ST. PAUL — Minnesota Gov. Tim Walz on Wednesday, Aug. 21, announced that he will travel to Japan and South Korea next month in hopes of bolstering trade alliances there.
The Democratic governor told Forum News Service the move is part of a plan to maintain relationships with the state's trade partners and build new ones in spite of top-level federal trade policy moves that have had a stinging impact in Minnesota.
Japan imported $1.5 billion in Minnesota goods last year, short of just three other countries: Canada, China and Mexico. The three top-importing nations bought a combined $10 billion in Minnesota goods in 2018, per the state Department of Employment and Economic Development.
But with the ratification of a new trade agreement between the U.S., Mexico and Canada ongoing and a long-term tit-for-tat trade war with China still simmering, two of those top spenders have seen tariffs stifle their spending patterns. Canada imported 3% less in the first three months of this year than it did a year prior, while China took in 13% fewer Minnesotan exports. Mexico bucked the trend, importing 16% more goods from Minnesota than it did a year before.
“Minnesota is committed to unleashing economic opportunities across the globe,” Walz said in a news release Wednesday. “I look forward to traveling to Tokyo and Seoul and making the case directly to international decision-makers that Minnesota is a great place to do business.”
Walz will spend Sept. 7-10 in Tokyo at the 51st Midwest U.S. Japan Association Conference along with governors from Illinois, Indiana, Nebraska, Ohio and Wisconsin, as well as Japanese trade officials and business leaders. Then on Set. 11, Walz will travel to Seoul, South Korea to discuss trade and future economic development opportunities between that nation and Minnesota.
Korea, the state's sixth-largest importer of Minnesota goods brought in $1 billion in exports from the state last year.
Walz is not alone in pursuing Southeast Asian trade partners that can ease some of the impact of losing access to Chinese markets. South Dakota agriculture officials are set to travel to Vietnam this fall on a trade mission. And U.S. Sen. Kevin Cramer, R-N.D., met earlier this month with a top Japanese trade minister.
And lawmakers from around the Midwest, including a delegation from Minnesota, visited Taiwan last month to encourage additional trade opportunities there, too.
“We’re trying to make the case that Minnesota is ready to do this, we know that the federal trade policy through the Constitution is with the executive branch and with the president but we have got to continue to make sure that we’re ready to go again," Walz told Forum News Service earlier this month.
Before those Chinese markets open back up, Minnesota and other Midwestern states could make a play at utilizing existing infrastructure designed to carry farmed goods from Minnesota by rail to ships on the West Coast or down the Mississippi River to ships in New Orleans and then across the ocean to new buyers. Midwestern states spent years and billions of dollars building the pathways to carry goods to China.
U.S. Department of Agriculture Secretary Sonny Perdue earlier this month told farmers and agriculture industry officials that the U.S. likely had over-relied on China as a trade partner. China is the world's top soybean buyer and consumes almost 60% of U.S. soybean exports.
Perdue said the ball was in China's court when it comes to the next move in advancing dialogues about a potential trade deal.
“My goal would be to have China play fair," Perdue told farmers who packed a barn at Farmfest earlier this month. "They need to change their ways and change their culture instead of trying to build their economy on the backs of cheating.”
That comment and the lack of a clear timeline in ending the trade war didn't inspire confidence in farmers who said getting access to new markets (or renewed access to old ones) would be a big help as they endure a year of severe weather and low commodity prices.
"They've got to compromise somehow and get that done," Scott Stemstad who farms corn and soybeans in Starbuck, Minnesota, said. "We're going to lose our export market if we're not careful."
Republican leaders outspoken on USMCA
In South Dakota, the state's No. 1 industry that generates a more than $32.5 billion economic impact has felt the drag of the tariffs. But state officials have kept up their efforts to diversify trade relationships abroad.
Republican Gov. Kristi Noem has been a vocal supporter of ratifying the United States-Mexico-Canada-Agreement, which was drafted to replace the North American Free Trade Agreement (NAFTA). Meanwhile, state officials have taken steps to diversify markets, planning trips to other Southeast Asian countries and fielding visits in the Mount Rushmore State.
South Dakota Agriculture Secretary Kim Vanneman is set to travel to Vietnam this fall to meet with buyers there as well as from Thailand and Burma. And a Taiwanese delegation is set to visit the state for a farm tour next month.
"This trip holds strong potential for our producers because Southeast Asia holds great opportunity for South Dakota agricultural products," Noem's spokeswoman Kristin Wileman said. "Infrastructure is already situated to quickly get products to Asian markets and a growing middle class in many of these countries is creating demand for many of the products we grow and raise, including feedstuffs."
North Dakota Agriculture Commissioner Doug Goehring earlier this month led a delegation to Brazil in hopes of boosting its ethanol exports to the South American country. Brazil was the top importer of U.S. ethanol in 2018 and is weighing trade barriers on the fuel derived from corn.
"With the significant increases in demand predicted in Brazil over the next decade, we're optimistic that our companies will be able to help fulfill that need," Deana Wiese, executive director of the North Dakota Ethanol Council, said in a news release.
And U.S. Sen. Kevin Cramer, R-N.D., earlier this month met with Japan’s Minister of Economy, Trade, and Industry Hiroshige Seko in an effort to advance bilateral trade agreements.
"With China as a common challenge, and United States farmers sacrificing disproportionately in the Chinese trade dispute," Cramer said in a news release. "We hope Japan’s negotiators consider advancing mutually-beneficial trade agreements between our countries."