Aberdeen American News (South Dakota) | April 23, 2004
Mexico's Secretariat of Economy released a study recently concluding it is unnecessary to renegotiate the agricultural chapter of the North American Free Trade Agreement (NAFTA). The study evaluated the effect NAFTA's agricultural chapter has had on Mexico's rural sector and was required as part of last year's National Agreement on Agriculture. According to the study, both food and rural poverty have increased in Mexico's agricultural sector while, at the same time, the concentration in wealth has increased in recent years.
However, the study also found NAFTA was not the "decisive factor" in this regard. "The Council is pleased with the results of the study, as it outlines the many domestic issues that have contributed to the decline in rural Mexico that are often wrongly attributed to NAFTA itself," said Kevin Natz, special assistant ETH trade policy. "NAFTA overall has been very beneficial for all parties involved and the renegotiation of one chapter would not be beneficial to U.S. agriculture."
Mexico imported 3.49 million metric tons of U.S. sorghum in 2002-03, making them the top customer for that market. For corn, Mexico is behind only Japan, with imports of 5.03 million tons in 2002-03. The country also imported 17,000 tons of barley last year.
Iraqi grain inspectors visit CLFF in Egypt
Twenty current and future Iraqi grain inspectors are taking lessons from the Egyptians during a program this week in Cairo organized by the Council and the American Soybean Association (ASA). During their visit April 9-17, the grain inspectors are taking a close look at the operations of the successful Central Laboratory for Food and Feed (CLFF), which the Council helped establish in Egypt. CLFF's head administrator is conducting classes with the Iraqis on feed grain grading, mycotoxins, quality control and sampling, as well as grain inspection and grading for corn, barley, sorghum and soybeans.
Following their visit to Egypt, the grain inspection team will participate in additional training in Jordan at the Ministry of Supply Storage Facilities and Laboratories and the Ministry of Agriculture Laboratories. They will also visit Aqaba Port Facilities. Iraq's Deputy Minister of Agriculture identified the Iraqis participating in the training. "This shows the real spirit of cooperation that exists between the Council, ASA and Iraq's Ministry of Agriculture to assist in rebuilding Iraq's grain inspection system and in facilitating the resumption of Iraq's grain trade," said Chris Corry, the Council's senior director of international operations for Middle East, Europe, Africa and Latin America. Since November, the Council and ASA have been working to help rebuild Iraq's grain industry and establish a poultry association thanks to funding from USDA. Prior to the 1990s, the U.S. exported close to 35 million bushels of corn to Iraq.
Council supports USTR's filing of case against Mexico
The United States has filed a World Trade Organization case against Mexico over taxes associated with high fructose corn syrup. The case focuses on Mexico's 20 percent sales tax and 20 percent distribution tax on sweetened beverages not using cane sugar. U.S. Trade Representative (USTR) Robert B. Zoellick said the United States believes Mexico's beverage tax is inconsistent with Mexico's obligations in the WTO to apply taxes on comparable domestic and imported products in a non-discriminatory manner. "Mexico's beverage taxes are discriminatory and protectionist. We attempted to settle this dispute through negotiations, in close consultation with our industry," Zoellick said.
Only beverages that use high fructose corn syrup (HFCS) or any other sweetener other than cane sugar are subject to the beverage taxes. The Council joins its member organizations ETH the Corn Refiners Association, Inc. (CRA) and the National Corn Growers Association ETH in supporting the USTR for filing the case. According to CRA, Mexico is an estimated 2 million metric ton market for U.S. exports of HFCS, making it the top export market prior to the tax. CRA estimates that for every 2 million tons of HFCS access into Mexico, the U.S. corn industry has lost: $620 million in annual HFCS export sales; more than $300 million in annual corn sales; 133 million bushels of bulk corn production; and 945.7 thousand acres of corn production.
U.S. corn is returning to Russia.
U.S. corn is returning to Russia, a country which did not import U.S. corn in 2003. The Council is delighted with the news of a second shipment of U.S. corn being delivered to St. Petersburg. The 18,000 metric ton shipment docked this week, joining a 16,000 ton shipment that arrived earlier this month. U.S. corn imports to Russia have been limited over the past decade, due largely to Russian livestock producers utilizing feed wheat instead of corn. However, the combination of a shortage of feed wheat and a competitive price advantage has given U.S. corn a more favorable edge.
"It is exciting to see Russia utilizing U.S. corn again," said Chris Corry, the Council's senior director of international operations for Middle East, Europe, Africa and Latin America. "This grain was delivered to the region where 80 percent of Russia's poultry is produced but it's also a grain deficit area. The majority of our programming in Russia is focused within this region and it is obviously paying off." Corry added that the Russian poultry industry is growing by 10 to 15 percent annually, a rate outpacing the country's ability to supply their needs. In the early 1990s, Russia imported more than 2.5 million tons (98 million bushels) of U.S. corn per year.
U.S. corn product verification systems are the focus of recent trip to Japan.
The value of U.S. corn product verification systems was the topic of a recent trip to Japan made by a team from the Council, the Illinois Corn Marketing Board, the Iowa Corn Promotion Board and Novecta. The team met with Japanese trading companies, corn processors and representatives from the brewing and snack food industries to explain the scope of U.S. product verification systems. The United States' share of Japan's industrial corn imports market has historically been high, but the introduction of genetically modified corn varieties has shaken the food sector's confi
dence in U.S. corn. Additionally, recently enacted labeling laws have heightened this segment's requirements for corn production process information.
While the U.S. team learned the Japanese industry already employs product verification systems, they were able to make valuable contacts within the industry and hold discussions about Japan's current product verification systems and how U.S. companies can assist them in the future. "Even though there may not be an evident opportunity for Novecta at this time, we believe it is important to make and maintain relationships in order to be in front of the industry when a turn-around occurs," said Chet Boruff, with Novecta.
A Japanese process verification team is scheduled to visit the United States in June to learn more about U.S. process verification systems first-hand.
Council staff discusses trade strategies
Council President and CEO Ken Hobbie discussed trade strategies with corn growers from around the country at the National Corn Growers Association's (NCGA) All Staff meeting in St. Louis last week.
who are also Council members - attended the annual, three-day symposium designed to strengthen communication and collaboration among the national and state associations. "We were able to share information about the Council's current activities and trade strategies which generated an excellent question and answer session with the growers in attendance," said Bernie Duenwald, the Council's senior director of membership and communications who attended the meeting with Hobbie.
The Council's biotechnology Director Dave McGuire participated in the International Grain Trade Coalition (IGTC) meeting, held in conjunction with the Canadian Grains Council's annual meeting, earlier this month in Winnipeg. The IGTC discussions revolved around the recent Biosafety Protocol (BSP) meeting in Kuala Lumpur, which urged countries to require the unique identification of all biotech events in commodity shipments. "Since the BSP forum is dominated by environmental delegates, the consensus reached at the meeting was that our capacity building efforts surrounding the Protocols' decisions are more appropriately spent in bilateral discussions," McGuire said. "The IGTC is developing a list of 7 to 8 countries that are open to the Coalition's inputs and recognize the importance of involving their Ministries of Agriculture, Trade and Finance in policy formulation."Aberdeen American News (South Dakota):
