To: Interested Parties
From: Marc A. Ross @ Caracal Global + Greg Levesque @ Pointe Bello
Date: December 8, 2016
Branstad Briefer: Why Iowa's Longest-Serving Governor Makes Sense for China Ambassador
Branstad has known and engaged Chinese President Xi Jinping since 1987. Since that time, the two have forged a mutually respectful and cooperative relationship. Branstad has rightly acknowledged that the U.S.-China bilateral relationship is at a critical point. Branstad clearly understands that as ambassador he will be on the frontlines ensuring the two largest economies in the world maintain a collaborative and cooperative relationship.
American Politics + Midwest Voters
As an elected official that has been in and out office since 1982, Branstad has faced voters, asked for their vote, and governed effectively. Branstad, the nation's longest-serving governor, now in the middle of his sixth four-year term, understands that many Americans believe the nation is at an economic crossroads, one that is export dependent but at times impacted negatively by imports and cheaper overseas manufacturing. Branstad will be able to convey to Beijing how American voters are seeking bold change to renew the country’s middle class and solidify America’s essential role as a global economic leader in the future. Understanding voters first-hand and being able to explain the challenges and opportunities of globalization shaped by American politics is unique and should be well received in Beijing.
Branstad has steered clear of commenting on the growing subset of hot button issues in the US-China relationship, including cybersecurity, human rights, and the South China Sea believing that foreign policy was best addressed at the national level. As governor, Branstad has acknowledged challenges in the relationship, but chose to focus on building “long-term friendships and relationships” with China that supported trade and Iowa jobs.
Renewable Energy + Climate Change
While publicly acknowledging that climate change is a “global issue,” Branstad has focused on ensuring Iowa remains a competitive state for business and attracting high-quality and high-paying jobs. Branstad has sought to position Iowa renewable energy companies to benefit from Chinese investment and trade opportunities.
On the sidelines of President Xi Jinping’s visit to Seattle in September 2015, Branstad, five other U.S. governors, and local Chinese officials signed an accord on clean energy and economic development vowing to take actions to reduce transportation emissions and support clean energy technologies. As governor, he has supported Iowa’s growing wind energy industry, which ranks second in the nation for total installed capacity.
Trade + Cybersecurity + IP Protection
Branstad describes himself as a “strong supporter” of free trade, touting its vital importance to Iowa’s economy and the U.S. agricultural industry writ large. He has continually pushed members of Congress to support free trade agreements. In 2013, he signed a bipartisan governors’ letter to House and Senate leaders encouraging forward progress on the Trans-Pacific Partnerships (TPP), the Transatlantic Trade and Investment Partnership (T-TIP), and the Trade in Services (TISA) agreements.
In an April 2015 letter, Branstad urged members of the Iowa Congressional Delegation to support passage of Trade Promotion Authority and reauthorization of the Export-Import Bank (Ex-Im Bank) to help advance “market-opening free trade agreements.” According to the letter, countries participating in the TPP and T-TIP agreements purchased $11.3 billion or 64 percent of Iowa exports in 2013.
Branstad’s pro-trade record and advocacy for improved US-China trade relations suggest he would be a staunch supporter for completing a U.S.-China bilateral investment treaty (BIT) should it become a Trump administration priority.
In addition to promoting positive U.S.-China trade relations, Branstad is sure to be a strong advocate on cybersecurity issues and intellectual property rights. Since 2013, Branstad has been working to support Iowa agriculture companies after seven Chinese nationals were arrested by U.S. authorities for stealing seeds from Iowa fields with plans to send them back to China. The Branstad administration rolled out the first ever Iowa Cybersecurity Strategy in August 2016, which seeks to improve the state’s response to and proactively mitigate risks from cybersecurity events.
Economics + Globalization
Iowa has long been recognized by CNBC as one of the "Top States for Business." Iowa is often viewed as an agriculture state, but in reality farming is a small portion of the state’s diversified economy. Iowa is also a leader in manufacturing, biotechnology, finance and insurance services. This understanding of the necessity to execute a dynamic and multi-sector economy will be helpful in Branstad’s role as a champion for American businesses seeking improved access to Chinese markets, clear enforcement of IP violations, and equal treatment under Chinese law.
Given Trump’s recent phone call with Taiwan president Tsai Ying-wen, it’s worth highlighting that Governor Branstad has deftly navigated the state of Iowa in its dealings with Taiwan over the last 20 plus years. In 1989, Gov. Branstad and his Taiwanese counterpart Chiu Chuang-huan signed the Iowa-Taiwan Friendship Agreement establishing Taiwan as a “sister state.” While Branstad has met with Taiwanese delegations over the years, Iowa Lieutenant Governor Kim Reynolds has regularly stepped in to manage Taiwan-related matters.
Taiwan is a major export market for Iowa soybeans and was the state’s 6th largest export market in Asia in 2015. The Taiwan Agricultural Trade Goodwill Mission delegation frequently visits Iowa to sign letters of intent to purchase agricultural products. Branstad hosted the Taiwanese trade delegation in 2011, highlighting Taiwan’s importance as an agricultural market for Iowa.
Branstad’s administration carried out trade missions or shows to Taiwan in November 2014 and August 2015, respectively.
Averting a Trade War
Branstad grasps that a trade war with China will hurt both nations, especially Iowa and the state’s farm economy. U.S. agriculture and food exports to China totaled more than $20.2 billion in 2015, half of which was soybean sales. China is also the world’s largest importer of pork and distillers grains, a byproduct of ethanol.
Just this fall, Chinese officials visiting Des Moines signed an agreement to buy $2.1 billion worth of U.S. soybeans, adding to a $1.8 billion order from this summer. According to Iowa Soybean Association, these two purchases account for more than 60 percent of Iowa’s 2016 soybean crop. Branstad understands that negotiations and securing win-win deals between the U.S. and China is not only essential, but further interconnects our two economies.
Timeline of Branstad-China Relationship
Branstad signs a formal agreement establishing the sister-state relationship between Hebei province and Iowa
Branstad leads fifty-person delegation to Hebei
Xi Jinping, then a county-level party leader from Hebei, visits Iowa for the very first time and meets with Branstad at the state capitol in his formal office
Branstad meets with Chinese provincial governors in Salt Lake City, Utah
Branstad has the honor of meeting with Xi, then vice-president, in the Great Hall of the People; Branstad extends Xi an invitation to visit Iowa
Vice President Xi visits Des Moines and Muscatine after 27 years; Branstad sends a personal thank-you to Xi and invited him to an “old friends” reunion dinner
Branstad and Xi’s 20 Iowa friends return to China for an “old friends” reunion dinner
“Coming here is really like coming home. You can’t even imagine what a deep impression I had from my visit 27 years ago to Muscatine because you were the first group of Americans that I came into contact with.” - Xi Jinping, 2012
Branstad visits Beijing, Tianjin, Baoding City, and Shijiazhuang in trade mission to China. Meets with Xi
Branstad leads 5th trade mission to China with other governors led by Branstad and meets with President Xi
Branstad is recognized by the U.S.-China Business Council for his leadership in expanding and strengthening bilateral commercial relationships with China on the state and local level
Branstad meets with President Xi in Seattle, Washington to discuss trade opportunities between Iowa and China
Branstad leads 6th Chinese trade mission to expand beef and pork exports
Iowa’s Exports to China: 2006 – 2015
Growth in Goods Exports to China: 257%
Growth in Goods Exports to Rest of World: 31%
Growth in Services Exports to China: 488%
Growth in Services Exports to Rest of World: 89%
Source: US-China Business Council