Agribusiness Reporter David Geiger sits down with former Secretary of Agriculture and Iowa Governor Tom Vilsack, who is now the President and CEO of the U.S. Dairy Export Council.
Q: Tariffs are an important conversation so far this entire year but tariffs have also been used in all administrations: the Obama Administration, the Bush Administration. Why do you think tariffs are important in this conversation, what is the role they serve?
A: “Well, let’s take the NAFTA renegotiations that are taking place today across Canada and Mexico and the United States. We obviously want to preserve what’s working in the Mexico market for dairy, where there are very few tariffs, very open market, it’s our number one dairy market and so we want to preserve that in any negotiations or discussions. We don’t want to see tariffs basically assessed against American dairy products. At the same time, our Canadian friends have very high tariffs and so it’s very difficult to enter that market with our dairy products. And so they utilize tariffs and pricing systems to make it harder for U.S. dairy to make it into Canada. So, what we hope from a negotiation, from a renegotiation of NAFTA, is an elimination of those tariffs, of those barriers that make it harder for us to be competitive in the Canadian market.”
Q: Now, there’s no question that agriculture is the vulnerable market, when it comes to trade retaliation and retaliatory tariffs. You had to deal as Secretary of Agriculture with the Country of Origin Labeling. How do you think agriculture can work against having this vulnerable market?
A: “Well, I think first and foremost, explaining to policy makers in our own country the significance of the food and agriculture industry. When you talk about the food and agriculture industry, you’re talking about an industry that employs 43 million people, it’s 28 percent of the American workforce, it’s 20 percent of the overall U.S. economy. So, you need to prioritize the role that food and agriculture plays in terms of employment and in terms of supporting our economy.”
Q: The U.S. is pretty dominant in terms of agriculture products in terms of what we export. Iowa exports as much as a lot of other countries. Do you think the benefits of having free trade deals or having tariff-free opportunities outweighs what many call negative effects on other aspects of the American industry?
A: “Well, the reality is, I don’t think people, again understand the significance of the food and agriculture industry to the overall economy. If they did, I think they’d have a slightly different attitude towards trade generally. A lot of press is focused basically on the industries where trade is, where we’re at a disadvantage for one reason or another. What people don’t realize is that trade in agriculture, we have a surplus, and have had a surplus, in the world for years and years and years. Supports better paying jobs. The key here I think is to have fair and balanced trade and for us to basically go into negotiations where agriculture is a priority. It’s not the last thing on the list, it’s the first thing on the list. You know, I think there are opportunities, no question take China for example, no question China has been playing games with the trading system and, but the key here I think is do we go it alone in an effort to try and change China’s ways? Or do we align ourselves with other countries who have been similarly, basically victimized by the Chinese. I think if we align ourselves with Europe and Japan, go after China as sort of a global effort as opposed to a singular U.S. led effort we might have better success. So, I think it’s really important that as we think about trying to take tariffs down, try to remove barriers, try to create a fairer system across the board, that we do in a way that doesn’t put agriculture at risk, and I think there are ways to do that.”