MEAT OF THE MATTER

Effective May 20, 2019, zero-tariff pork trade with Mexico was restored. The punitive Mexican tariffs on pork were taking $12 off the price of every hog sold in the United States, according to Iowa State University Economist Dermot Hayes, representing a total annual cost of $1.5 billion. The decision by the United States to lift tariffs on Mexican and Canadian metals is obviously very important to the bottom line of every producer in the nation and was the culmination of what has been NPPC’s most active advocacy effort over the last year. With the support of its members, NPPC dedicated considerable resources to influencing the end of a trade dispute that has significantly disrupted exports to U.S. pork’s largest market.

With the Trump administration undertaking a major realignment of global trade strategy, employing hardball negotiating tactics, the producers of one of America’s most competitive export products, hog farmers, found themselves at the tip of the trade retaliation spear. In response to U.S. metal tariffs, Mexico imposed 10 percent punitive tariffs in early June 2018, escalating to 20 percent tariffs in July of last year. A steady decline in the value U.S. pork shipments to Mexico followed.

The removal of metal tariffs on Mexico moved to the top of a long list of trade related NPPC issue management priorities. In a challenging political environment, maintaining ongoing dialogue with the administration not only on this issue, but a host of others – including a new trade agreement with Mexico and Canada, China trade retaliation and the importance of a bilateral agreement with Japan – was critical. NPPC employed a strategy that included direct outreach to key trade policy influencers, coalition partnerships and a public awareness campaign to keep the interests of U.S. pork producers top of mind.

Patriot Farmers at the Tip of the SpearIn a letter to President Trump in June 2018, when the trade dispute with Mexico began, NPPC President Jim Heimerl wrote:

Our producers, the vast majority of whom voted for you, recognize the many interests you are balancing in setting U.S. trade policy. We understand that putting trade at the center of national security and foreign policy, redefining the trade relationship with China, and, modernizing the NAFTA are very complex matters. Unfortunately, this realignment of U.S. trade policy objectives is happening at a time of significant investment and record pork production in our industry.

American pig farmers are patriots who are demonstrating enormous commitment to the greater good of our country as they shoulder a disproportionate share of trade retaliation against the United States. We literally are at the tip of the spear as your administration redefines U.S. trade policy objectives. Our producers appreciate that you, Vice President Pence and Secretary Perdue have made it clear that you have the back of the American farmer. Indeed, we have been having meaningful discussions regarding these issues with Secretary Perdue and his outstanding team at the United States Department of Agriculture. We respectfully request that you also direct other parts of your administration to make working with our producers a top priority as we seek to forestall financial devastation.

The letter established a theme – patriotic pork producers at the tip of the spear in trade disputes –that would be carried throughout NPPC’s campaign to restore zero-tariff trade with Mexico. It was an impactful letter that resulted in a regular dialogue with administration officials in the White House, USDA and the Office of the U.S. Trade Representative. Not long after this letter was sent, the USDA announced plans for a trade mitigation program that made U.S. pork the largest beneficiary of commodity purchases and the second largest recipient of direct farmer payments.

Tip of the Spear: A Trade Advocacy Campaign for U.S. Pork

Nick GiordanoVice President & Counsel, Global Government Affairs

National Pork Producers Council

Public AwarenessNPPC managed a sustained communications campaign to build awareness among key policy influencers about the impact of steel and aluminum tariffs on U.S. pork. The council reached out to and responded to hundreds of journalists over the last year, driving U.S. pork’s message in high-profile media outlets such as Fox News, the Wall Street Journal, Washington Post, Politico, CNBC, CNN and others. Following are select clips reflecting the message NPPC and its producer leaders delivered on behalf of the industry: Fox News, Ag Web, CNBC, C-SPAN.

NPPC engaged coalitions to reinforce its message to the administration. By collectively emphasizing the impact across multiple U.S. economic sectors, coalitions helped drive a sense of urgency toward the resolution of trade disputes impacting U.S. pork.

In January 2019, NPPC led the formation of an ad hoc coalition, made up of more than 45 organizations representing virtually every economic sector, that directly appealed to the Trump administration to immediately restore zero-tariff trade in North America. A coalition letter -- signed by food, agriculture, chemical, insurance, manufacturing, apparel and other groups – was delivered to USTR Ambassador Lighthizer and Commerce Secretary Ross, and included the following statement:

The continued application of metal tariffs means ongoing economic hardship for U.S. companies that depend on imported steel and aluminum, but that are not exempted from these tariffs. Producers of agricultural and manufactured products that are highly dependent on the Canadian and Mexican markets are also suffering serious financial losses.

NPPC also amplified the economy-wide negative impact of metal tariffs by organizing a high-profile Global Business Dialogue event featuring representatives from different business sectors, including The U.S. Chamber of Commerce, the American Automotive Policy Council and the Aluminum Association. During the event, covered widely by Washington, D.C. media, Governor Matt Blunt, president of the American Automotive Policy Council, said:

NPPC also worked aggressively on Capitol Hill to enlist members of Congress. In addition to day-to-day outreach by the council’s congressional relations team, three consecutive Legislative Action Conferences prepared producer leaders to engage their representatives in Congress to appeal to the White House to drop the metal tariffs on Mexico.

In April of this year, Iowa producer Mark Meirick testified before the House Subcommittee on Rural Development, Agriculture, Trade and Entrepreneurship to reinforce the impact of sustained trade retaliation on U.S. pork producers. In his remarks, Mark said:

Trade is vital to the success of U.S. pork producers. But tariffs on U.S. pork exports to two of our top three markets, no clear timeline for new trade agreement negotiations with Japan and other key markets, uncertainly surrounding the ratification of USMCA and growing competition from other pork-producing nations have U.S. pig farmers like me more than a little worried. The bottom line is that U.S. pork is shouldering a disproportionate share of trade retaliation against the United States, and producers need relief.

Coalitions – Strength in Numbers

The continued imposition of the steel and aluminum tariffs, particularly on Canada and Mexico, are extremely harmful to our industry and risk undoing all the potential benefits of the USMCA They are also unnecessary…

NPPC CONTACTS

Author:Mr. Nick Giordano, Vice President & Counsel, Gobal Government Affairs, giordann@nppc.org

Media Inquiries:Jim Monroe, Assistant Vice President, Communications, monroej@nppc.org, 202-347-3600

Social media also played a key role in NPPC’s campaign. The organization posted tariff relief-related content nearly 200 times, generating more than 650,000 impressions and retweets, shares and other engagement with nearly 7,000 followers.

Other elements of the awareness campaign included metal-tariff-related outreach to more than 125 journalists covering World Pork Expo 2018, which included attendance and remarks by USTR chief agriculture negotiator Gregg Doud. The council also prepared and promoted a white paper addressing the impact of the metal tariffs.

Next StepsWith the removal of metal tariffs on our North American trading partners,NPPC can now turn more of its attention to pushing for the swift ratification of the U.S.-Mexico-Canada trade agreement. We will manage this as a key vote and closely monitor support for the agreement among members of Congress. We also remain focused on resolution of the trade dispute with China and the expeditious completion of a trade agreement with Japan.

Sustained media outreach, resulting in hundreds of news stories and millions of media impressions carrying U.S. pork’s voice, created awareness for the financial strain of the dispute on American pork producers. Outreach included these press releases:

• May 2018 – NPPC Statement on Latest Steel and Aluminum Tariffs• June 2018 – U.S. Pork Producers Respond to Mexican Retaliation• July 2018 – NPPC Statement on Farmer Aid Package• August 2018 – Producers Welcome Help But Want End to Trade Disputes• September 2018 – Auto Import Tariffs Will Prompt More Retaliation• October 2018 – NPPC Hails U.S. - Mexico - Canada Trade Agreement• December 2018 – U.S. Pork Losses from Trade Dispute with Mexico: $1.5 Billion• January 2019 – Groups Urge Administration to Lift Metals Tariffs• April 2019 – U.S. Pork Can’t Afford Loss of Mexican Market