TRADE UPDATE

Food & Agriculture
March 12, 2024

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

SUBSCRIBE

HIGHLIGHTS

  • USTR: On Mar. 1, USTR released its 2024 Trade Policy Agenda and 2023 Annual Report. The 2024 Trade Policy Agenda includes “Supporting U.S. Agriculture” as one of four components of “Advancing a Worker-Centric Trade Policy.”
  • USDA: On Mar. 11, USDA Secretary Tom Vilsack announced the finalization of a rule on voluntary “Product of USA” labeling for meat, poultry and eggs.
  • U.S.-China: On Feb. 29, the Republican Study Committee (RSC) Chairman Kevin Hern and National Security Task Chairman Joe Wilson introduced the Countering Communist China Act (HR 7476). Notably for agriculture, the Act ends Permanent Normal Trade Relations with China; stops CCP entities from purchasing American real estate and farmland; and authorizes the President to enter into free trade agreements with seven listed countries.
  • Sugar: On Mar. 7, USDA Foreign Agricultural Service announced the increase in the quantity of raw cane sugar eligible to enter at the lower rate of duty in FY2024 by 125,000 MTRV.
  • U.S.-Mexico: On Mar. 5 and Mar. 6, Mexico’s written submission and exhibits in the USMCA genetically modified corn dispute were published. The documents are available publicly by the USMCA Secretariat.
  • Supply Chain: On Mar. 7, USTR published a Federal Register notice seeking input to inform the development of trade and investment policies that promote supply chain resilience.
  • Trade Remedies: On Feb. 27, the U.S. International Trade Administration (ITA) submitted notice of the USMCA Request for Panel review related to the U.S. anti-dumping determination for tin mill products. The request was filed on behalf of the Government of Canada and ArcelorMittal Dofasco G.P.
  • FAO Food Price Index: On Mar. 8, the FAO Food Price Index (FFPI) was released. The index was down 10.5% from its corresponding value a year ago.

“The Administration will continue [sic] expanding market access opportunities in foreign markets through the negotiation of agreements that include provisions intended to eliminate or reduce nontariff barriers that can hamper market access for U.S. agricultural products. The Administration will seek to include in these agreements enforceable provisions that build on WTO obligations, including provisions to ensure that sanitary and phytosanitary (SPS) measures are science-based, developed through transparent, predictable process, and implemented in a nondiscriminatory manner.”

—USTR in the 2024 Trade Policy Agenda and 2023 Annual Report

USTR

2024 TRADE POLICY AGENDA AND 2023 ANNUAL REPORT

  • On Mar. 1, USTR released its 2024 Trade Policy Agenda and 2023 Annual Report.
  • The 2024 Trade Policy Agenda includes “Supporting U.S. Agriculture” as one of four components of “Advancing a Worker-Centric Trade Policy.” The agenda notes that the Administration will “continue [sic] expanding market access opportunities in foreign markets through the negotiation of agreements that include provisions intended to eliminate or reduce nontariff barriers that can hamper market access for U.S. agricultural products. The Administration will seek to include in these agreements enforceable provisions that build on WTO obligations, including provisions to ensure that sanitary and phytosanitary (SPS) measures are science-based, developed through transparent, predictable process, and implemented in a nondiscriminatory manner.”
  • As in previous years, the agriculture section of the 2024 Trade Policy Agenda does not outline specific goals, but rather reflects on 2023 successes, such as:
    • Japan implementing a new biofuels policy;
    • Bangladesh allowing cotton without fumigation on-arrival;
    • India and the United States terminating six WTO disputes and India agreeing to certain tariff reductions;
    • The EU continuing to use a simplified export certificate for wine; and
    • South Africa lifting restrictions on U.S. poultry and poultry products from 27 U.S. states.
  • Several other accomplishments are highlighted later in the report, including the EU’s approval of 13 biotechnology products; entry into force of the U.S.-Japan beef safeguard; and the signing and implementation of the Brexit Tariff-Rate Quota agreement.
  • USTR stated on the ongoing USMCA dairy concerns that they will “not hesitate to use all available tools to enforce our trade agreement and ensure that U.S. workers, farmers, manufacturers, and exporters receive the full benefits of the USMCA.”
  • Regarding the USMCA corn dispute, USTR stated: “Through the dispute panel, the United States will seek to resolve our concerns and help ensure that consumers can continue to access safe and affordable food and agricultural products and American farmers can continue to access the Mexican market and use innovative tools to respond to climate and food security challenges.”

USDA

“PRODUCT OF USA” FINAL RULE ANNOUNCED

  • On Mar. 11, USDA Secretary Tom Vilsack announced the finalization of a rule on voluntary “Product of USA” labeling for meat, poultry, and eggs.
  • The rule defines the conditions under which meat, poultry, and egg products may be labeled as a product of U.S. origin. 
  • Unlike the similar country of origin rule that was disputed at the WTO (DS384), “Product of USA” origin labeling remains voluntary, and these requirements need to be met only if a product is labeled.
  • Both industry and government representatives in Canada and Mexico have expressed concern about this measure through rule making comments and in meetings between senior officials.

U.S.-CHINA

INTRODUCTION OF THE “COUNTERING COMMUNIST CHINA ACT”

  • On Feb. 29, the Republican Study Committee (RSC) Chairman Kevin Hern and National Security Task Chairman Joe Wilson introduced the Countering Communist China Act (HR 7476).
  • The RSC press release calls this act the strongest legislation against the Chinese Communist Party (CCP) and emphasizes that  it will  prioritize economic security and safety.
  • RSC National Security Task Force Chairman Joe Wilson stated: “The CCP dictatorship in China run by Xi Jinping threatens global security, endangers our allies and is destroying the future of the people of China. I am grateful to support this important effort by the Republican Study Committee to counter the CCP and root out their malign influence in our education system and our economy.”
  • Notably for agriculture, the Act:
    • Ends Permanent Normal Trade Relations with China;
    • Stops CCP entities from purchasing American real estate and farmland; and
    • Authorizes the President to enter into free trade agreements with Taiwan, New Zealand, United Kingdom, Malaysia, Thailand, Philippines, and Indonesia.

SUGAR

USDA SUGAR TARIFF-RATE QUOTAS (TRQs)

  • On Mar. 7, USDA Foreign Agricultural Service announced the increase in the quantity of raw cane sugar eligible to enter at the lower rate of duty in FY2024 by 125,000 MTRV.
  • With this addition, the overall FY 2024 WTO raw sugar TRQ for FY2024 is 1,242,195 MTRV.
  • According to the Federal Register notice, “these actions are being taken after a determination that additional supplies of raw sugar are required in the U.S. market.”
  • During the February 2024 USDA Agriculture Outlook Forum, JSG Commodities estimated 1,208 STRV in high-tier imports in 2024.
Full presentation available at: https://www.usda.gov/sites/default/files/documents/AOF-2024-Dobrydney.pdf

U.S.-Mexico

USMCA GENETICALLY ENGINEERED CORN DISPUTE

  • On Mar. 5 and Mar. 6, Mexico’s written submission and exhibits in the USMCA genetically modified corn dispute were published.
  • The documents are available publicly for download by the USMCA Secretariat.
  • Recall that on Jan. 29, the USMCA panel issued an updated timeline for the dispute.  According to that document,
    • Written rebuttal submission by the United States is due on Mar. 15;
    • Written rebuttal submission from Mexico is due May 14 (21 days after the U.S. rebuttal);
    • A Hearing is scheduled for the week of Jun. 25; and
    • Final report and translation are expected in November 2024.

SUPPLY CHAIN RESILIENCE

USTR SEEKS PUBLIC COMMENT ON PROMOTING SUPPLY CHAIN RESILIENCE

  • On Mar. 7, USTR published a Federal Register notice seeking input to inform the development of trade and investment policies that promote supply chain resilience.
  • Per USTR’s press release, “the notice seeks information on developing sector-specific policy tools, strengthening domestic manufacturing and services, collaborating with like-minded trading partners and allies, and measuring resilience, among other topics.”
  • Written comments are due Apr. 22 and a public hearing is scheduled for May 2.
  • This effort supports the Biden Administration efforts to strengthen supply chains critical to America’s economic and national security.
  • In February 2021, an Executive Order on American supply chains directed USDA to submit an assessment of the supply chains that involve the production of agricultural commodities and food products. The following year, in February 2022, the USDA Agricultural Marketing Service published USDA Agri-Food Supply Chain Assessment: Program and Policy Options for Strengthening Resilience. Many U.S. companies and industry representatives provided input on this assessment.

TRADE REMEDIES

USMCA ANTIDUMPING TIN MILL

  • On Feb. 27, the U.S. International Trade Administration (ITA) submitted notice of the USMCA Request for Panel review related to the U.S. anti-dumping determination for tin mill products.  The request was filed on behalf of the Government of Canada and ArcelorMittal Dofasco G.P.
  • ITA determined affirmatively in January 2024 that tin mill products from Canada were being sold at less than fair value and determined a 5.27% dumping margin. However, on Feb. 6, 2024, the U.S. International Trade Commission (ITC) determined that a U.S. industry is not materially injured or threatened with material industry from tin mill products from Canada, China, and Germany so duties were not applied.
  • Oral arguments are scheduled for Sep. 25 and a panel decision is due Dec. 24, 2024.

FOOD AND AGRICULTURE ORGANIZATION (FAO) OF THE UNITED NATIONS

FOOD PRICE INDEX

  • On Mar. 8, the monthly FAO Food Price Index (FFPI) was released. 
  • The index was down 10.5% from its corresponding value a year ago.  
  • The FFPI measures monthly change in the international prices of a basket of food commodities—cereals, vegetable oil, dairy, meat, and sugar.
  • Over the past year, the index price indices for all commodity groups have decreased— excluding sugar.

This week, CRA celebrates the life of Jim Murphy and the important contributions he made to food and agriculture trade, including during his many years serving as Assistant USTR for Agricultural Affairs. We extend our condolences to his family and friends following his passing on March 5th.