GLYNDON, Minn. - Vice President Mike Pence, standing with farmers at a sugar beet and crop farm in Clay County, Minn., delivered a simple message, aimed at Rep. Collin Peterson, D-Minn., regarding the U.S. Mexico Canada Agreement.
"We're grateful that Congressman Peterson is supporting USMCA. But I think it's absolutely essential that Congressman Peterson, who chairs the House Agriculture Committee, carry the message of agriculture here in Minnesota and across America, to the Democratic leadership in the House," Pence said Thursday, May 9.
Pence said he believes that if U.S. House Speaker Nancy Pelosi puts the trade agreement to a vote, it'll pass.
"It is a win for American farmers, a win for American workers, and American manufacturing and jobs," Pence said from R&J Farms, operated by Ray Johnson, his wife, Jo Lyn, and their son, Ryan.
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Pence said he particularly came with a message to "my good friend" Peterson, to put pressure on the Democratic-controlled House to put it to a vote.
The Pence event was staged with groups of farmers and FFA members as Pence made a brief statement, followed by a short news conference.
Kevin Paap, president of the Minnesota Farm Bureau, which organized the farmers from throughout the state, said he had notified Peterson of the event as a courtesy, but that Peterson had to decline because of a hearing on the troubled farm economy. Peterson's office said the vice president's office did not invite him and Peterson was not aware of the trip until Wednesday.
Peterson, who represents western Minnesota, sent out a press statement as the event was in progress, saying he was glad Pence was coming to see "firsthand the importance of the sugar industry," for which Peterson is a champion. (Pence opposed sugar policies while serving as congressman in Indiana.)
Asked whether Pelosi is withholding the USMCA vote because she thinks it won't pass, or that it will pass. "I don't make a habit of speculating about why Congress is hesitating, OK?" Pence replied.
Asked if Peterson has already applied as much pressure as possible on the USMCA, Pence said, "That would be a good question for you to ask him."
In his press statement, Peterson noted he was "the most senior Democrat in support" of the USMCA.
Representatives of the U.S., Mexico and Canada struck a deal Sept. 30 intending to replace the North American Free Trade Agreement of 1994.
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USMCA is designed to support mutually beneficial trade, leading to freer markets, fairer trade, and robust economic growth in North America. The three countries have a total of $80 billion in ag trade. Some analysis indicates that ag exports could rise under the new deal. A Purdue University study says the agreement could increase ag trade by $454 million.
The agreement awaits ratification in the U.S., possibly this summer.
Peterson earlier has said he isn't convinced the votes are there for the House to pass it. Many new members of the House have not voted on a trade deal.
Paap said it is important to get the deal done before the presidential election campaign heats up.
'Always hopeful'
Most of the farmers at the Pence event talked about the challenges they face in farming, and input costs, as well as low prices in part due to trade disruptions.
Mark Harless, a Borup, Minn., farmer who raises dry edible beans, soybeans and corn, emphasized that 60 percent of the black beans that farmers produce have to go to Mexico. "It's vitally important that we keep that market open," he told the vice president. He said markets need certainty, and "as long as USMCA isn't ratified, there is uncertainty." He said agricultural trade "shouldn't be a political issue."
He said that "being a farmer, I'm always hopeful" about a positive resolution to the Chinese trade issues.
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Other trade issues
USMCA wasn't the only trade issue on the minds of farmers.
Chinese Vice-Premier Liu He arrived in Washington, D.C., Thursday for a two-day negotiation session. President Donald Trump tweeted there would be increased tariffs on another $200 billion of Chinese goods, blaming Chinese backsliding for preventing an agreement. The new rate would be 25 percent-up from the previous 10 percent rate, established last September.
"We're prepared to expand on the tariffs that we've implemented, because things have to change in our relationship with China," Pence said, noting they account for half of the U.S. trade deficit. "We're hoping that they're coming to make a deal. That would have an immediate impact on the need for additional support," Pence said, but said the administration hasn't decided on any more payments for farmers - for now.
"Make no mistake about it: we have already had preliminary discussions for additional support for farmers if this impasse with China continues," he added.
Pence acknowledged that countries have announced retaliatory tariffs on exports from the U.S. because of Section 232 tariffs on steel and aluminum.
Pence told farmers they can still be optimistic, despite brinksmanship between the U.S. and China over trade, and the difficulties in getting congressional ratification of the USMCA.
New NAFTA
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U.S. farmers were part of the economy that had benefited from NAFTA. In what's called the USMCA in the U.S. (sometimes "New NAFTA") the three countries have reached an agreement on intellectual property. It includes environmental and labor regulations.
For agriculture, it increases tariff-free access to 3.6 percent of Canada's $15.2 billion dairy market, up from 3.25 percent. It retains NAFTA's zero-tariff platform for other ag products.
The agreement is promoted by the U.S. trade representative as providing "strong protection" for "agricultural innovators" including for biotechnology and gene editing. It also includes digital trade rules, as well as privacy. One of the farmers said he is grateful that the USMCA removes some barriers to how U.S. wheat can be exported into Canada.
Canada and Mexico are the first and third largest export markets for U.S. food and agricultural products, making up 28 percent of total food and farm exports in 2017. The exports support more than 325,000 American jobs.
The USMCA will increase U.S. exports to Canada for dairy, poultry and eggs. The U.S. will provide new access on dairy, peanuts, processed products and a "limited amount of sugar and sugar containing products."
Ray Johnson, the farm host, said the U.S. sugar industry is in favor of USMCA passage because it's good for agriculture as a whole.
Ken Martin, chairman of the Minnesota Democratic Farmer-Labor party, put out a statement, saying that Pence was in Minnesota to put a Band-Aid "over the massive wounds his administration has afflicted on Minnesotans across our state."
This report has been updated with more information about why Rep. Collin Peterson was not in attendance.
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