Perdue talks trade aid, EU, Puerto Rico after Argentina
August 1, 2018
Agriculture Secretary Sonny Perdue said today that farmers should not expect to be "made whole" from lost income under the $12 billion in aid the Trump administration has promised to make up for lost exports caused by retaliatory tariffs other countries have imposed after the United States imposed tariffs on imported steel and aluminum.
"I liken it to an insurance claim," Perdue said in a telephone call to reporters from Puerto Rico, where he is traveling after a trip to Argentina for a meeting of G20 agriculture ministers.
Most people who have a car crash or a house fire and get an insurance payment do not feel they have been made whole, he said, and farmers should not expect to be made whole in this situation.
And so a farmer who sees a $2 per bushel drop in the soybean price should not expect a $2 mitigation payment, he said.
Perdue told Reuters in Buenos Aires he estimates the direct payments will total $7 to $8 billion.
USDA Chief Economist Rob Johansson has developed a computer model that can differentiate between regular market activity and the impact of the tariffs on prices, Perdue said.
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Details will be released in late August on how payments will be calculated, but the administration's goal would be to have the trade conflicts resolved "and the markets rebound," he said.
Perdue's statement came amidst reports that the United States and Mexico are trying to complete North American Free Trade Agreement negotiations before the end of August and hope that Canada will join them, but Perdue did not address the NAFTA issue.
The secretary noted that direct payments will go to the producers of the Title I crops and dairy and hog producers. But the dairy and hog producers and the growers of specialty crops also will benefit from government purchases to take their products off the market, Perdue said.
He also noted that there will be more money for the trade promotion programs to try to develop markets to make up for the loss of those that have imposed retaliatory tariffs.
Regarding reports that the European Commission could not really promise to buy more soybeans since the private sector makes those purchases and the EU does not have tariffs on soybeans, Perdue said the EU has nontariff barriers that help guide the private sector.
Perdue said that during the meeting in Buenos Aires he had also spoken with European officials about geographic indicators, the European system that allows products to use a place-related name only if they are produced in those places.
Perdue noted that other countries have agreed to include the geographic indicators in recent trade agreements with the European Union and said he delivered a message that "We are sending the signal to our trading partners that this is not acceptable, that we don't plan to comply with that."
He did not elaborate on what he meant by not complying, but said that the European Union "wants to patent or trademark" names that Italian immigrants brought to the United States 100 years ago.
Perdue said he was unaware of statements by European officials that they do not expect the negotiations to which President Donald Trump and European Union President Jean Claude Juncker agreed last week to include agriculture, but he said he expects they will.
On his way home from Buenos Aires, Perdue has stopped in Puerto Rico, where he will inspect USDA's activities to help with hurricane relief and meet with Puerto Rican officials.
USDA said in a media advisory that Perdue will visit Vaqueria Ceiba del Mar Dairy in Hatillo and the Granja Avicola Pujol egg farm in San Sebastian, and participate in a town hall discussion with local farmers and stakeholders in Ares.