U.S. Trade: Lighthizer Reiterates Importance of Agriculture for U.S. Trade
Yesterday (Tuesday, March 14), the Senate Committee on Finance held the confirmation hearing for Robert Lighthizer, President Trump’s nominee to the position of U.S. Trade Representative.
Lighthizer spent more than an hour and a half under scrutiny by Members of the Committee with the majority of questions aimed at the importance of preserving agriculture’s bounty due to the North American Free Trade Agreement (NAFTA) and working out alternative trade deals in Asia following the demise of the Trans Pacific Partnership (TPP).
In response to concerns over NAFTA renegotiation and potential harmful effects to U.S. agriculture markets, Lighthizer said, “We have to be careful not to lose what we gained. I do believe it can be done. I’m not suggesting that it will be easy, but I do believe it can be done.”
Senate Ag Committee Chairman Pat Roberts (R-KS) told Lighthizer, “If we do not sell agriculture commodities over the next several months, you, sir, will have a problem on your hands. We all will have a problem on our hands.”
“I expect we’re going to have very rigorous enforcement,” Lighthizer told Committee Chairman Orrin Hatch (R-UT), adding that President Trump had picked him for the job “in part because of my enforcement background. I expect to bring as many actions as are justified, both at the [World Trade Organization] and in our bilateral agreements,” he added.
Senator Bill Cassidy (R-LA) raised concerns on the horizon from the rice industry over the proposed renegotiation of NAFTA. “Products say for example, rice, are actually advantaged under NAFTA so it actually benefits them. What would you say to my rice farmer that’s concerned that there will be retaliation [from Mexico] and they’ll now be competing against Vietnam that may have a state-owned enterprise selling rice at a discount relative to what our rice producers can do?” said Cassidy.
Lighthizer responded by saying, “I hope we can renegotiate NAFTA in a way that benefits both countries and doesn’t put agriculture in a precarious position.”
Also important for U.S.-grown rice, Lighthizer stressed that, “Japan, of course, is a primary target for increased access for agriculture.”
The next steps for Lighthizer’s confirmation by the Committee and then the full Senate are still unclear. Democrats on the Committee are requesting a waiver for Lighthizer’s prior business interests (required for his confirmation to proceed) and demanding that it be packaged with an unrelated bill on coal miner rights.
The bulls were again winners in an exciting week for longs and producers. In last week’s report, I said the markets bias would be near unchanged to a bit lower.