TRADE UPDATE

Food & Agriculture
January 9, 2024

By Kristy Goodfellow, Vice President of Trade and Industry Affairs

HIGHLIGHTS

• Trade Remedies: On Jan. 5, the U.S. Department of Commerce (DOC) announced findings that imported tin mill from Canada, China, Germany, and Korea were unfairly priced, and found countervailable subsidization by China. The U.S. International Trade Commission (ITC) will now determine whether the domestic industry has been materially harmed or threatened by material injury.
• African Growth and Opportunities Act (AGOA): In a Dec. 29 proclamation, President Biden announced that Mauritania will now be designated as a beneficiary sub-Saharan African country under AGOA. Meanwhile, benefits for Central African Republic, Gabon, Niger, and Uganda were terminated. Negotiations on an AGOA extension continue.
• U.S. – EU: On Dec. 28, USTR Katherine Tai announced a two-year extension of U.S. tariff rate quotas (TRQs) for steel and aluminum. Meanwhile, the EU announced the continued suspension of tariffs on U.S. goods for 15 months.
• U.S. – Mexico: On Dec. 22, U.S. Customs and Border Protection (CBP) reopened two rail crossings at the U.S.-Mexico border that had been closed for five days.
• U.S. – China: On Dec. 22, China’s State Council Tariff Commission (SCTC) announced that it will again extend the Section 301 retaliatory tariffs exclusions on 12 agricultural products. On Dec. 26, USTR announced the further extension of the reinstated and COVID-related exclusions in the China Section 301 investigation.
• U.S. – Turkey: On Dec. 19, 2023, a WTO panel published its findings on a dispute brought by the United States. The panel finds that additional duties placed on certain U.S. products are inconsistent with Turkey’s WTO obligations. Turkey imposed these tariffs on certain agricultural products, including nuts, rice, food preparations, whiskey, and tobacco, in response to U.S. Section 232 tariffs.
• Regional Trade Agreements: On Dec. 13, the EU and Chile signed the EU-Chile Advanced Framework Agreement. The agreement expands duty-free tariff access and geographical indications, among other provisions.
• CRA: Join the CRA Team! We’re looking for a Sr. Director of Communications & Public Affairs to develop and execute strategic communications plans and join our team of leaders. 

“Under President Biden’s leadership, the United States is committed to defending workers, communities, and domestic industries from global non-market overcapacity and excessive carbon emissions. By extending the European Union’s steel and aluminum TRQs for an additional two years, we can continue negotiations on a forward-looking, high-standard arrangement, while providing predictability and stability to steel and aluminum workers and their families on both sides of the Atlantic.”

—USTR Katherine Tai in a Dec. 28, 2023 press release on the extension of EU steel and aluminum tariff-rate quotas

CRA IS HIRING 

Join the CRA Team! We’re looking for a  Sr. Director of Communications & Public Affairs to develop and execute strategic communications plans and join our team of leaders. 

The Sr. Director, Communications & Public Affairs is a proactive leader with strong strategic, writing, and project management skills. The Sr. Director is responsible for branding, positioning, messaging, budget, and making communications a robust element of CRA and PBPC advocacy. The Sr. Director reports directly to the CRA President & CEO and works in close collaboration with the CRA Sr. V.P. for External Affairs and the Executive Director of the Plant Based Products Council. 

Learn more on our website. 

Anti-Dumping (AD) And Countervailing Duty (CVD) Investigation Findings For Tin Mill

AD/CVD HEARINGS AND FINDINGS ON TIN MILL

• On Jan. 5, the U.S. Department of Commerce announced findings that imported tin mill from Canada, China, Germany, and Korea were unfairly priced and found countervailable subsidies on tin mill from China.
• The final determinations were made following a hearing that took place on Jan. 4.
• DOC did not establish ADs or CVDs for tin mill from Netherlands, Taiwan, Turkey, or the United Kingdom.
• Final AD duties ranged from 2.69% for Korea to 122.52% for China. CVD rates for China ranged from 331.88% to 649.89%.
• The investigation was requested by one U.S. steelmaker—Cleveland-Cliffs.
• Consumer Brands Association notes in a press release that “currently, U.S. steel manufacturers only have the capacity to produce about 50% of domestic can manufacturing demand. The proposed tariffs, which range up to 300% on some countries, could be devastating to downstream manufacturers reliant on supply from our trade allies.”
  • “We are grateful for the continued support of domestic manufacturing and the thousands of American jobs our industry provides,” said David Chavern, president and CEO of the Consumer Brands Association. “It’s clear that these proposed tariffs would have deleterious consequences for U.S. companies and consumers alike, and we’re pleased to see ongoing championship from both sides of the aisle.”
• The U.S. International Trade Commission (ITC) will now determine whether the domestic industry has been materially harmed or threatened by material injury. The ITC must find industry prior to duties being applied.
• Additional information on the ITC investigation can be found here.

African Growth and Opportunities Act (AGOA)

PRESIDENT TAKES ACTION UNDER AGOA AND EXTENSION OF ISRAEL TRADE AGREEMENT

• In a Dec. 29 proclamation, President Biden announced several actions under AGOA.
  • The Islamic Republic of Mauritania (Mauritania) will now be designated as a beneficiary sub-Saharan African country, after benefits were revoked in 2018.
  • Mauritania satisfies criterion for treatment as a lesser developed sub-Saharan African country.
  • Benefits were terminated for Central African Republic, Gabon, Niger, and Uganda.
• In the same proclamation, President Biden announced a one-year extension of the 2004 U.S.-Israel trade agreement.
• Advance notice was provided to the Speaker of the House and the President of the Senate on Oct. 30, 2023.
• AGOA benefits are set to expire in September 2025, and discussions of extending and modifying are underway.
• In June 2023, the ITC published a report called African Growth and Opportunity Act (AGOA): Program Usage, Trends, and Sectoral Highlights, showing the agricultural imports under AGOA and Generalized System of Preferences (GSP) has steadily increased over time and reached about $700 million in 2021.

U.S. – EU

U.S. EXTENDS EU STEEL AND ALUMINUM TARIFF RATE QUOTAS (TRQS) FOR TWO YEARS

• On Dec. 28, USTR Katherine Tai announced a two-year extension of U.S. tariff rate quotas (TRQs) for steel and aluminum for two years.
• Meanwhile, the EU announced the continued suspension of tariffs on U.S. goods for 15 months.
• Several news outlets report that the European Commission is considering reviving its World Trade Organization (WTO) dispute against the steel tariffs. WTO panels have consistently found U.S. steel and aluminum tariffs, which the U.S. argued was for national security, to be inconsistent with the WTO.
• The EU retaliation list includes several agricultural products, most notably whiskey. It also includes some corn and rice products, peanut butter, cranberries, some juices, and tobacco products.
• Distilled Spirits Council of the United States (DSICUS) highlights that, without tariffs, the United States exports over $550 million in American Whiskey to the EU, accounting for 44% of all whiskey exports in 2022.

U.S. – Mexico

BORDER CROSSING REOPENED AFTER FIVE-DAY CLOSURE

• On Dec. 22, U.S. Customs and Border Protection (CBP) reopened two rail crossings at the U.S.- Mexico border that had been closed for five days.
• The crossings at El Paso and Eagle Pass, TX, were shut down by CBP in response to the influx of migrants. CBP explained that the influx of migrants forced them to transfer personnel from processing trains to helping process migrants.
• On Dec. 27, U.S. Secretary of State Antony Blinken, Secretary of Homeland Security Alejandro Mayorkas, and White House Homeland Security Advisor Elizabeth Sherwood-Randall traveled to Mexico to discuss migration management.
• Following those meetings, the U.S. and Mexico made a joint statement, which included these points:
  • “The two countries reaffirmed their existing commitments on fostering an orderly, humane, and regular migration. This includes reinforcing our partnership to address the root causes of migration, such as poverty, inequality, and violence, and for the two countries’ initiative for Cubans, Haitians, Nicaraguans and Venezuelans.”
  • “Ongoing cooperation also includes enhanced efforts to disrupt human smuggling, trafficking, and criminal networks, and continuing the work to promote legal instead of irregular migration pathways. Also, both delegations agreed on the importance of maintaining and facilitating the vital bilateral trade at our shared border.”
• The delegation is scheduled to meet again in January in Washington D.C.
• In a call for reopening of the rail corridors by National Grain and Feed Association (NGFA) and North America Export Grain Association (NAEGA), these organizations highlight that, “according to USDA data rail represents 64 percent of grain and oilseed exports to Mexico, including 15,565,138 MTs of grains and oilseeds exported via rail in 2021 and 3.45 MTs of grains and oilseeds in the third quarter of 2023.”
• As the five-day closures continued, NGFA and NEAGA reported on the critical tightness in feeding supplies for several livestock feeders in Mexico. 

U.S. – China

UNITED STATES AND CHINA BOTH EXTEND TARIFF EXCLUSIONS

• On Dec. 22, 2023, China’s State Council Tariff Commission (SCTC) announced that it will again extend the Section 301 retaliatory tariffs exclusions on 12 agricultural products. According to an FAS GAIN report, exclusion extensions were made for shrimp for cultivation, whey for feed, fishmeal for feed, alfalfa, and seven hardwood products, and exclusions are in effect through Jul. 31, 2024.
• On Dec. 26, USTR announced the further extension of the reinstated and COVID-related exclusions in the China Section 301 investigation.
  • The extensions were made through May 31, 2024.
  • As summarized by Reuters, the exclusions included industrial components such as pumps and electric motors, some car parts and chemicals, bicycles, and vacuum cleaners. The COVID-related exclusions include medical products like face masks, examination gloves, and hand sanitizing wipes.

U.S. – Turkey

PANEL AGREES WITH THE UNITED STATES THAT TURKEY’S TARIFFS VIOLATE WTO COMMITMENTS

• On Dec. 19, 2023, a WTO panel published its findings on the dispute brought by the United States. The panel finds that additional duties placed on certain U.S. products are inconsistent with Turkey’s WTO obligations.
• Notably, the WTO panel concluded that Turkey’s additional duties were inconsistent with GATT 1994 because tariff rates were set above Turkey’s bound schedule (Article II:1(a) and (b)) and because the new tariffs were only imposed on U.S.-origin products (GATT Article I:1).
• Turkey implemented these duties in response to U.S. Section 232 tariffs on steel and aluminum products, which were also found by a WTO panel to be inconsistent with GATT obligations.
• Turkey’s tariffs were imposed on many agricultural products, including nuts, rice, food preparations, whiskey, and tobacco. Tariffs range from 4-70%.
• Recall that on Oct. 31, 2023, Members of Congress from California sent a letter to USTR Katherine Tai requesting engagement with Turkey on retaliatory tariffs.
• Since the WTO Appellate Body does not currently have enough people, it will not be able to consider the panel findings if Turkey appeals.

Regional Trade Agreements

EU-CHILE SIGN ADVANCED FRAMEWORK AGREEMENT

• On Dec. 13, the EU and Chile signed the EU-Chile Advanced Framework Agreement.
• According to a GAIN report by FAS, this agreement modernizes their 2003 trade agreement and:
  • Expands market access (the percentage of Chilean exports to the EU given tariff reductions goes from 94.7% to 99.6%)
  • Includes new chapters on productivity, small and medium enterprises (SMEs), sustainability, gender, and digital trade
  • Includes protection for 216 geographical indications, including feta, gruyere, kölsch, and parmesan
• The agreement provides improved market access to the EU for Chilean olive oil, beef, pork, poultry, milk, and salmon.
• EU Executive Vice President and Commissioner for Trade, Valdis Dombrovskis commented, “Today marks a momentous occasion in EU-Chile relations. This modern, ambitious deal will be beneficial for our economies, creating new opportunities for our SMEs in particular, while helping us diversify our supply chains. Strengthening ties with a trusted partner like Chile will benefit the EU across a range of geopolitically important areas. It boasts wide-reaching sustainability commitments to help both sides achieve the green transition.”