands for intellectual property includes agriculture, particularly seeds, are a big issue and noted there have been cases about Chinese theft of germplasm in the U.S. courts.
Al Johnson, another former chief agriculture negotiator, said that U.S. company executives raised the issue of Chinese demands when he was at USTR from 2001 to 2005.
Johnson praised the Trump administration for addressing the issue of intellectual property but said dealing with the issue is “not going to be smooth sailing,” even if the Chinese want to deal with it because it will be hard for the Chinese to reform their own practices in this area.