Five foreign ambassadors will travel across Montana on a trade promotion tour with U.S. Sen. Max Baucus, D-Mont., next week.
Representatives from China, Germany, Japan, Peru and Canada, will spend three days discussing Montana trade and investment in advance of an economic summit in Butte Sept. 16. Past tours organized by the senator have included business announcements at every stop.
“We’ve proven that when we bring the right buyers to Montana, our products and businesses sell themselves,” Baucus said. “The more we can open new markets for Montana products around the world, the more jobs we can support here at home.”
Some the nations are already major stakeholders in the state’s economy.
Canada and China rank first and second as destinations for Montana products, according to the State Commerce Department, while Japan buys half of the state’s exported wheat.
In 2012, Montana exported $1.6 billion in non-farm products, according to the U.S. Trade Representative.
Exports to Canada totaled $634 million and China $105 million. Chemicals were the leading nonfarm export, followed by minerals, machinery, oil and coal. Billings exports totaled $102 million.
In particular, Japan’s role in Montana’s economy, grew significantly in the past decade as Asian companies began building and buying state-of-the art grain elevators across the state in an attempt to secure wheat in a competitive world market.
Japanese companies now have ownership of 13 of Montana’s 21 largest grain elevators, each with the ability to accommodate grain trains of 100 to 120 railcars. The largest stakeholder is Marubeni Corp., which owns eight elevators branded as either Columbia Grain or United Grain.
Mitsui & Co., which owns three elevators branded as United Grain, is a distant second. A third Japanese stakeholder, ITOCHU International, has interest in three elevators branded as EGT, a company ITOCHU co-owns with Bunge North America.
Japan has been a primary customer for Montana wheat for decades. Treasure State farmers produce 150 million bushels of wheat annually, 80 percent of which is shipped through the Pacific Northwest to buyers in Asia. Japan buys half of that wheat.
But Japan also charges some of the developed world’s highest tariffs on farm products and imposes age restrictions on U.S. beef that Montana ranchers consider unreasonable.
Presently, no American beef older than 21 months may be sold in Japan. The restriction is a holdover from the 2003 discovery of bovine spongiform encephalopathy, aka mad cow disease, in a Washington state dairy cow. The discovery halted beef sales to Japan initially and normal trade conditions have been slow to recover.
Agriculture isn’t the only issue on the table with Japan.
Japanese-owned Takeda Vaccines bought the Bozeman-based pharmaceutical research laboratory LigoCyte for $60 million last fall. LigoCyte specializes in treatments for inflammatory and infectious diseases, including the only vaccine in clinical trials for norovirus, the leading cause of food borne illness in the United States.
Baucus would like to see Takeda expand LigoCyte’s presence in Bozeman. The senator will tour LigoCyte with Japanese Ambassador Kenichiro Sasae.
China is both an importer of raw Montana materials and chemicals, as well an exporter of products used in Montana manufacturing.
The ambassadors will tour Applied Materials in Kalispell, which makes parts used in cell phones, flat screen televisions and other electronics made in China and Japan.
China-based Goldwind constructed its first Montana wind farm in Shawmut last year. China-made parts also are used in some Montana manufacturing, including golf bags assembled at Sun Mountain Sports in Missoula. Ambassador Cui Tiankai will tour Sun Mountain late next week.
Currently, the U.S. tariff on parts Sun Mountain imports from China is 1.5 percent, but the rate increases at year’s end to 7 percent with new legislation to suppress the rate. Baucus currently has a bill to keep the rate low.