New U.S. agriculture trade chief seeks to diversify buyers beyond China

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FILE PHOTO: Corn is loaded into a truck to be transported for ethanol production in Kelley, Iowa

By David Lawder

WASHINGTON (Reuters) – U.S. chief agricultural trade negotiator Doug McKalip wants China to keep striving to meet U.S. farm goods purchase commitments under the 2020 “Phase 1” trade deal, but told Reuters that he also is pushing to diversify exports beyond the biggest U.S. grain customer.

In his first media interview on Thursday since his Dec. 23 Senate confirmation of his U.S. Trade Representative office post, McKalip said that his top priority was opening new markets for U.S. agricultural products.

“I think for the American farmer, it’s important to have a diverse set of buyers out there,” he said. “We need to develop additional markets.”

China will remain an important top customer, he said, a day after U.S. Census Bureau trade data showed China reached a record $40.85 billion – nearly a fifth of global U.S. farm exports that also reached a record $213 billion.

The purchase values, aided by sharply higher grain prices due in part war-constrained supplies from Ukraine, meant that China would have satisfied the 2020 target outlined in the Trump administration’s Phase 1 trade deal – goals that China failed to reach in the prior three years.

“We’d certainly like to see their purchases be closer to the top numbers that they agreed to,” McKalip said of China.

He added that USTR was “not asking for a favor. We’re just asking them to do what they signed onto when they signed Phase 1.”

NEW MARKETS, NEW PRODUCTS

Every continent has potential markets for U.S. row crops, grains and other staples, and the Ukraine war means demand for these will stay high, he said, but there were many other new export opportunities to pursue.

“I’m interested in specialty crops, organics, biofuels, all kinds of emerging areas of U.S. agriculture that I think are exciting, and that I think consumers out there want,” McKalip said. “We just need to make sure we’re in a position where other governments don’t have barriers” to such products.

Southeast Asia represents an important region to expand U.S. farm exports, and McKalip said he intends to work on reducing trade barriers through the Biden administration’s Indo-Pacific Economic Framework negotiations.

Although the talks are not expected to result in any tariff reductions, McKalip said that “regulator-to-regulator” discussions for improving standards for using land and water resources, conservation, and farm labor standards can help level the playing field in such talks.

McKalip also told Reuters that he has asked Mexico to explain the science behind its genetically modified corn ban and that USTR also wants Canada to broaden U.S. access to its dairy import quotas to resolve a second U.S. trade challenge.

(Reporting by David Lawder; Editing by Marguerita Choy)

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