TRADE UPDATE

Food & Agriculture
November 1, 2022

By Michael Anderson, Vice President of Trade and Industry Affairs

HIGHLIGHTS

  • IPEF: Canada will pursue membership in the Indo-Pacific Economic Framework (IPEF), according to a joint press statement between Canadian Foreign Minister Mélanie Joly and U.S. Secretary of State Anthony Blinken. The two officials also announced that Canada and the U.S. will convene an inaugural Canada-U.S. Strategic Dialogue on the Indo-Pacific to further align approaches to the region.
  • USMCA: USTR announced the resolution of a sixth USMCA labor dispute involving worker rights at a Mexican production facility. The case, filed under the USMCA’s labor rapid response mechanism, involved worker rights issues at the Saint Gobain auto glass facility in Cuautla, Mexico.
  • Supply Chains: Last week, the Brotherhood of Railroad Signalmen (BRS) became the second rail union to reject a compromise railroad deal announced in mid- September by the White House resurfacing chances of a national railroad strike.
  • Food Security: Russia, on Oct. 29, announced its suspension from the Black Sea Grain initiative, following a series of drone attacks launched by Ukraine. In response, the U.N., Ukraine, and Turkey have reiterated their support for the deal, working to continue agriculture exports from the region.
  • U.S. – EU: The U.S. and EU agreed to form a joint task force to address conflicts over the controversial EV tax credit — a provision within the U.S. Inflation Reduction Act. EU Trade Commissioner Valdis Dombrovskis noted that task force discussion “will help drive our cooperation forward, addressing serious EU concerns with a view to finding joint solutions.”

“Through the USMCA, we are strengthening labor standards across North America, which creates a race to the top in trade and can help us deliver economically meaningful benefits to workers – including those that live beyond our border.”

— U.S. Trade Representative Katherine Tai announcing resolution to another labor dispute case with Mexico

Indo Pacific Economic Framework

Canada to pursue IPEF membership

Mélanie Joly, Canadian Foreign Minister and Anthony Blinken, U.S. Secretary of State
Mélanie Joly, Canadian Foreign Minister and Anthony Blinken, U.S. Secretary of State
  • Last week, Canada announced it will seek membership in the Indo-Pacific Economic Framework (IPEF) to further economic cooperation in the region. Canadian Foreign Minister Mélanie Joly and U.S. Secretary of State Antony Blinken said, in a joint press statement, “Today, we agreed to hold the first Canada-U.S. Strategic Dialogue on the Indo-Pacific to further align our approaches. And to further economic cooperation in the region, I am pleased to announce that Canada will seek membership to the Indo‑Pacific Economic Framework which is commonly known as IPEF.” “The United States and Canada are indeed Pacific nations,” Joly said. “We both believe in deepening our diplomatic and economic ties as well as strengthening the resiliency of our global supply chain.” Current members of the initiative include Australia, Brunei, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, Vietnam, and the U.S.
    • The two officials also announced that Canada and the U.S. will convene an inaugural Canada-U.S. Strategic Dialogue on the Indo-Pacific to further align approaches to the region.
    • Secretary Blinken noted the U.S. “will continue to work with Canada to advance the Americas Partnership for Economic Prosperity, to drive our hemisphere’s inclusive economic growth.” He affirmed the United States’ support for Canada joining IPEF, adding, “In the coming months, we will consult closely with other IPEF members on the development of a process for considering new members, because it’s not a decision the United States can make unilaterally, but we would welcome Canada’s participation.”

U.S. – Indo-Pacific

U.S. to host APEC forum

  • The Biden Administration announced that the U.S. will be hosting the Asia-Pacific Economic Cooperation (APEC) forum for 2023. Biden will not attend this year’s APEC forum, instead Vice President Kamala Harris will represent the U.S. in Thailand. A group of senior officials from the 21 member countries is set to meet with the Office of the U.S. Trade Representative in May, to discuss the preparatory work for the summit.
  • The U.S. last hosted the APEC forum in 2011, under the Obama Administration, where leaders from China, Russia, Japan, South Korea, and other members gathered to discuss ties with Asia and the conclusion of negotiations for the Trans-Pacific Partnership.
    • APEC members include Australia; Brunei Darussalam; Canada; Chile; People’s Republic of China; Hong Kong, China; Indonesia; Japan; the Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; the Philippines; the Russian Federation; Singapore; Chinese Taipei; Thailand; the United States of America; and Vietnam.

USMCA

USTR announces resolution of another USMCA labor dispute with Mexico

  • A sixth USMCA labor dispute involving worker rights at a Mexican production facility was resolved last week, according to a USTR press release. The case, filed under the USMCA’s labor rapid response mechanisms, involved worker rights issues at the Saint Gobain auto glass facility in Cuautla, Mexico. Following the election of a new, independent union to represent the workers in collective bargaining agreement negotiations, the complaint was resolved. USTR Katherine Tai praised the development stating, “This resolution is another historic win for workers, who will now be represented by the union of their choice as they negotiate better working conditions.” Tai added, “Through the USMCA, we are strengthening labor standards across North America, which creates a race to the top in trade and can help us deliver economically meaningful benefits to workers – including those that live beyond our border.”
    • U.S. Labor Secretary Marty Walsh commented, “The workers of Saint Gobain have freely chosen an independent democratic union through a fair election and will now have the opportunity to bargain collectively for better wages and working conditions.” Walsh continued, “This is a win for workers and union democracy, and yet another example of how labor protections in the United States-Mexico-Canada Agreement and Mexico’s labor reforms are delivering meaningful change for workers.”
    • The complaint stems from a petition by the AFL-CIO, United Steelworkers, and Mexican union Sindicato Independiente de las y los Trabajadores Libres y Democráticos de Saint Gobain México lodged in September, alleging denials of workers’ rights of free association and collective bargaining pertaining to a collective bargaining agreement approval vote in July 2022 and a scheduled vote on a collective bargaining agreement negotiation leader.

Canada opposed U.S. policies on softwood lumber

Nadia Theodore, Ambassador to the World Trade Organization, Canada
Nadia Theodore, Ambassador to the World Trade Organization, Canada
  • Canadian representative to the WTO Nadia Theodore last week voiced opposition to the U.S. position on softwood lumber, claiming that the country is aware “that their position is ridiculous.” Theodore expressed her displeasure at the longevity of the softwood issue, claiming that she did not want to move backwards with tariffs.
  • Director-General of the WTO Ngozi Okonjo-Iweala has warned the U.S. against the imposition of heightened softwood lumber tariffs, arguing that such measures would increase inflationary pressures on the commodity. However, U.S. officials have argued that the tariffs are necessary given the “unfair” trade of lumber into U.S. markets. Ottawa has thus far initiated four dispute settlement processes under USMCA to challenge the anti-dumping and countervailing duties imposed on Canadian softwood lumber. None of the disputes have been resolved, though they are still active.

USTR invites USMCA panel applications

  • The Office of USTR is soliciting applications for inclusion in the USMCA Binational Panels Roster. In a Federal Register notice, on Oct. 26, the agency wrote, “The United States-Mexico-Canada Agreement (USMCA) provides for the establishment of a roster of individuals to serve on binational panels convened to review final determinations in antidumping or countervailing duty (AD/CVD) proceedings and amendments to AD/CVD statutes of a USMCA Party. The United States annually renews its selections for the roster. The Office of the United States Trade Representative (USTR) invites applications from eligible individuals wishing to be included on the roster for the period April 1, 2023, through March 31, 2024.”
    • Binational panels review AD/CVD determinations to ensure accordance with the domestic laws of the importing USMCA Party. Panels consist of five individuals selected by the USMCA members and are drawn from a roster of 75 individuals with experience in practicing law, often judges and former judges. The application period runs through Nov. 30, 2022.

Mexico ruling on GMO traits

  • Mexico has so far approved eight traits in canola, potato, and corn seeds, and rejected 14 in corn, soybean, cotton, and canola seeds since 2021, according to Agri-Pulse. The rulings come at a concerning moment with the country’s proposed GM corn ban set to come into effect in 2024. Despite the limited data released on behalf of the Mexican government, officials have revealed that out of the 14 rejected traits, seven pertain to crops modified for resistance against glyphosate.
  • Further, the lack of clarity surrounding the specific implications that the ban would have on the industry is also raising concerns with regards to potential restrictions on biotech corn for both human and animal feed consumption. According to a recent study by World Perspectives, as of now, Mexico “has not offered clarifying guidance on which classes of corn or corn-derived products would be subject to the proposed ban” which leads industry stakeholders to assume that the ban will apply to all corn products, regardless of whether it is for feed or human use.
    • Mexico also recently issued a decree to tackle inflation which includes a list of imports to receive tariff exemptions in an effort to ensure domestic food security. The decree also explicitly mentions the 2020 biotech ban.
  • Groups, such as the National Corn Growers Association (NCGA), are calling for a formal complaint under USMCA to challenge the ban. “If the decree is enacted, the negative impact will be felt by farmers in the U.S. and by the people of Mexico,” according to Tom Haag, President of the NCGA. “We need USTR to act soon and the problem to be resolved quickly, because while some might think the clock is ticking, in reality, we’re already out of time.”

Economia reshuffling continues

  • Mexico’s Ministry of Economy is continuing its drastic restructuring with resignations of Cindy Rayo (head of the General Directorate of International Trade Disciplines), Rubisel Velázquez (head of the General Directorate of International Trade), Máximo Romero (head of the General Directorate for the Pacific Alliance), and Selene Magdaleno (head of the preparations for the Summit of Leaders for the Pacific Alliance). The General Director for T-MEC, Lydia Antonio, as well as César Remis, head of the Office for Implementation of T-MEC in the U.S., also resigned.
    • Officials also expect an announcement from the ministry detailing the appointment of a new ambassador to the World Trade Organization.

U.S. – Mexico

USTR publishes rational for declining seasonal produce petition

  • In a Federal Register notice posted last Friday, the Office of USTR provided further details on its decision to decline pursuit of a section 301 investigation into seasonal produce imports from Mexico. In the notice, the agency stated, “Due to the complexities of the factual and legal issues raised in the petition, the U.S. Trade Representative could not conclude during the 45-day statutory review period that an investigation would be effective and is not opening an investigation at this time. In light of challenges faced by U.S. producers, USTR in coordination with the U.S. Department of Agriculture (USDA) will establish a private-sector industry advisory panel to recommend measures to promote the competitiveness of producers of seasonal and perishable produce in the southeastern United States. Furthermore, USTR and USDA will work with the petitioners and producers to examine the issues raised in the petition and to consider any further actions that may be appropriate.”
    • The section 301 petition request was led by Senators Marco Rubio (R-FL) and Tim Scott (R-SC) and Representative Al Lawson (D-FL), and joined by over 20 other lawmakers, contending unfair competition by Mexico under government subsidies and sought relief for Florida growers.

Food Security

Russia pulls out of Black Sea Grain initiative

  • Russia withdrew, on Oct. 29, from the Black Sea Grain initiative following a series of drone attacks by Ukraine. Spokesperson for the U.S. National Security Council Adrienne Watson discussed the issue, stating that Russia’s cancellation of the arrangement is “again [using] the war it started as a pretext for weaponizing food.”
  • The Russian Foreign Ministry highlighted the damage inflicted by Ukraine on its ships, infrastructure, and naval base in Sevastopol, a port in the Black Sea, according to a statement released by the government. Due to the damage, the ministry announced that it would call an end to the initiative, citing the inability to secure cargo ships in the region as a key rationale. Russian officials had already voiced their concerns regarding the initiative, having previously threatened to opt out of the deal’s renewal in November. According to Russian policy analyst Alexandra Prokopenko, “The benefits for Moscow of signing the grain deal were always modest,” and the goal of the deal could have been “that Russian President Vladimir Putin simply wanted to have an additional means of exerting pressure on the West” through its enactment.
  • Despite the deal’s formal suspension, grain ships reportedly left with exports from Ukraine out of the Black Sea over the weekend. Further, the Joint Coordination Center revealed that Turkish, Ukrainian, and U.N. officials arranged for the movement of 16 ships on Oct. 31, to collect grain from Ukraine. As such, the officials expressed their commitment to sustained exports under the agreement regardless of Russia’s involvement in the deal. At the same time, the implications of Moscow’s decision are already being felt, with grain prices rising due to uncertainty in the market. Wheat is up 5.34% and corn 2.17%.
  • The grain deal had been brokered by the U.N. and Turkey earlier this year as a way to allow the continued export of agricultural products from Ukraine across the Black Sea. Roughly 9.2 million tons of goods have been exported through the deal to date.

Ukraine decreases wheat projections

Markiyan Dmytrasevych, Minister of Agrarian Policy and Food, Ukraine
Markiyan Dmytrasevych, Minister of Agrarian Policy and Food, Ukraine
  • There has been a recent shift in Ukraine’s agricultural output in response to the war with Russia, moving away from wheat towards protein crops, such as soybeans and rapeseed for higher returns and incomes. Ukrainian Deputy Minister of Agrarian Policy Markiyan Dmytrasevych stated that the government “can see that we have the reduction of the wheat and corn sowing,” but noted the need for a switch due to the loss of 20% of the country’s fertile farmland due to war production and occupation.
    • “Our farmers are learning to grow so-called marginal products or rare grains because they are more expensive when we are talking about the sales per ton,” he revealed to the Agriculture Committee of the EU Parliament. The official also announced cuts in the forecasted production of grains and oilseeds from 108 to 66 million tons.
  • The leader of the U.N. Food and Agriculture Organization (FAO) in Ukraine, Pierre Vauthier also voiced concern “that people now are starting to change the type of production, moving away from wheat” which could “have an impact on the global market because if you reduce the wheat production you have a problem.” The war is also starting to hinder wheat production due to Russia’s bombing of infrastructure necessary for final processing.
    • Indiana farmer Kip Tom summarized the situation as follows: “The days are getting shorter, the temperatures are getting lower, food and water are scarce, electricity is not available, home heating is not available and the Russians are moving towards more families in Ukraine,” all factors contributing to growing concerns for crop yields in the coming months.
  • Further, Ukraine has asked the EU to expand and permanently establish land-based export routes to Europe. “The expensive logistics is very closely connected with the choice of what is planted, what is sowed, that the wheat becomes competitive,” Minister Dmytrasevych explained.

U.S. good trade deficit reverses shrinking trend

  • The U.S. trade deficit in goods expanded 5.7% to $92.2 billion in September, from $87.3 billion in August, as exports decreased, and imports increased. September data reversed five consecutive months of decline spurred by reduced import demand and tightened monetary policy against inflation.
    • Exports of goods for September were $177.6 billion, $2.8 billion less than August exports. Imports of goods for September were $269.8 billion, $2.2 billion more than August imports.

Uptick in demand for soy oil

  • The Chief Financial Officer of oilseed company Bunge announced last week the strong growth in oil seed demand for both energy and food. A large part of the uptick is due to rising demands for biofuel, according to company executives. Similarly, palm oil prices are expected to increase due to the demand for biofuel and risks of food shortages in the wake of the Russia-Ukraine war. According to Reuters, prices for palm oil have increased by about 20% in October.
  • While rising prices will likely add to the inflationary pressures felt by consumers, high demand is expected to relieve Indonesia of its export inventories which were overstocked earlier this year. “The spread between palm oil and soy oil is massive and unsustainable,” said Managing Director of Gemini Edibles and Fats India Pvt. Pradeep Chowdhry. At the same time, output for palm oil is expected to drop significantly due to heavy rains and flooding from the third La Niña weather pattern.
  • Further, exports of sunflower oil — a common alternative to palm oil — have seen increased volatility due to disruptions in the Black Sea Grain initiative. The Black Sea ports account for 76% of all global sunflower oil exports.

Supply Chains

Railroad deal in jeopardy with second union rejection

  • Last week the Brotherhood of Railroad Signalmen (BRS) became the second rail union to reject a compromise railroad deal announced in mid-September by the White House. Union representatives voiced concerns over insufficient sick leave and an adequate cost of living adjustment in the contract proposal as railroad companies are reporting record profits. Under the compromised deal announced earlier by the White House, railroad workers’ pay would increase by 24% over five years, but the deal omitted changes to paid sick leave, a contentious issue in the negotiations.
    • The union noted in a statement, “Despite a cap and freeze on healthcare with no negative changes to the plan, General Wage Increases of 22% (24% compounded), and an agreement to bargain on the responsibility pay that Signalmen have been trying to get since 2011, BRS members spoke loudly and clearly that their contributions are worth more, particularly when it comes to a basic right of being able to take time off for illness or to prevent illness.”
    • To date, only 20% of the railroad work force, or six unions, have ratified the compromised deal, while two unions, representing 25% of workers have voted no. The remaining unions are expected to vote through Nov. 15.
    • In September, negotiators worked around the clock to broker a deal to avoid a looming strike affecting 40% of the nation’s freight traffic at a daily cost of $2 billion to the national economy and potentially crippling an already tenuous national supply chain.

Barge restrictions placed on the Mississippi

  • Disruptions along supply chains on the Mississippi River continue with further grain shipments delayed and cancelled across the route. Water levels reached the lowest point since 1988, recorded at 9.33 feet on Oct. 25. As a result, several barge companies imposed nine-foot restrictions on the lower Mississippi stretches, according to American Commercial Barge Line’s weekly newsletter. Usual shipments sit 11 to 12 feet tall, leading to an estimated 10,000 to 15,000 bushels decrease in wheat shipments.
  • The delays in grain shipments have also led to a 22% increase in barge rates, with St. Louis costs rising from $72.58 two weeks ago to $88.46 per ton last week, according to Agri-Pulse. Due to unpredictability in the ports along the river, major suppliers of grain and oilseeds are beginning to look at shipping ports along the Pacific and South America.
    • CEO of Bunge Ltd. Greg Heckman also commented on the seriousness of the situation, stating, “with what’s happening in the Black Sea and now with the logistical problems with the river here in North America, our strong South American footprint, which is always really important to us, but it’s never been more important.”

U.S. – EU

Johan Forssell, Minister for International Development Cooperation and Foreign Trade, Sweden
Johan Forssell, Minister for International Development Cooperation and Foreign Trade, Sweden

EU – U.S. to establish task force for EV credit

  • The U.S. and EU recently announced an initiative to form a joint task force that will seek to address conflicts over the controversial EV tax credit — a provision within the U.S. Inflation Reduction Act. Efforts to convene a task force are being led by European Commission President’s Head of Cabinet Bjoern Seibert alongside White House Deputy National Security Advisor Mike Pyle. The task force will hold its first meeting this week.
    • When discussing the new task force, EU Trade Commissioner Valdis Dombrovskis noted that “it will help drive our cooperation forward, addressing serious EU concerns with a view to finding joint solutions.”
  • The announcement follows resounding opposition among trade partners, such as the EU, Japan, and South Korea who consider the tax credit a direct attempt to undermine trade negotiations under WTO by decreasing U.S. dependence on other countries for materials used in the electric vehicle industry. Several EU officials and companies have highlighted the significant damage that the provision would inflict to job growth and investment in Europe.
    • The U.S. and EU will be meeting for the third Trade and Technology Council (TTC) ministerial in December, before which the countries are working to address the ongoing conflict.
  • However, tensions are rising with a recent announcement by German Chancellor Olaf Scholz and French President Emmanuel Macron regarding the market distortion that result from implementation of the tax credit. The two discussed their intention to address the issue with the entire European Union, threatening potential retaliation should the U.S. continue its efforts to enforce the provision.
    • “You have China that is protecting its industry, the U.S. that is protecting its industry and Europe that is an open house,” Macron said in an interview.
  • On Oct. 30, Swedish Trade Chief Johan Forssell echoed the concerns of German and French officials, stating that he would share his thoughts on the Inflation Reduction Act with U.S. Trade Representative Katherine Tai during their scheduled meeting on Oct. 31. Forssell revealed that Sweden will do “what [it] can to improve the relationships between the EU and the U.S. At the same time … there are some elements in the Inflation Reduction Act that are worrying and they are not in accordance with WTO rules.”

U.S. – UK

New U.K. Prime Minister maintains Kemi Badenoch as Trade Chief

  • New Prime Minister of the U.K. Rishi Sunak recently announced that he would uphold Kemi Badenoch’s position as the Secretary of State for International Trade of the U.K. Badenoch expressed her support for Sunak’s rise to office following the resignation of former Prime Minister Liz Truss. While a relatively popular candidate for the Conservative party, under Badenoch’s leadership, the U.K. missed a recent benchmark to establish a free-trade agreement with India.
    • The Secretary of State works to secure trade agreements, reduce barriers to market access, encourage economic growth, and support U.K. business. Badenoch replaces Anne Trevalyn who worked to secure post-Brexit trade deals with Australia and New Zealand, although neither has yet come into force. She also signed a digital trade agreement with Singapore which came into force in June 2022.

Trade Policy

Deputy Secretary Bronaugh to lead delegation to East Africa

  • U.S. Deputy Secretary of Agriculture Jewel Bronaugh is set to lead a group of representatives from 32 agribusiness and farm organizations to East Africa, from Oct. 31 to Nov. 4, to identify market conditions and opportunities for investment in U.S. agriculture and food products in the region. The group will meet with potential importers, processors, and distributors from several East African nations, including Kenya and Tanzania to strengthen trade relationships and increase export opportunities for U.S. stakeholders.
  • The U.S., in 2021, exported over $60 million of agriculture, fish, and forestry products to Kenya and $6.9 million in agricultural products in Tanzania. Leaders in the delegation include officials from the agriculture departments in Kansas, Wisconsin, Minnesota, Oregon, and Nebraska.
    • “I am excited to lead this delegation to foster stronger ties and build economic partnerships between the United States and Kenya and Tanzania as both of these countries present a growing opportunity for U.S. agricultural exports,” the Deputy Secretary stated.

U.S. imposes additional sanctions on Nicaragua

  • The Biden Administration, on Oct. 4, issued an executive order to expand sanctions on Nicaragua’s gold sector, threatening further trade restrictions on the country in light of President Daniel Ortega’s efforts to subdue dissent on the country’s tightening relationship with Russia. Further, U.S. Secretary of State Antony Blinken announced the imposition of visa restrictions for Nicaraguan officials, stating, “governments that deny their people’s basic rights or threaten the security interests of their neighbors should not expect that their political, economic, and trade relationships will remain unaffected.”
  • The U.S. Treasury’s decision to impose sanctions on Nicaragua’s gold sector aims to “cut off the Ortega-Murillo regime from its ability to use gold proceeds to oppress the Nicaraguan people.” The motion works in contrast to the conditions established under Nicaragua’s membership in the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR).
    • Under the executive order, the U.S. has expanded sanctions on Nicaragua and opened the door for further measures moving forward. The provision also grants authorities to impose restrictions on imports and exports with Nicaragua.

USDA announces early release of commodity tables for 2023

  • The U.S. Department of Agriculture announced that it will release tables on the 2023 projections for agriculture on Nov. 7, to prepare for the annual budget process in the executive. The tables will outline the 10-year “USDA Baseline” for major U.S. crops and livestock products. The data reflects USDA’s analysis of market conditions now and in the future given existing laws and normal weather patterns.
  • Further, USDA will issue a subsequent report in February 2023, which will measure total projections to 2032 based on commodity supply and use, farm income, and global commodity trade. The projections initially use the World Agriculture Supply and Demand Estimates (WASDE) report as a jumping point for further analysis and forecasting.

WTO

Russia and China criticize EV provision

  • During the WTO’s Committee on Subsidies and Countervailing Measures last week, China and Russia expressed their disapproval of the U.S. EV tax credit, claiming that the provision violates trade rules on non-discrimination and national treatment. During the meeting, the Chinese delegation criticized the Inflation Reduction Act (IRA) along with the CHIPS Act. The country noted that, through these provisions, the U.S. was employing a dual standard for other members of the WTO with regards to subsidies. Likewise, Russia voiced its concern over the EV tax credit’s violation of rules that prevent unfair subsidization of domestic goods over imports.
  • The U.S. responded to the claims, pointing to China’s lack of published materials indicating the legal measures used to implement subsidy programs. The delegation also urged members to encourage rapid investments in technologies for clean energy to protect the environment and address weaknesses in supply chains. Further, the U.S. denied that either the IRA or the CHIPS Act violate WTO trade rules.

 WTO releases new trade profiles

  • The World Trade Organization, on Oct. 26, released the updated set of Trade Profiles, providing data on merchandise trade and commercial services trade for 197 countries. The report includes data on imports and exports, top trading partners, and most traded products.
  • According to the report, agricultural products comprised 11.9% of U.S. exports and 7.7% of U.S. imports in 2020. The main export partners for the U.S. in 2021 were Canada (17.5%), Mexico (15.8%), and the European Union (15.5%). Further, soybeans comprised the largest U.S. agricultural export in 2021, followed by corn. Alcohol of less than 80% volume and bread were the top agricultural imports into the U.S. in 2021.

DG Okonjo-Iweala calls for updated rules for food security

  • Members of the WTO embarked on an agriculture retreat last week to address current challenges to global agricultural trade, including food security and the growing impacts of climate change. During her remarks, Director-General Ngozi Okonjo-Iweala stated that “too often, markets for food and agriculture still continue to function poorly.” As such, the DG noted the outdatedness of WTO rules for agriculture as key reasons behind the continued dysfunction.
  • The retreat involved two plenary sessions, convening WTO members and leading experts on farm trade and food security. Discussions centered around two central questions: “how should the WTO approach agriculture and what should be the key considerations going forward; and how can the WTO’s agriculture negotiations be reinvigorated to achieve possible outcomes at the next Ministerial Conference,” according to the WTO event summary.
  • Director-General Okonjo-Iweala held that population increases, climate change, and other factors have increased the need for new strategies, such as the digitalization of food and farming, to decrease risks of food insecurity. She also alluded to the problematic nature of protectionism and trade distortions that hinder the free flow of agricultural products. Food export restrictions were also identified as a key area for development. As such, the DG called on members to consider adjustments for WTO rules for agriculture, holding that “the WTO needs to do its part to drive progress towards the SDGs (UN Sustainable Development Goals), in particular the SDG on ending hunger, achieving food security and improved nutrition and promoting sustainable agriculture. The WTO needs to factor people into its agreements and negotiations.”
  • Speakers also discussed the threat of drought and environmental degradation, particularly in African countries. Executive Director of the Trade Law Center for Southern Africa (TRALAC) Trudi Hartzenberg explained that the “fundamental food system vulnerability that has many dimensions. … There are growing concerns not only about the immediate crisis dimensions, but a deteriorating trend in food security, at least over the past decade.”