TRADE UPDATE

Food & Agriculture
February 6, 2024

By Kristy Goodfellow, Vice President of Trade and Industry Affairs, and Natalie Diez, Trade and Economic Policy Intern

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HIGHLIGHTS

  • Congressional Agricultural Trade Caucus: On Wednesday, Jan. 31, U.S. Representatives Jimmy Panetta (D-CA), Adrian Smith (R-NE), Jim Costa (D-CA), and Dusty Johnson (R-SD) announced the launch of the bipartisan Congressional Agricultural Trade Caucus.
  • WTO: In preparation for the upcoming 13th Ministerial Conference (MC13), the Chair of the agriculture negotiations issued a five-page draft text. The text includes provisions on agriculture domestic support, market access, and public stockholding, among others.
  • USMCA: A tentative schedule was published for the USMCA dispute in which the United States is challenging Mexico’s ban on genetically engineered corn. The schedule estimates the hearings will take place in June and the final report will be issued in November.
  • U.S. – China: Tariff discussions are back in the headlines after Nikki Haley criticized Trump’s proposed 10% tariff on all imported goods and 60% on Chinese imports. Many other policy experts are weighing in on tariffs.
  • Trade Promotion: USDA announced it will fund $65 million for the launch of the Assisting Specialty Crop Exports (ASCE) and $72.9 million to the Specialty Grant Program (SCBGP).
  • U.S.-EU: On Jan. 30, the U.S.-EU Trade and Technology Council held its fifth ministerial meeting in Washington D.C., and a stakeholder event on the margins of the meeting included several topics that related to agricultural trade.

“Increasing—and maintaining—market access for our first-class products through rules-based trade strengthens our economy, increases economic security with our allies, and benefits consumers worldwide. I thank my fellow co-chairs for joining me in this effort to advance bipartisan trade policy.”

—Rep. Adrian Smith commenting on the new Congressional Agricultural Trade Caucus

CONGRESSIONAL TRADE CAUCUS LAUNCH

HOUSE LAUNCHES AGRICULTURAL TRADE CAUCUS

  • On Wednesday, Jan. 31, U.S. representatives Jimmy Panetta (D-CA), Adrian Smith (R-NE), Jim Costa (D-CA), and Dusty Johnson (R-SD) announced the launch of the bipartisan Congressional Agricultural Trade Caucus.
  • According to Rep. Jimmy Panetta’s press release, the Caucus seeks to “advance and promote policies vital to U.S. agriculture, including boosting agricultural exports, facilitating food and agriculture trade, and knocking down unnecessary trade barriers.”
  • Rep. John Duarte (CA-13) announced that he will be joining the Caucus. Others are also expected to join following the initial launch.
  • The Distilled Spirits Council of the United States (DISCUS) hosted a launch celebration on Jan. 31, during which the co-sponsors of the Caucus all delivered remarks to a large group of Congressional staff, U.S. agriculture stakeholders, and pro-trade foreign government representatives.
Farmers for Free Trade Executive, Brian Kuehl, and Representative Adrian Smith at the Ag Trade Caucus launch, hosted by the Distilled Spirits Council of the United States

WORLD TRADE ORGANIZATION

AGRICULTURE CHAIR ISSUES DRAFT TEXT

  • In preparation for the upcoming 13th Ministerial Conference (MC13), the Chair of the agriculture negotiations issued a five-page draft text for agricultural negotiations.
  • On Monday, Feb. 5, Members met for an informal open-ended Committee on Agriculture – Special Session, which included discussion of the draft text.
  • In an update from the WTO, the Chair stated, “With only four weeks to go before the 13th Ministerial Conference, the negotiations are entering their final stretch. It’s time to focus on what could be achievable at MC13, and also pave the way for a more substantial outcome at MC14.” 
  • The draft text outlines possible ways forward on seven negotiating topics:
    • domestic support to the farm sector;
    • access to agricultural markets;
    • a proposed new “special safeguard mechanism” (SSM), which would allow developing countries to raise tariffs temporarily in the event of a sudden surge in import volumes or drop in prices;
    • export restrictions on food;
    • “export competition,” covering measures that are viewed as similar to export subsidies;
    • cotton; and
    • the procurement of food at government-set prices under developing countries’ public stockholding programmes for food security purposes.
  • MC13 will take place in the United Arab Emirates, Abu Dhabi from Feb. 26-29.

U.S.-MEXICO-CANADA AGREEMENT (USMCA)

USMCA or U.S.-MEXICO GM CORN DISPUTE SETTLEMENT

  • A tentative schedule was published for the USMCA dispute in which the United States is challenging Mexico’s ban on genetically engineered corn. The schedule estimates the hearings will take place in June and the final report will be issued in November.  
  • The dispute launched in August 2023, after Mexican President Andrés Manuel López Obrador set restrictions over GM corn use.
  • Notably, the final report is expected to be issued after Mexico’s presidential election and possibly after the U.S. election.
  • Agriculture Secretary Tom Vilsack stated that the current frontrunner in the Mexican presidential election, Claudia Sheinbaum, might have different views on the dispute.

U.S.-China

U.S. PRESIDENTIAL CANDIDATES ONCE AGAIN FOCUS ON TARIFFS

  • In a recent interview, CNBC reported Nikki Haley challenged Donald Trump’s proposed 10% tariff on all imported goods. The headline reads “Haley Hits Trump on Tariffs Ahead of Her Wall Street Fundraisers.”
  • Haley’s comments on Trump’s tariff proposal focus on the additional financial burden that the tariffs may place on Americans.
  • Trump has been once again advocating for “re-industrializing” the United States through tariffs.
  • Trump has also recently mentioned a plan to target China through a 60% tariff on all imported Chinese goods. Trump explains the tariffs as building a barrier with all countries, especially China, to reduce the cost of production of U.S. goods, make it more expensive to produce outside of the U.S., and to avoid relying on importing foreign goods.
  • The Presidential candidate discussion of tariffs has set off discussions and commentary among policy analysists. 

TRADE PROMOTION

STRENGTHENING THE U.S. SPECIALTY CROPS SECTOR

  • The USDA will be funding $65 million for the launch of the Assisting Specialty Crop Exports (ASCE) and $72.9 million to the Specialty Grant Program (SCBGP).
  • An announcement from Agriculture Secretary Tom Vilsack emphasizes USDA’s support of the U.S. specialty crops industry.
  • ASCE focuses on increasing global exports and expanding new markets. USDA’s Foreign Agricultural Service will support the expansion of U.S. and foreign food safety systems.
  • SCBGP aims to create innovative projects that will support competition in the U.S. specialty crops sector. The USDA’s Agricultural Marketing Service will provide grants to all 50 states in the U.S., as well as several state departments of agriculture in other countries.
  • USDA Under Secretary for Marketing and Regulatory Programs Jenny Moffitt stated: “Programs like these are key components of the Biden-Harris Administration’s efforts to support American agricultural producers and rural America by transforming our food system from one that benefits a few to one that benefits many.”
  • According to USDA, exports in the specialty crop industry generated $24.6 billion in FY2023.
  • The Specialty Crop Competitiveness Initiative (SCCI) is another investment/project that supports specialty crop producers. Some objectives of the SCCI include minimizing costs, regulating pesticides, diseases, and competition in markets.

U.S.-EU

U.S.-EU TRADE & TECH COUNCIL (TTC)

  • The White House released a statement that highlights the U.S.-EU Trade and Technology Council’s (TTC) fifth ministerial meeting that was held in Washington D.C.
  • U.S. co-chairs strongly expressed the importance of subjects such as strengthening of economic security, applying mechanisms to safeguard technologies, and managing export control regimes.
  • A TTC Stakeholder Event had several topics that related to agricultural trade, notably a session on “Empowering Transatlantic Collaboration: Enhancing Sustainability in the U.S. and EU Feed Sectors.” Co-organizers of that session were the American Feed Industry Association, U.S. Soybean Export Council, and the European Feed Manufacturers’ Federation.
  • Other key issues that were explicitly discussed during the TTC were the expansion of transatlantic cooperation, improving technologies, and creating innovations, among others.
  • It was noted that progress has been made through the Joint Roadmap on Trustworthy AI and Risk Management, but improvements on promoting interoperability to artificial intelligence still require attention.
  • The sixth TTC ministerial meeting will be held in Belgium in Spring 2024.
From @USTradeRep on Twitter/X. USTR Ambassador Tai and European Commission Executive Vice President Valdis Dombrovskis