MONEY

Ambassador Branstad could be huge boost to Iowa-China trade

Donnelle Eller
deller@dmreg.com

Gov. Terry Branstad's move to an international stage as the nominee for U.S. ambassador to China could open significant opportunities for Iowa and U.S. businesses and farmers, state and national leaders said.

China's economy is second only to the United States, and it is a leading buyer of Iowa agricultural products, particularly soybeans and pork.

Chinese Vice President Xi Jinping, center, flanked by Gov. Terry Branstad, left, and Maxwell farmer Rick Kimberley, takes a tour of Kimberley's farm on Thursday, Feb. 16, 2012. Xi looked at equipment, asked about marketing and learned about drying and storing corn.

Tom Vilsack, the U.S. agriculture secretary, said Wednesday that no one is better suited for the job than Branstad, given his deep understanding of trade and his close relationship with Chinese President Xi Jinping.

Xi and Branstad have known each for decades, dating back to Branstad’s first term as governor, when Xi visited Iowa as a provincial Communist Party official.

Branstad ​"cares deeply about business and agriculture," said Vilsack, Iowa's former governor. "He’s a promoter, and that’s what ambassadors do."

But Vilsack said Branstad, who must be confirmed by the U.S. Senate, will need determination to make trade gains.

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China is Iowa's and the nation's third-largest export market and among the fastest growing. Iowa exports to China, for example, hit $1.2 billion last year, climbing 94 percent over 2013.

"He’s going to have to have a lot of patience," said Vilsack, visiting his home state Wednesday. "In the agricultural space, we’ve been conversing with our Chinese friends for quite some time about biotechnology approvals, about beef and a series of other issues that have not been easy.

"We’ve made progress, but there’s more" work that's needed, he said, adding that 30 percent of all U.S. ag sales are tied to exports.

"Farmers understand trade because it impacts their bottom line," Vilsack told members of the Iowa Farm Bureau Federation on Wednesday. "But a lot of people don't understand the connection between their job, their income and the fact that we're trading globally."

Branstad's close relationship with Xi will help the governor hit the ground running when it comes to tough discussions over currency manipulation, tariffs and reducing market barriers, said Chad Hart, an Iowa State University agricultural economist.

"Gov. Branstad doesn't have to go through a lot of introductions," Hart said. He'll know "the leaders and have a working relationship with them."

"That should result in an easier time working through some of the economic trade issues the two countries have," he said.

Vilsack said Branstad's personal relationships with Chinese leaders will enable them to have "candid conversations" that work "toward common goals."

Any market gains Branstad makes in China will help Iowa. China represents tremendous opportunities for Iowa's economic powerhouses: agriculture, manufacturing and financial services.

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Jay Byers, CEO of the Greater Des Moines Partnership, said several important Iowa businesses — Deere & Co., DuPont Pioneer, Principal Financial Group, Kemin Industries, among others — have worked to open operations and markets in China.

"Many companies are already engaged in the Chinese market, and this will help them strengthen those relationships and increase trade opportunities," he said.

Bill Northey, Iowa's agricultural secretary, said he believes Branstad's "leadership in China will be felt here in Iowa."

"His influence in this new position will not only be good for agriculture and trade, but good for America," Northey said.

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Mike Ralston, president of the Iowa Association of Business and Industry, said Branstad has always worn an economic development hat, one he's unlikely to take off as the U.S. ambassador to China.

"He's going to focus on ways parties can negotiate and reach a deal that benefits each side," Ralston said.

"I believe that's really good for Iowa and the United States, to have somebody in this role who is focused on economic development, on job creation and conducting business with each other," he said.

"It's Gov. Branstad's strong suit."