Trade obstacles persist for U.S. pork

Last Thursday, Apr. 18, the U.S. International Trade Commission (USITC) released its report on the impact of the United States-Mexico-Canada Agreement (USMCA). Ratification of the free-trade agreement (FTA) could improve the situation for U.S. pork exports, which have seen a sharp drop this past year due in large part to Mexican tariffs of 15 to 20 percent. However, the pending ratification of the “New NAFTA” may not happen until 2020 due to political opposition and time constraints among the three countries.

As the pork industry waits to regain greater market access to Mexico, the pressure is on the Trump administration to resolve the trade conflict that began last year. Mexico is the largest destination for U.S. pork by volume and accounted for 32 percent of exports in 2017. Exports began seeing notable year-on-year declines during the second half of 2018, and export pace was down over 15 percent over January and February.

U.S. monthly pork exports to Mexico


Source: USDA, McKeany-Flavell

Pork producers are also pressuring trade officials for improved access to their number-two market, Japan. In February, Japan imported 14 percent less U.S. pork YOY, sourcing more from the EU, Mexico, and Canada. This can be attributed to the U.S. abandonment of the Trans-Pacific Partnership (TPP)—and U.S. absence from its 11-nation successor, the CPTPP or TPP-11—and to the Japan-EU Economic Partnership Agreement (EPA), which entered into force in February. President Trump is meeting with Japanese Prime Minister Shinzo Abe later this week to discuss economic matters, with the White House hoping to pursue a quick win in the form of a bilateral FTA.

U.S. monthly pork exports to Japan


Source: USDA, McKeany-Flavell
Posted by: Information Services
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