When it comes to agricultural markets and trading partners over the next 10-20 years, geopolitical strategist and author Peter Zeihan suggests looking south to Mexico.
Mexico’s economic boom and the likely decline of China as an economic power were the main themes of Zeihan’s opening address to the 117th annual meeting of the Washington State Tree Fruit Association, which opened on Monday at the Yakima. Convention Center.
Zeihan posted demographic charts for the world’s economic powers – the United States, Canada, Japan, China and Europe – which show declining demographic trends that will lead to a labor crisis as members of the the global “baby boom” generation that followed the age of WWII. , retire and die.
China, with its authoritarian regime and one-child policy implemented nearly 40 years ago, faces a severe shortage of workers, Zeihan said, and the COVID-19 outbreak and lockdowns accompanying it only made matters worse for its economy.
“If you depend on China for your exports or for your equipment, you need to start making a few calls,” Zeihan said in the almost full main ballroom of the convention center. “Mexico could be the replacement.”
Trade issues were discussed by several speakers on Monday, including Mark Powers, president of the Northwest Horticultural Council. He noted that Mexico and Canada accounted for 42% of all cherry exports, 46% of all apple exports and 70% of all pear exports.
“This is the most important region in the world for commerce for us,” said Powers. “China is another story… China is not something you can count on. “
Statistics show that China’s cherry purchases have declined 64% in volume since 2017, Powers said, with the value of cherry sales falling from $ 141 million to $ 56 million.
Trade with India has also “fallen off a cliff” after adopting retaliatory tariffs on agricultural products in response to US tariffs on steel and aluminum.
Zeihan noted that COVID-19 has altered demand patterns for consumers, from services to goods, focusing our “consumption footprint” in an electronic world. And just as it looked like the economy could return to normal earlier this year as vaccinations began, the delta variant has caused a surge of cases and added uncertainty to both the demand for goods and the quantity of workers available to produce and transport them.
“Until we’re all on the same page with what we think of COVID… our demand profile will continue to whip,” Zeihan said.
Its main argument was that the era of globalization, and the global trade and production that went with it, are about to come to an end.
“Trump and Biden are both drastically anti-globalization and very anti-trade,” Zeihan said. “It’s a problem for people in this room… but they’re both NAFTA-friendly, so Mexico could become our number one export market (market). “
Mexico is developing rapidly and is poised for positive population growth, he said. Given the choice, he also prefers to buy American products.
Zeihan identified Southeast Asian countries as another potential market for US technology and agricultural products.
A former employee of the US State Department, Zeihan’s latest book, “Disunited Nations,” came out last year. More information about his work and his strategic planning company is available at zeihan.com