McKinney: China not requesting purchase downgrade; focus on tough markets

HOUSTON — The Trump administration has not received any request from China to reduce its expected agricultural imports in the next two years due to the coronavirus, but the administration is focusing on increasing U.S. exports to some of the toughest markets in the world, Agriculture Undersecretary for Agricultural Trade and Foreign Agricultural Affairs Ted McKinney said here Wednesday.

The Office of the U.S. Trade Representative has not received any request to reduce the purchases to which China committed itself in the phase one trade agreement, McKinney told the National Ethanol Conference.

McKinney said he believes the Chinese will follow through on their promises because the agreement was signed on “a very public stage” — the White House. He noted, however, that a trip he was supposed to take last week to China was postponed due to the coronavirus.

But if the Chinese should fall behind in their purchases, “your product might be a way to catch up,” McKinney said.

McKinney also said that exporters are telling him that since the new trade agreement with Japan went into effect on January 1, they are “catching up” on market share.

Since he took the job at the beginning of the Trump administration, McKinney noted, he has visited 25 countries and “no, it is not free, fair or reciprocal trade around the world.”

McKinney said he and the administration are operating on a “no stone unturned philosophy” on trade and that he trying to open up the most difficult markets.

That includes Mexico, he said, which allows 10% ethanol except in the three major cities.

“I think the opportunities in Mexico are the consummate win-win,” McKinney said, with U.S. corn-based ethanol flowing south and Mexican sugar cane-based ethanol flowing north. “Our market is big enough for their ethanol and our ethanol.”

Brazil has imposed a tariff on U.S. ethanol, but Brazilian officials “know how we feel about the tariff they put on our ethanol. They worked us over to take our tariff down. It just sticks in my craw. I believe we will find success in getting rid of the doggone tariff they have put on us.”

Brazil “desperately” wants to become a member of the Organization for Economic Cooperation and Development, a Paris-based organization of recognized wealthy, developed countries, he said. The ethanol tariff “is is a factor they have to take into consideration,” he said.

His predecessors told him India “is impossible,” McKinney said.

“They are not incorrect. I have been there twice and will go again.”

Noting that he was “the only aggie” at a reception to welcome the new Indian ambassador to Washington, he said “you must stick a toe, maybe an ankle into that water.”

He added that he believes ethanol will be part of President Donald Trump’s discussions when he visits India.

Indonesia is a potential market but it’s necessary to get the Indonesians to follow World Trade Organization rules, he said, citing other potential markets in Asia as Phillippines, Malaysia and Vietnam.

“We just have to keep at it,” McKinney said, noting that he has logged about 450,000 international air miles, but that Agriculture Secretary Sonny Perdue has told him he logs a million air miles while he holds the job.

Only the European Union “disses our product,” McKinney. “The rest of the world loves the quality and safety of our products.”

–The Hagstrom Report