DES MOINES — Finishing trade deals with Mexico, Canada and Japan could help calm jitters among U.S. farmers facing tough financial times due in part to President Donald Trump’s tariff war with China that has rocked export markets, two key Iowans said Monday.
“There has been a lot of pain already and I think the countryside is looking for a hopeful sign, a positive sign as we are dealing with a number of trade issues that have been complicated and difficult for farmers,” said Democrat Tom Vilsack, who joined Republican U.S. Sen. Chuck Grassley in pushing Congress to ratify the U.S.- Mexico-Canada Agreement, which would replace the 25-year-old North American Free Trade Agreement.
“So I think the ratification of (the USMCA) maybe together with an agreement with Japan will send a bit of hope out there. We haven’t seen that for a while on the countryside,” added Vilsack, formerly an Iowa governor and U.S. Secretary of Agriculture before becoming head of the U.S. Dairy Export Council.
Grassley, R-Iowa, chairman of the Senate Finance Committee, said he hoped Democrats who run the U.S. House will pass the USMCA this fall so Republicans in the U.S. Senate can follow suit “in short order” to ratify a pact with Iowa’s top two trade partners.
Iowa’s four-member House delegation has three Democrats and one Republican, while both senators from Iowa are Republican.
“I have not heard anything negative from leaders of the House of Representatives, where this must start. I don’t have a date,” said Grassley, who agreed with Vilsack that USMCA should get bipartisan approval this year to avoid presidential election year politics.
Some Democrats have expressed concerns about the agreement’s labor, environment and enforcement provisions. A House working group was appointed earlier this year to look into those issues.
“I believe that we will get this done. I don’t think there’s any doubt that we will get this done this year,” said Grassley. But he added, “in any election year, it’s difficult to get a lot of controversial things passed, but particularly in a presidential election year. If it gets to November and it’s not done, I get very nervous.”
Over the weekend, Trump indicated U.S. negotiators had reached a billion-dollar agreement in principle with Japan — including the purchase of U.S. corn — that would cover areas of agriculture, digital trade and reduction of industrial tariffs that he hoped would be finalized by mid-September.
Also, Trump expressed confidence Monday at the close of an international summit meeting that the United State and China could reach a deal, telling reporters that Chinese officials had reached out by telephone and that negotiators would restart trade talks after the latest escalation in tariffs and his “order” that American companies look for ways to pull out of China.
Grassley and Vilsack said trade developments are very important to farmers, manufacturers and rural America. Passing USMCA would help build momentum and reduce angst in areas of agriculture facing prolonged downturns, they said, while other sectors of the economy thrive.
“Exports matter and trade agreements are incredibly important to allowing the U.S. to have a level playing field with the rest of the world,” Vilsack told reporters at the close of a tour of a dairy production facility in Des Moines.
“The issues with China are far more complex and far more difficult, particularly since the United States is approaching them alone without the support of the world community,” the former USDA head noted. “I don’t foresee that getting resolved in the near term. That is why it is important for this trade agreement to be ratified, and if there is to be an agreement with Japan for that to be concluded in a way that sends the message that things are going to get a little better.
“If this doesn’t get ratified, if Japan doesn’t happen and we continue to have difficulties with China, this is going to add to the worry and stress that’s out there already,” added Vilsack.
Grassley said he was “very definitely” encouraged by the preliminary pact announced with Japan, telling reporters “I think it helps us along the way of taking some of the anxiety that agriculture has out because of our problems with China.”
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