TRADE UPDATE

Food & Agriculture
November 28, 2023

By Kristy Goodfellow, Vice President of Trade and Industry Affairs, and Jacob Berch, Trade and Economic Policy Intern

HIGHLIGHTS

  • WTO: From Nov. 20-22, agriculture negotiators met and discussed a permanent solution to public stockholding, domestic support, and market access in the leadup to the 13th Ministerial Conference.
  • WTO: The World Trade Report 2023, published in October, makes a case for re-globalization – or increased international cooperation – in order to address (1) national and economic security, (2) poverty alleviation, and (3) environmental sustainability.
  • USMCA: The United States lost a dispute with Canada levied through USMCA regarding Canada’s tariff rate quota (TRQ) for dairy imports. The dispute panel was established earlier this year.
  • U.S. – China: Earlier this month, China lifted Highly Pathogenic Avian Influenza-related (HPAI) restrictions on poultry imports from seven U.S. states. According to a Foreign Agricultural Service (FAS) report, “The restrictions had prevented facilities in those states from exporting raw poultry and poultry products and/or live poultry to the PRC (People’s Republic of China).”
  • Climate and Environment: World leaders, government officials, and civil society will gather over the next two weeks for COP28. For the first time, COP will include a designated “Trade Day”, scheduled to take place on Dec. 4.
  • Global Food Security: USDA’s Economic Research Service published a study that projects an increase of world food calories and crop calories from 2011-2050. Results ranged from increases of 33% to 61%.

“While the United States won a previous USMCA dispute on Canada’s dairy TRQ allocation measures, Canada’s revised policies have still not fixed the problem for U.S dairy farmers.”

—U.S. Trade Representative Katherine Tai on the outcome of a USMCA dispute with Canada

WTO

WTO Committee on Agriculture Special Session Convenes in Leadup to MC13

  • From Nov. 20-22, 2023, the WTO Committee on Agriculture Special Session met to discuss a permanent solution to the 2013 public stockholding for food security purposes ministerial decision.
  • In advance of this meeting, the Cairns Group (Argentina, Australia, Brazil, Canada, Chile, Colombia, Costa Rica, Malaysia, New Zealand, Paraguay, Peru, Thailand, Uruguay, and Vietnam) presented a revision to their paper, “Towards a Strengthened Negotiation Framework in the Domestic Support Pillar.” The group proposes that this paper be the basis for text-based domestic support negotiations, including a permanent solution to the PSH.
  • The group also discussed a new proposal from Argentina, Brazil, Paraguay and Uruguay, titled Reform of Agricultural Trade in Terms of Market Access. 
  • These negotiations are leading up to the 13th Ministerial Conference (MC13) which takes place from Feb. 26-29, 2024, in Abu Dhabi, UAE.
United States Goods Export Profile:
Image taken from the recently published WTO Trade Profiles 2023, available for download here: https://www.wto.org/english/res_e/publications_e/trade_profiles23_e.htm

New WTO Trade Report 2023 Makes Case for “Re-globalization”

  • The World Trade Report 2023 was recently published in October. It makes a case for re-globalization—or increased international cooperation—in order to address:
    • (1) National and economic security
    • (2) Poverty alleviation
    • (3) Environmental sustainability
  • The report acknowledges the current context, where “a trade-sceptic narrative has gained traction, suggesting that international trade is an obstacle to building a more security, inclusive, and sustainable world.” Through this examination, the report concludes that:
    • Global trade flows have been resilient despite difficulties in the global policy landscape.
    • Re-globalization can contribute more effectively than fragmentation to a more secure world.
    • A multilateral trading system has the potential to strengthen inclusive growth.
    • More coordinated trade and environmental governance has the potential for notable environmental benefits.
    • More trade and cooperation are needed to address the pressing challenges of our time.

USMCA

U.S. loses latest USMCA dairy dispute case

U.S. Trade Representative, Ambassador Katherine Tai
U.S. Trade Representative, Ambassador Katherine Tai
  • The United States lost a dispute with Canada levied through USMCA regarding Canada’s tariff rate quota (TRQ) for dairy imports. The dispute panel was established earlier this year. When announcing the panel, the Office of the U.S. Trade Representative stated, “the United States is challenging Canada’s revised dairy TRQ allocation measures that use a market-share approach for determining TRQ allocations, and impose new conditions effectively prohibiting retailers, food service operators, and other types of importers from utilizing TRQ allocations.”
    • U.S. Trade Representative Ambassador Katherine Tai expressed her disappointment with the dispute panel outcome stating, “Despite the conclusions of this report, the United States continues to have serious concerns about how Canada is implementing the dairy market access commitments it made in the Agreement. While the United States won a previous USMCA dispute on Canada’s dairy TRQ allocation measures, Canada’s revised policies have still not fixed the problem for U.S dairy farmers.”
    • Jim Mulhern, President and CEO of the National Milk Producers Federation, stated, “It is profoundly disappointing that the dispute settlement panel has ruled in favor of obstruction of trade rather than trade facilitation. Despite this independent panel’s adverse ruling, we’d like to thank the Biden Administration and the many members of Congress who supported us for their tireless pursuit of justice for America’s dairy sector. We urge Ambassador Tai and Secretary Vilsack to look at all available options to ensure that Canada stops playing games and respects what was negotiated.”
    • Meanwhile, the Canadian dairy industry lauded the panel outcome. David Wiens, President of Dairy Farmers of Canada, commented in a one-sentence statement, “We welcome the decision of the panel.”

U.S. – China

China lifts restrictions on U.S. poultry

  • Earlier this month, China lifted Highly Pathogenic Avian Influenza-related (HPAI) restrictions on poultry imports from seven U.S. states. According to a Foreign Agricultural Service (FAS) report, “The restrictions had prevented facilities in those states from exporting raw poultry and poultry products and/or live poultry to the PRC (People’s Republic of China).”
    • The FAS encourages “poultry meat and poultry product establishments and trade members to check for status updates on the Food Safety and Inspection Service (FSIS) Export Library or the USDA Animal and Plant Health Inspection Service iREGS websites before exporting to the PRC,” following this decision.
    • Further FAS reporting elaborated, “On November 10, 2023, the General Administration of Customs of the People’s Republic of China (GACC) Department of Animal and Plant Quarantine (DAPQ) informed the U.S. Embassy in Beijing, China that it was lifting HPAI restrictions regulating poultry and related product trade on seven U.S. states: Kentucky, Oklahoma, Delaware, North Carolina, Maine, Maryland, and Texas.”
    • Recall that on May 25, 2023, Rep. Barry Moore (R-AL), Rep. Abigail Spanberger (D-VA), and forty-one other members of Congress sent a letter to Agriculture Secretary Thomas Vilsack and U.S. Trade Representative Ambassador Katherine Tai requesting that they engage with, “Chinese counterparts and encourage them to quickly honor,” a 2020 agreement on U.S. poultry exports and lift unfair HPAI restrictions levied against U.S. states.

Climate and Environment

COP28, the annual United Nations Climate Change Conference, begins. Trade Day Dec. 4

  • World leaders, government officials, and civil society will gather over the next two weeks for COP28. COP28 runs from Nov. 30-Dec. 12, 2023, and is being hosted by the UAE.
  • For the first time, COP will include a designated “Trade Day,” scheduled to take place on December 4.
    • Several trade-focused government discussions will take place that day, starting with a session on Trade Solutions for Global Climate Action. In this session, the COP28 Presidency, UAE Ministry of Economy, and the World Trade Organization (WTO) will partner for a discussion on “global leaders uniting to promote a roadmap of trade policy options for a just and ambitions global response to climate change.”
    • Additional trade and agriculture-focused discussions will take place throughout the two weeks and can be found on the schedule here.
  • The WTO United Nationals Committee on Trade and Development (UNCTAD), International Chamber of Commerce (ICC), and the International Trade Center (ITC) will jointly host the “Trade House pavilion” to advance discussions on trade-related climate solutions.

Global Food Security

  • In September, the USDA’s Economic Research Service (ERS) published a report called “Scenarios for Global Food Consumption: Implications for Agriculture.”
  • The report explores first, how increasing populations and income affect global demand for crop and food calories by 2025; secondly, the effect of agricultural productivity growth on food prices and cropland area expansion; and thirdly, how alternative assumptions about population growth affect the size of the world agricultural system in 2050.
  • The researchers made several estimations of growth in crop calories. For example, they found that “[u]sing United Nations projections of world population, production of crop calories grew by 33 percent (low population growth), 47 percent (medium population growth), and 61 percent (high population growth) from 2011 to 2050.”