US pork group seeks to regain China and Russia markets

 

 

The National Pork Producers Council (NPPC) vice president and counsel for international affairs Nick Giordano talked about the challenges and benefits of regaining markets in China and Russia at the Minnesota Pork Congress.

 

Trade challenges include the Chinese government's huge subsidies, the country's ban on the feed additive ractopamine and the ban on US pork put in place last year in response to the AH1N1 virus.

 

The country will eventually become open to trade again, Giordano said, because China has a larger population but lesser arable land, adding that the US is well-positioned because it offers the safest pork in the world for the lowest cost.

 

US pork is not being exported to Russia primarily due to the country's allegations of tetracycline residue, but Giordano said these claims have no basis. NPPC wants to not only reach an agreement with Russia, but it wants to increase the US quota share as a condition of World Trade Organization (WTO) accession.

 

NPPC also wants to protect existing trade relationships and is working with countries that have potential for export growth, such as South Korea, Australia, Russia, Canada and Mexico. There is potential to increase sales to Cuba if legislation that removes travel and financial restrictions passes in Congress.

 

Pork producers would benefit if Congress also passed pending free trade agreements with Korea, Colombia and Panama. Korea FTA could be the single, most important trade agreement ever, even exceeding the North American Free Trade Agreement, Giordano said. The country will drop tariffs on all frozen and processed pork products by 2014 and fresh, chilled pork will be duty-free 10 years after the FTA is implemented with a safeguard.

 

Dermot Hayes, an Iowa State University economist, estimates a fully-implemented FTA with Korea would cause US hog prices to be US$10 higher than would otherwise be the case. With Colombia, it is US$1.16 and Panama's estimate is 20 cents a hog.

 

A successful WTO Doha Round agreement with gains for US market access in the EU and Japan would also add significant value to the US pork industry.

 

Additionally, the Obama administration is pursuing a trade partnership known as the Trans-Pacific Strategic Economic Partnership Agreement which would bring the US, Australia, Peru and Vietnam into an existing agreement between Brunei, Singapore, Chile, and New Zealand. Trade relationships already exist for the US with some of these countries, but the big prize is an agreement with Vietnam, Giordano said.

 

He listed the EU, Canada and Brazil as the US pork industry's biggest export competitors.

 

 

The differences between exports in 2008 and 2009 were primarily made in China/Hong Kong and Russia.