Outstanding in the Field Podcast

Summary:

Hearing things about the United States-Mexico-Canada Agreement (USMCA), but want to know the REAL story about where it is in the legislative process and the anticipated impact on our grain industry? Listen in as Patrick Wade, Policy Director with Texas Grain Sorghum Producers, sheds light on all the above and more in this educational episode.

What you will learn in this episode:

  • Differences between USMCA and NAFTA
  • The predicted impact of USMCA on on the U.S. grain industry
  • Where USMCA is in the legislative process

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Listen to the podcast:

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Transcription:

Mike Terning: Hello, this is Mike Terning. I’m the host of the Outstanding in the Field podcast show by Greenstone Systems. Welcome to another episode. Today I am pleased to have with us Patrick Wade. Patrick is with the Texas Sorghum Council. Patrick, why don’t you introduce yourself to our audience please.

Patrick Wade: Sure. Thanks for having me on Mike. I am the policy director of Texas Grain Sorghum Producers. This is a role I’ve been in for just over four years now. I manage all of the policy operations for Texas Sorghum, primarily at a state level. I’m based in Austin, Texas where our state legislature is. That’s sort of how I got started in this kind of work. It’s the first kind of work I did for Texas Sorghum when I came on board. I grew up here in Austin. I was born out in Mississippi, but I’ve lived in Austin for most of my life. Not a farm kid but did get involved with agriculture policy where I was at University of Texas here in Austin. I did some work with [Dupance ph?] government affairs team and worked at the Texas legislature with them. Got a chance to meet a lot of different commodity groups and trade associations while I was there including the folks at Texas Sorghum. We got along well, and they needed someone to kind of be in a full time policy role. So they brought me on board. At the time back in 2015 when I started the policy role that they thought it was going to be was about state legislative issues and kind of keeping track of what’s going on in Austin. But over the last few years trade policy has really emerged as something that we’ve been working on.

Mike: Definitely a hot topic, trade policy.

Patrick: Yes sir.

Mike: Yes. Well thanks for that background Patrick. I appreciate that. So born in Mississippi. What part of Mississippi?

Patrick: I was born in Vicksburg, but I only lived there for about six months before we went to the coast for a little bit. Then spent about six years in Meridian, Mississippi. My dad was a minister. So kind of bouncing around churches as we worked his way up, but my whole family is from the south. Alabama and Georgia cover just about everyone on both my mom and my dad’s side of the family. So we left behind kind of joint Thanksgivings and all of that when we made our way over to Texas, but I can’t really complain about being in Austin.

Mike: Yeah. Well it’s a city in Texas I have not been to.

Patrick: You’re missing out. We’re about to bring in everyone from around the country from South by Southwest here in a couple of weeks. Going to do some interesting work with that on a panel about rural broadband expansion as well. That’s a big issue for both state and national policy makers. They’re bringing in some interesting folks from around the ag world to have good conversation on that. So we’re looking forward to seeing everyone come into Austin here in a couple of weeks.

Mike: Yeah. I’ve heard that’s quite a get together there.

Patrick: That’s one way to put it, yes. I also guess would be remiss if I didn’t sort of also explain a bit of my other roles that I have through Texas Sorghum as it relates to trade policy as well. I do a lot of work with the U.S. Grains Council. I’ve been on their advisory team for trade policy for about as long as I’ve been with Texas Sorghum and really had a great chance to learn from a lot of the work that they do around the world about working with our buyers of grain and 30 some odd offices that they have that are really on the ground. I’ve recently kind of taken that to the next level. I had the privilege of being appointed as a cleared advisor on the Agriculture Technical Advisory Committee for grains, feeds, oil seeds, and planting seeds. So I’ll get a chance to kind of help establish our negotiating objectives for future free trade agreements as it pertains to agricultural trade policy.

Mike: Yeah. You’ve gotten around then in your five year/ten year here.

Patrick: I’m just trying to find a niche Mike. I can’t be too much help on the farm trying to help anyone’s sorghum exactly grow much better. So trying to find where I can be helpful.

Mike: Well that’s cool. Thanks for sharing that background. We have a lot of listeners from the upper Midwest. For the benefit of those listeners who have never seen sorghum in the field, can you give us a little background about what sorghum is, how many acres are grown in the United States, how many hundredweights are produced, and kind of where it goes?

Patrick: Sure. Yeah, you bet Mike. Thanks for asking. I guess I can call it milo maybe for the ease of understanding for some of the other listeners. I know my dad spent a little bit of time in Kansas as he moved around as an air force brat. It probably took him one year into this job for him to realize that milo, as the Kansans called it, that was growing outside of his house is in fact the same sorghum that I work with now.

Last year in 2019 we saw about 4.7 million acres of milo around the country. That is down from kind of what we’ve seen on average over the decade. It’s down for something that I’ll probably point to a couple of times throughout this conversation. It’s because of our relationship with China. It’s kind of been turbulent over this decade. Starting in 2013 they were buying roughly one billion dollars worth of sorghum every year. This continued up through 2017/2018. When that was happening, there were upwards of seven million acres of sorghum grown in the country and upwards of 2.5 million acres of sorghum grown in Texas. Texas and Kansas make up about two-thirds of the sorghum production of the country. Last year Texas only accounted for about 1.4 million acres. That’s about 85 million bushels that Texas produced, 48 million hundredweights. That’s about a quarter or so of the national production, which was just under 350 million bushels, 191 million hundredweights.

So typically—and again this is kind of a before China after China split that I’ll be referencing here in a little bit—but the historical uses of sorghum break out pretty evenly into three categories. They were one-third each. One-third was for domestic feed uses for cattle and swine operations; one-third was for the ethanol market. Like corn after the renewable fuel standard started sorghum began selling into ethanol plants. Then one-third historically would go to exports. That would be Mexico was kind of the historical buyer. They do prefer a pretty specific kind of discount. They like to buy about 85 to 90% the value of corn. They’ll weight for the sorghum price to drop to that.  Japan is a historical market as well. Back before China entered in 2013, that was the pretty traditional split for milo around the country. However once China got into the market, they weren’t able to buy much corn because they have a tariff rate quota on corn. So to fill a lot of their grain needs for feed—mostly for their ducks and their swine industries—they began buying as much American sorghum as they could get their hands on. It ballooned—The use of sorghum for export purposes ballooned to about 75% of the national crop from 2013 to 2017/2018 when this trade war kind of began.

So there’s a bit of a split there are far as what the uses of sorghum are but we’re certainly hoping that we can kind of resume our normalized trading relationship with China and reenter that market because it’s really exciting. I mean they did buy it for the traditional livestock feed uses, but they actually a liquor that they make in China called baijiu which is made out of sorghum. They typically use their own domestic sorghum production, some from Australia maybe. I believe these are the right liquors—If you add up gin, rum, tequila, and I think vodka and combine them, still there’s more baijiu consumed in China than all of those other liquors combined. So if things get normalized a little bit we’re looking to really expand on our trade relationship with China and maybe that traditional kind of one-third usage for domestic ethanol and trade would be a little bit disproportionate again.

Mike: Well that’s very interesting. I didn’t realize all of that was happening.

Patrick: Yes sir. It’s an exciting time to do a lot of different commodity work. I think agriculture in general as farmers have kind of realized how commodity prices have been depressed for all the commodities—certainly not just milo—over this last decade that you really have to kind of get creative with some of your end uses. There’s some exciting opportunities around there. I know sorghum fits into this kind of bioeconomy of sort. Using ag products for non-traditional—insulation—or other sort of end uses that you wouldn’t normally think of as being food related and ag related but things that sell at a premium. Again this baijiu opportunity is similar to that. I mean we’re just trying to get creative to help our farmers stay in business here.

Mike: Now with—So just a little bit about the word itself. Why do some call it sorghum and some call it milo?

Patrick: It’s just kind of what you hear growing up on the farm as I best understand it. I’m not sure why Texas is so committed to keeping the name sorghum as opposed to all the other midwestern states that commit to milo. I think milo is a word—It’s some kind of a Portuguese word or something I believe that just kind of stuck with growers. I mean milo as a crop in the Midwest, Kansas especially, is a very old traditional crop. Really in the high plains of the country used to be one of the most planted crops in the entire country. Now it’s about the third most planted cereal grain in the U.S.. The U.S. does produce the most sorghum in the world. I mean it used to be the kind of staple grain crop across the high plains and was until the 1960s or so when some advancements in genetic modification and new technology came about for corn. The yields kind of grew a little disparate between corn and sorghum and folks started shifting over to planting corn instead, but it is an old, old crop. It’s kind of one of the marketing angles that we take a lot with sorghum is that it’s an ancient grain from India. Someone says they found evidence that it was planted 8,000 years ago in India. So it has been around for a while and people have been calling it what their dad and what their grandad called it the whole time.

Mike: Wow. It’s a bit more drought tolerant.

Patrick: Exactly. Yes sir. It uses quite a few inches less of precipitation than corn needs. So you can usually use it on dry land pretty well. Often referred to as a water sipping crop. So yeah especially in the areas where you’re pretty starved for irrigation it works really well in rotation with a lot of those commodities. It kind of helps retain nutrients in your soil a little bit better. It really is a very popular rotation crop for a lot of wheat fallow. Sorghum rotations and then in Texas especially there’s a lot of cotton sorghum rotations that’s really used pretty advantageously to keep soil health up.

Mike: Well great. Well, I do appreciate the background on sorghum or milo. So thanks for that little mini education session there Patrick.

Patrick: Happy to help.

Mike: Well the reason why we’re speaking today is we’re interested in kind of an overview of what the USMCA agreement is going to bring to agriculture in the U.S. here. It was recently signed, and we thought we’d get your take on how you thought it’s going to impact things in 2020 and beyond.

Patrick: Yes sir and the beyond is really the operative word there. I think we’re all pretty excited about what USMCA is going to offer here. In one hand it seems kind of funny to renegotiate an agreement that’s only from 25 years ago. The original NAFTA was ratified in 1993. But if you consider what has changed both in the general sort of our economy at large as far as information and technology goes but also what goes in the agriculture economy and with new technologies emerging in agriculture over the last 15 years. It’s a pretty timely renegotiation to make sure that this agreement that is the most important free trade agreement that we have in the United States, that it’s really ready for the next 25 years and beyond. So that’s some of the comments that I want to get into here in a little bit are really about how the agreement has some provisions in it that really position all three of Canada, United States, and Mexico well to be able to address emerging issues in agriculture and agriculture technology and make sure that we have the framework in place that nothing’s going to sort of catch us off guard.

From a basic overview, the relationships from an ag trading wise that the United States has with Canada and Mexico are essential from a grains perspective. Mexico is the number one buyer of American corn in the world. Canada is overall the largest importer of American ag products. Those are usually more kind of value added products. They also buy a lot of ethanol as well. These were not established relationships before NAFTA. It was kind of a wild west in a lot of ways where there were pretty high tariffs to get into Mexico from a grain supply. They would buy some sorghum, but it was on and off and it was nothing that you could really rely on or count on. What NAFTA did is once it got rid of all of the tariffs for nearly every single ag product to flow between these three countries, it allowed for a really enhanced level of certainty in these relationships. What’s exciting about USMCA is that it builds on the potential for certainty in some pretty unique and I think some pretty effective ways.

Where we are with the agreement right now—You mentioned that the U.S. had signed it. That is true. Mexico has ratified and signed it as well. That was sort of, I guess, the more contentious of the three signatory nations in the agreement. There were some questions that came out late last year after the United States had started the process of moving it through Congress after a pretty prolonged political kind of process. It was a bit of a game of chicken between House Speaker Nancy Pelosi and U.S. Trade Representative Robert Lighthizer with the timing of submitting the documents that were needed to advance it in Congress. House Democrats did want to make sure that they at least left their mark on the agreement in some way. So they spent a lot of time with Mexico working on some additionally stringent labor provisions in there, which was also a part of the original NAFTA negotiation. There was in fact a side letter that was written that was kind of one of the last things required to sort of smooth over some of the dissent about the agreement.

So House Democrats spent a lot of time in Mexico working on some of these extra provisions. Really just focusing on some dispute settlement resolution mechanisms, a little bit better enforceability on wage standards in Mexico, and a couple sort of providing for some U.S. inspectors to be based in Mexico to sort of study the implementation on some of these labor standards. So anyways Mexico agreed to all of that right away. They were waiting for the U.S.. They’ve got a lot of their own priorities. The president, Andrés Manuel López Obrador, has down in Mexico—They really want to focus on domestic policies, and they’ve been waiting for the U.S. to sort of get USCMA done on their side. They’re going to sign on and they’re going to continue buying a lot of U.S. grain products.

Really the ball is now in Canada’s court. Their parliament was not in session while the United States and Mexico ratified and signed off on the agreement over the winter. They are in session now. I mean there will be discussion within the parliament about some of the issues that they have. I know part of the agreement asks them to concede a little bit on their wheat grading standards and not classify American wheat as the lowest level of food grade wheat automatically. Some other labor kind of environmental issues they may raise some flags on, but I have not heard any indication that Canada will not ratify and sign USMCA pretty quickly. I think a lot of people are expecting it to happen late spring. So maybe April or May. Then hopefully once all the little technicalities and little bureaucratic stuff gets taken care of in those couple months after that we should have the agreement in effect by the summer.

Mike: In terms of the unlikely event that Canada would not sign it or go forward with it, what would happen in a nutshell?

Patrick: If they sat on it for a while I think the idea is that it would kind of play out similarly to maybe how it played out here in the U.S. as we waited for a long time, over a year, before the USTR submitted the agreement to Congress for ratification. Throughout the process I know President Trump threatened a couple of times to withdraw from NAFTA, which would have immediately—If that had happened without USMCA taking effect, that would have effectively raised all of the old WTO bound rate tariffs to their levels before NAFTA took effect. So you’re talking 45% tariff to ship corn into Mexico and similar tariffs like that on ag products around the world. I mean Canada and Mexico export a lot of goods to the United States. I don’t think there’s really any way they would put themselves in a position where President Trump might withdraw from NAFTA and then all of a sudden they lose access to their number one export market for a lot more commodities than just agriculture. So I think it’s just a next to 0% chance that they don’t move forward on this pretty quickly.

Mike: It was kind of funny on our country everyone wanted to take credit for it once we ratified it. Normal political moves, right.

Patrick: Oh my gosh. It was wild to see who was excited about free trade agreements and who was ready to take the next steps, but hey look. I think agriculture stayed pretty clear the whole time. It’s the message across every industry I know is do no harm. I think at the end of the day we’ll let whoever wants to take credit for it take credit for it as long as our farmers can keep selling their products.

Mike: Interesting. Well thanks for that recap, kind of a quick touch on it’s history and where it’s at in the legislative process now. Just waiting on Canada to unthaw maybe. In terms of going forward, what impact do you see this happening on our not only milo and sorghum handlers but also on other grains and oil seeds going forward?

Patrick: Yeah I think that’s really the interesting question here because if you go back 25 years and you look at NAFTA and you think what’s going to change. Well, oh my gosh. What isn’t going to change? We’ll now have duty free access to two large relatively wealthy and developed economies. Our farmers will have duty free access to our two most geographically proximate neighbors in the world. The sky was the limit as far as expanding market access before NAFTA came about. This is going to be a little different. We’re not cracking open some new market and generating an entirely new source of demand here.

What I am really excited about with USMCA really is that we’re gonna have, through this agreement, what seems to be a pretty unprecedented level of certainty. Hopefully the certainty will lead to not only assurance that all transactions will be followed through upon but also hopefully in a way because of how interconnected so much of our supply chains are that we can really lower costs for exporters, for shippers, for buyers, for everyone along the process. There are really two provisions within USCMA that I think are going to go a long way in ensuring that certainty and that reliability of these markets. They’re two pretty revolutionary provisions for a free trade agreement to get this specific on.

One will be the sanitary and phytosanitary standards chapter within the agreement, and one is the chapter on biotechnology. This is actually going to be the first ever free trade agreement the U.S. has signed into that has a biotechnology chapter. The Trans-Pacific Partnership did include one. It was not as robust as the USCMA’s, but of course we didn’t sign the TPP. We withdrew from that. So this will be the first free trade agreement that we’ve signed onto that has a chapter to prepare for [inaudible] in it’s own. We’ll look at this SPS sanitary phytosanitary chapter first because I think this is really the biggest part of the agreement as it relates to agriculture. I mean again there’s no real tariff changes that happen but one of the ways that country with whom you have a free trade relationship with or even countries you don’t have a free trade relationship with—One of the ways that the country can raise still a barrier to importing products—With importing products in general you can erect what are called non-tariff barriers, technical barriers to trade. In agriculture that specifically manifests in terms of more often than not sanitary and phytosanitary standards. So standards for pest and disease inspections at the border at the point of import or later on at the end use process.

Countries can often sort of raise maybe unscientific concerns in a way that predicts their own domestic producers of whatever commodity. So three countries in North America, really because our supply chain is so much more interconnected in 2020 compared to 1993, the need for this harmonization of sanitary and phytosanitary standards is really more needed than ever. USMCA does a great job of that. From a broad perspective it continually reinforces the need for every regulation that relates to SPS protocols to be science based. That can sound vague but when it really gets into it having your protocols grounded and commonly accepted internationally standardized science sort of pointing to the same studies that you would rely on and validate, having similar standards. It really goes a long way when you continually point back to is that determination science based. Has that been as thoroughly vetted or is this sort of a shooting from the hip fully justified way of trying to protect your own domestic industry.

Some changes they made to the SPS protocols specifically. Really the biggest one I would argue is the establishment of a rapid response mechanism. This is something that a lot of ag industries push for when the negotiating process was going on with USCMA. Oftentimes when an agriculture product that’s being imported into another country gets an adverse result at its import check—it gets flagged for some kind of sanitary/phytosanitary concern—in the past it could languish there for a while. It could sit there in storage somewhere. No one would be notified. No process for deliberation on this violation really would ever begin. It was a slow time. USCMA providers a very specific timeline. You have five days to notify a party. The party can be the manufacturer, it can be the importer, it can be a straight grain agent, or it can be the exporter themselves, but they have to be notified within five days. This really will go a long way in enhancing reliability, making sure that products get to move at the time that the contract says they’re going to move. More importantly, hopefully down the road it can reduce costs as well. Throughout this whole process they have to be very transparent in the notification. They have to tell exactly what the violation is, which, again, will sort of draw based to this science based standards where within that notification that if they give some reason that’s not grounded in legitimate risk management. I mean the agreement affords some flexibility for countries to protect human and health as they see fit but in a way that won’t cause any undo burden beyond just the bare minimum that they need to do.

So there’s a great example of this actually. The National Grain and Feed Association highlighted—they submitted some very educational marks during the negotiating process for USCMA. One of their complaints was about how Mexico has a zero tolerance policy for any solid contamination and advances for grain exports. That had been quite a bit as a way to shut down corn, milo, other grain imports that Mexico was buying from the U.S. as a way to protect their own domestic industries. NGFA did a great job of highlighting how that’s the exact kind of sanitary/phytosanitary protocol that would not hold up to scientific scrutiny that the USCMA provides for. So within the SPS chapter there’s really a lot of important work that was done to just establish sort of synchronous timelines. Make sure that we’re working the same standards and kind of playing by the same rules here in a way that goes above and beyond not just eliminating tariffs that serve as barriers to market entry but also eliminating these non-tariff barriers.

Mike: Well, that’s great to hear. That element is in place to help our shippers in the U.S. and also the ultimate consumers as well.

Patrick: Exactly. Everyone has helped in this process. I think really it’s often a political move. When a country wants to erect some kind of barrier. I mean they’re doing it because maybe they don’t want to injure domestic farmers for leading purposes or political purposes in some way, but with U.S. industries we certainly have great relationships for Canada and Mexico and all he other markets. They want to get what they paid for because I know they’re a consumer who will eventually be eating that product in some form or fashion one what they’re buying as well and once what they’re selling as well.

So yes, everyone’s going to benefit with this. Again, with interconnected our economies have gotten over these last 20 or 30 years, I mean we all have so much invested in each other between Canada, the U.S., and Mexico. Certainly as someone in Texas I see that a lot firsthand with infrastructure, rails going back and forth across the Texas and Mexico border. We’re really involved with each other in a great way, in a way that sort of keeps us all honest and dependent on each other in the way that good trade relationships can. So yeah. I think we all really stand to benefit from just being able to have more transparent [inaudible] without any violations that may come up. Some of the rest of the provisions in the agreement—like the biotech chapter—do that as well.

Mike: Give us a little more background on that second provision that you find somewhat revolutionary with biotech.

Patrick: Sure, yeah. Absolutely.

Mike: What’s the summary on that?

Patrick: Yeah, absolutely. It is pretty revolutionary to be honest. Like I said there’s never been a chapter like this in a free trade agreement before that we have actually signed into effect that will become sort of the laws of the land. What USCMA includes is really something that goes above and beyond what the Trans-Pacific Partnership had. Trans-Pacific Partnership had a biotech chapter. It was really just for traditional rDNA modifications, your kind of classic GMO related biotech products. However the USMCA actually goes on to include gene editing. So you talk about your CRISPR technology, stuff that’s really going to be the future in a lot of ways of biotechnology products. This agreement makes sure that we have language in there that have our three countries ready to discuss and negotiate and ultimately find consensus on what kind of products we’ll accept for that.

So when I talked earlier about the idea here is what’s exciting us down the road. What’s exciting about what USCMA offers is the future that it can afford or hopefully 25 years from now we don’t have to renegotiate it again. I mean I’m sure some things will change, who knows, but by in large a lot of these ag provisions—and especially this biotech provision—are going to allow for whatever the new developments are of ag technology. It also has another provision within the biotech chapter that encourages cooperation and transparency in the case of what’s called a low-level presence detection. So that’s basically when a small amount of any kind of biotech crop is detected in a larger shipment. It’s detected in a country that’s importing it that hasn’t yet approved whatever that biotechnology trait is. So this has a pretty robust provision within the biotech chapter that provides for negotiation, conversation, and again ultimate resolution about what happens when these low level presences are detected, what your thresholds may be, and charts a pretty clear path for recourse here for countries to work out their differences on what technology they’ve approved, what they have. It also encourages them to all approve the same technologies over time. But, again, does this in a way that hopefully reduces risk in export sales.

That’s what USCMA comes back to again and again is about we know we have something that works here with the grain industry, with all of ag, and with all our industries that we trade with Canada and Mexico with. We know what we have works. This trade relationship is very profitable and very important for all of us involved. So USCMA does a really good job at sort of cementing that by mitigating the risks as best it can when it can and doing so in a way that hopefully allows for continued investment in each other in way that will continue to drive down costs.

Mike: Well that’s very interesting. Do you think there will be quite a few deliberations along the way as biotech evolves with the three partners?

Patrick: Yeah absolutely. That’s kind of become a bit of a proxy battleground with the other countries. The European Union has very, very stringent biotechnology regulations and in a way the United States has sort of been hashing out our differences with the EU in little proxy sort of trade discussions in other countries. I think it’s absolutely going to be something that gets tested pretty quickly. That will be a fascinating test of how well the agreement is written, if it really has the framework to handle this intersection of very wealthy industries and also issues that are pretty deeply held by a lot of governments by how they treat genetically modified organisms and other biotechnologies. So yeah. I think you’ll see a couple of biotech traits and products be challenged early on. I do though kind of think, again, kind of the economics of it all sort of weighs out. At the end of the day I think there’ll be the argument that these products are so safe, these products are so important for the viability of farms that they’re a valuable way out I think.

Mike: Do you know of anything that’s in the funnel right now that would sort of be the first tester?

Patrick: I’m not sure if there’s a docket of sorts right now. I haven’t seen anything that I know would be a sort of test case right now.

Mike: Well I know it sounds like quite an agreement in adding more certainty, as you stated, reliability in the supply chain, and helping reduce the risk for exporters. It sounds pretty exciting. Is there anything that concerns you? Anything on the downside versus NAFTA that you’re seeing?

Patrick: You know there’s been some concerns expressed by industries that I think they’ll be phasing out some of the investor state dispute settlements for the agriculture sector. We weren’t as involved in those conversations as perhaps some other industries are who are kind of more involved in actually seeking out disputes in other countries and trying to settle them through this ISDS panel. I do think that some industries were a little concerned that they might lose the ability to challenge issues in which might have emerged in other Mexico or Canada, particularly Mexico, that would have come up because of investments they had there that weren’t being properly received. I didn’t hear very much—that was a pretty limited section of concerns about that. I think by in large I think most people are just happy to have this done with. Even more so I think a lot of ag industries—and I know the sorghum industry certainly feels this way—are excited to kind of get this done with so we can kind of get back on the offensive for trade policy. We played defense for a couple of years now. It’s good to defense what’s important to us and it’s been good to get some resolution on that, but I think we have some momentum now to really get the ball rolling on pursuing new agreements and working with different parts of the world and really get on the offensive here.

Mike: Do you think having this agreement nearly fully inked will help with momentum as it relates to China or are they completely separate events from your standpoint?

Patrick: No, no, no. I think they’re all pretty related. I think in general the momentum we’ve seen let’s maybe say the last six months or so. It’s been a bit start and stop for some of that time, but between getting a Japan agreement done for agriculture, getting USCMA done and dusted and again expanding on some great agriculture trade we have there. Then it’s a little murky with this phase one China agreement, but it still is certainly a positive step in the right direction. I think they all feed together pretty well in an interesting way.

You kind of look at the framework of what a lot of USCMA was it drew from the Trans-Pacific Partnership Agreement which was—it’s no real secret here. That was an agreement that was drawn up in large part for the U.S. to sort of place some geopolitical strain on China by entering into economic agreements with a lot of China’s neighbors, a lot of countries that are around the eastern Pacific Ocean area that also have relationships with China. So I think between the U.S. Japan agreement was also—I mean Japan was a signatory and still is a signatory to TPP. That built on it in some parts. USMCA took the exact TPP framework, built on it in some parts. I think there’s hopefully some momentum to return to some of those other TPP countries and pursue the agreements with them. If we can do that in conjunction with also negotiating with China in our also very important bilateral trade policy issues, I think you have a chance to sort of juggle all of those together in a pretty fluid and linear way. Hopefully in a way that expands our market access to parts of the world that we don’t currently have.

I certainly look at Vietnam and Malaysia were two countries within TPP that are incredible opportunities for U.S. grain products. Right now there’s some of those same kind of sanitary phytosanitary barriers that we talked about with USCMA doing a great job with mitigating. Those still exist in totality with countries like Vietnam. If we can really prove this is the job of industry and of trade associations and of listeners to this podcast who are involved in their trade associations or in some way of speaking for an industry, it would be great to have agriculture rally around the importance of carrying this momentum forward that we have with this TPP framework and going after countries that represent significant growth opportunities for demand for U.S. grain products.

Mike: Well this has certainly been an interesting discussion, at least from my end. I really appreciate it Patrick the time you’ve given us today and the light you’ve shed on the USMCA agreement here. Before we part ways and end this episode is there anything else that you’d like to inform our listening audience that you haven’t touched upon?

Patrick: No sir. I really wanted to make sure I got out that last point there that, again, this is a big wide world of trade policy. U.S. produces the best ag products in the world. The safest ag products in the world. It’s really a privilege to be able to represent U.S. ag products in these trading relationships because we’re all so proud of what our farmers produce and being able to play a part in that in some way. So it’s just an exciting thing to be a part of. It’s an exciting industry to represent. Hopefully over these next couple of years it will be really constructive as well.

Mike: Yeah we’re all hoping for that and we certainly are blessed with some great land and some great farmers who know how to work it to it’s potential. So let’s hope they get rewarded.

Patrick: We’re counting on it. Hoping for it.

Mike: Yeah that’s right. Well again Patrick we really appreciate your time and sharing your background and your expertise with this agreement. We wish you the best with this upcoming sorghum crop and helping your producers make the most out of it.

Patrick: Thanks for having me on Mike. It was a pleasure talking to you.

Mike: Alright take care.

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