Beef Magazine Sep 4, 2020

Source: Steve Dittmer | Beef Magazine https://www.beefmagazine.com/commentary/are-beef-exports-winner-or-victim-international-politics

Are beef exports the winner or victim in international politics?

International trade is, at its core, a political animal.

While we concentrate on COVID-19 effects, cattle markets and weather, international politics could affect our export potential. That includes events in Japan, South Korea, the U.K., Canada and China.

First, Japan and South Korea

Japanese Prime Minister Shinzo Abe, the key partner with President Trump in getting the momentous U.S.-Japan trade agreement, has been forced to resign. Intestinal problems that he has fought for some years finally made him unable to continue as prime minister. His party had to pick between his second in command and another protégé for party leader. Because the party has a big majority, whoever they selected was bound to become prime minister.

The party picked the man who had served as Abe’s right-hand man, Yoshihide Suga. He was believed to hold many of the same views as Abe and once he was selected, he made it very plain that he would continue Abe’s policies of opening Japan’s economy and close alliance with the U.S. Abe’s eight-year tenure has done more to get Japan’s economy reinvigorated than any Japanese administration in decades.

Not a diplomat by experience, Suga will have to tread carefully, as Japan’s biggest trading partner is China, while U.S.-China relations remain fraught with tension. There are two schools of thought in Japan, one favoring concentration on close ties with the U.S., another more concerned with ties to Japan’s number one trading partner, China.

It’s been suggested that Suga could do the most good by forswearing any new sales tax increases. Japan has instituted increases in 1997, 2014 and 2019, each time hammering economic growth. Suga had been Abe’s point man on privatizing some industries, significant government spending, encouraging more trade and getting more foreign labor

South Korea is imposing very strict conditions on anyone coming into their country, as well as stricter conditions in higher populated cities, putting new coronavirus cases on a downward trend. The economy is gradually recovering, although exports continue to lag behind last year’s figures. Improving demand from the U.S. and China is helping.

Tensions across the pond

Meanwhile, U.K.-EU trade negotiations are not going smoothly. As has been the case all along, the problem is how to handle Northern Ireland, which is part of the U.K. and not in the EU, and the Republic of Ireland, which is a part of the EU...

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