2015 PORK Management Conference “Your Pork Industry Investment” New Orleans, Louisiana Maria C. Zieba Manager of International Affairs National Pork Producers Council June 18, 2015

Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union’s (ILWU) ratified their contract the week of May 18. Q export numbers reflect the severity of the issue Shipping companies charged unjust fees for their inability to pick up and drop off containers/equipment during slowdowns –Added costs to producers NPPC continuing to play an active role and meet with U.S. officials and other groups –Proposed legislation to avoid future instances in the pipeline West Coast Port Slowdown

Transportation Legislation S Port Performance Act: Measure port productivity to identify port disruptions before they cause economic damage and to enable more rapid and effective response –Cosponsors: Senators Thune, Gardner, Fischer and Alexander S Protecting Orderly and Responsible Transit of Shipments (PORTS) Act of 2015: Measure to amend the National Labor Relations Act to provide additional authority to governors under Taft Hartley specific to port- related issues. –Cosponsors: Senators Gardener and Alexander

COOL United States lost final COOL appeal on May 18th Retaliation could be implemented within months Repeal bill passed in House –Repeal on the Senate side will be an uphill battle Request of $3 Billion retaliation to be imposed in key states President Elect John Weber participated in hearing on March 25 on COOL –Senate Hearing scheduled June 25 COOL Reform Coalition –Meat sector involvement, but led by Corn Refiners Association, National Association of Manufacturers and the Chamber of Commerce Fix needs to be WTO Compliant

Trade Promotion Authority TPA passed through Senate on May 22 –Poison pill amendments failed –NPPC signed on letters opposing two amendments Senate passed Trade Adjustment Assistance (TAA) Trade Preferences (AGOA, Haiti and GSP) and Customs Reauthorization also passed through Senate in May House voted to pass TPA on June 12 but bill structure prevents full passage –New vote TODAY –219 to 211; 28 Democrats joined Republicans –Tougher fight in House than in the Senate –Tea Party Republicans and Democrats problematic

TPA Senate Floor Votes Hatch #1411 (side-by-side alternative amendment to Portman #1299) –Agreed to (70-29) Portman #1299 (currency manipulation) –Not Agreed to (48-51) Warren #1327 (investor state dispute settlement) –Not Agreed to (39-60) Brown #1251 (Congressional vote if other countries want to join the TPP) –Not Agreed to (47-52) Flake #1243 (strike Title 2 relating to TAA program) –Not Agreed to (35-63) Hatch #1221 (adoption of the substitute) –Agreed to (62-37) Motion to Invoke Cloture on HR 1314 –Agreed to (61-38) FINAL PASSAGE – Agreed to (62-38)

Trade Promotion Authority National Congressional Outreach –January Statement & Letter to the Hill –Letter to Congress with NPPC and 70 other food and Ag groups –Letter to Congress from NPPC and 39 State pork producer affiliates –NPPC very active on the Trade Benefits America Steering Committee –NPPC acts as secretariat for all the Ag groups in setting up Ag specific Hill TPA meetings separate from Trade Benefits America meetings –NPPC set up Ag TPA briefings for House and Senate staff –NPPC regularly shares intel with all the Ag groups –NPPC producer testified at House Ag Committee hearing on importance of trade to U.S. agriculture –Politico webpage takeovers –Sponsorship of Politico Playbook, Politico Morning Trade and Politico Morning Ag at various times during the past three months –Letters to reject poison pill amendments

State and Local Outreach –State Ag groups sent letters to their congressional delegation California, Illinois, Indiana, Iowa, Kansas, Michigan, Nebraska, North Carolina, Ohio, Oklahoma, Oregon, Texas, Washington, Wisconsin –Grassroots pork producer Call to Action generating producer letters –Op-Eds –Reaching out to consumers through Keep Food Affordable (KFA) website Trade Promotion Authority

Pork Exports & Free Trade Agreements Billions of Dollars

Billion Dollars

NAFTA

DR- CAFTA

Australia FTA

Chile FTA

Source: Darci Vetter, USTR; IDB Integration and Trade Sector based on INTrade. RTA Expansion 1975

RTA Expansion 1995 Source: Darci Vetter, USTR; IDB Integration and Trade Sector based on INTrade.

RTA Expansion 2014 Source: Darci Vetter, USTR; IDB Integration and Trade Sector based on INTrade.

Trans-Pacific Partnership (TPP)

TPP NPPC continues to demand elimination of all tariff and non- tariff barriers Japan willing to make tough concessions to its so-called sensitive sectors Japan’s powerful farm lobby has conceded to structural reform as part of ‘Abenomics’ Also watching Vietnam and Australia closely Need TPA to signal Congress and Administration’s willingness to conclude negotiations

Source: Alexis Taylor, USDA Deputy Under Secretary for Farm and Foreign Agricultural Services

TPP Deliverables Malaysia eliminated all non-tariff barriers ending its de facto ban on U.S. pork New Zealand eliminated the most trade distorting aspects of its non-tariff barriers resulting in U.S. pork sales at retail Chile and Peru eliminated their trichinae testing requirements for chilled U.S. pork Singapore lifted its ban on the use of PRTs

Australia Australian restrictions are related to porcine reproductive and respiratory syndrome (PRRS) and postweaning multisystemic wasting syndrome (PMWS) –Confirmed PMWS in domestic herd –Delay risk assessment on PRRS, but watching New Zealand process closely Pork Plant Approvals –Australia limits imports from the United States to only U.S. facilities that have been approved by Australia.

Growth Opportunities: Vietnam & Malaysia TPP will provide improved market access to developing markets like Vietnam and Malaysia, two of Asia’s most dynamic economies and a growing market for agri-food products. Vietnam: Vietnam has a young and growing population. 43 percent of the population of 93 million is 25 years old or younger. Vietnam’s economy is growing rapidly. Since 2007 per capita growth has doubled. Since joining the WTO in 2007, U.S. Ag exports to Vietnam have more than doubled to $2.3 billion. Malaysia: Malaysia has a young and growing population. 45 percent of the population of 30 million is 25 years old or younger. Demand for U.S. Ag products has risen steeply, increasing 2.5 times over the last 10 years. Source: Alexis Taylor, USDA Deputy Under Secretary for Farm and Foreign Agricultural Services

Vietnam Vietnam lifted the white offal ban on Sept. 1st, but with certain conditions Additional registration, certification requirements for all its trading partners, and limited to 3 ports of entry Direct result of NPPC involvement White offal makes up the majority of U.S. pork exports to Asian countries Sanitary and non-tariff barriers imposing a de facto ban Zero tolerance for pathogens Plant registration Reference Price NPPC Efforts Working with the U.S. apparel industry to ease U.S. textile rules in TPP USDA Catfish Rule

Malaysia July 2012 banned all export of U.S. pork and pork products No equivalence recognition of the U.S. federal meat inspection. Malaysian government provides approval for pork imports on an establishment by establishment basis.

Singapore Impose restrictions on U.S. pork exports based on unscientific concerns of trichinae transmission U.S. government working on an exchange of letters with Singapore to lift mitigation Impose unscientific shelf life requirements and time requirements on manufacture date May also impose unknown pathogen testing Amended import regulations to allow pathogen reduction treatments (PRTs)

Chile & Peru Peru recently accepted APHIS proposal to allow chilled pork from the U.S. into their market; Chile passed a similar rule in February NPPC worked closely with U.S., Chilean and Peruvian officials

South Africa Potential to add $40 million of U.S. pork exports AGOA renewal legislation moving along with trade bills Commercial interest, but lack of access –PRRS, Pseudo rabies, trichinae –Transport, origin of animals, etc. Poultry access recently negotiated after a ten year trade dispute Negotiations ongoing for pork access NPPC has been engaged with South African and U.S. governments and providing scientific resources

T-TIP Removal of all EU barriers will significantly increase U.S. exports U.S. cabinet officials stated unequivocally that agriculture would be part of the negotiations EU has stated it is unwilling to eliminate tariffs on some agricultural products: beef, poultry and pork. U.S. exports more pork to smaller countries like Honduras than the entire EU

Lithuania FSIS proposed rule to grant equivalency of meat inspection systems with Lithuania, one of the Eastern European countries with active African Swine Fever (ASF) outbreaks If the U.S. contracted ASF it would decimate the pork industry NPPC Position: APHIS must conduct formal risk assessments of the ASF outbreaks in Lithuania and its neighboring states before USDA takes any further steps to facilitate the movement of pork from Lithuania to the U.S. Swine Industry specialists traveling to Eastern Europe this June to assess the situation

China is a potentially enormous market for U.S. pork About half of the world’s pork is consumed in China Dr. Dermot Hayes estimates that the market for U.S. pork in China could be well over a million MT. U.S. pork imports are constrained by: Ban on the use of ractopamine in imported pork Discriminatory value added tax (VAT) Large subsidies to domestic producers Other restrictive practices China

Argentina There is currently no export certificate to export to Argentina. –U.S. fresh and frozen pork are ineligible for export to Argentina Argentina has unscientific trichinae mitigation requirements Argentina’s trade relations with all of its partners has greatly diminished under current President Cristina Fernández de Kirchner

NPPC Takes No Position on Cuba President’s Executive Order is limited and does not fully address the financing issue that currently restricts agriculture trade –Must lift embargo completely to solve access problem Market potential of 11 million consumers, but TPP represents 805 million people Key members still object to the president’s actions on Cuba Recent Congressional Delegations to Cuba included Sen. Stabenow and Rep. Pelosi

Thank You Contact: Maria C. Zieba

Canada Non-ambulatory Pig Export Certificate Proposal Canadian plant audit –Resulted in proposed export requirement updates that include handling of non-ambulatory, non-injured pigs in packing plants –Request not supported by science nor outcomes-based equivalency Estimated cost to U.S. industry to comply, $66 million NPPC vehemently opposes acquiescing to Canada’s request and stands behind current U.S. animal handling procedures –FSIS Collaboration to Represent Industry Response –USDA & USTR Engagement –Canadian Embassy Enrollment –Canadian Government at Ottawa –PPIC Member Input FSIS met with CFIA early February refusing to budge at this time Conversation continues, no export stoppage to Canada

Taiwan Legislative Yuan passed legislation on beef MRLs on July 25, 2012 –Maintaining all bans on the drug in pork –Approved an MRL of 10 ppb for beef, the standard adopted for muscle by Codex in July The Government of Taiwan has stated it has no intention of lifting ban on pork Taiwanese government and business groups making a hard push to set up entrance to TPP and initiate a Trade and Investment Framework Agreement (TIFA) –NPPC has actively worked to stall these engagements until Taiwan lifts ban on pork imports

India De facto ban on U.S. pork due to India’s Veterinary Certificate –Ruminant Feeding Ban –Animal Disease Restrictions –Veterinary Drug Residues –Plant Approvals –Animal Origin –Processed Pork New draft certificate currently in the comment period would eliminate many of the restrictions Food Safety and Standards Authority of India issued a new draft Order on Meat and Poultry –Would maintain the current ruminant feeding ban –Would impose a prohibition on the use of some antibiotics in animal feed –Scheduled to go into effect in July 2015

T-TIP Major barriers to U.S. pork exports Tariff rate quota (TRQ) smaller than Uruguay Round minimum access Ban on ractopamine Trichinae mitigation requirements Prohibition on pathogen reduction treatments (PRTs) Plant approvals Other issues that aren’t currently on the table: animal welfare, cloning, other technologies