TRADE UPDATE

Food & Agriculture
April 2, 2024

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

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HIGHLIGHTS

  • U.S.-Mexico: The Mexican government postpones a glyphosate ban due to go into effect on Apr. 1, 2024 due to the lack of chemical substitutes and the need to ensure agri-food safety.
  • Trade Remedies: On Mar. 22, the U.S. Department of Commerce (DOC) announced a final rule modifying the current administration of antidumping (AD) and countervailing duty (CVD) laws. Notably, the rule increases DOC’s ability to counter transnational subsidies, address market distortions, and consider weak labor, environmental, human rights, or intellectual property protection.
  • U.S.-Africa: On Mar. 27, USAID announced the launch of the Africa Trade Desk, which is expected to facilitate at least $300 million in export sales between Africa and the United States over the next 18 months by consolidating logistics, insurance, and track-and-trace technology from farm to retailer.
  • WTO: During the Mar. 13-15, the WTO TBT Committee adopted guidelines to assist regulators in choice and design of conformity assessment procedures in order to avoid unnecessary obstacles to international trade. Please see below for a list of food and agriculture issues raised by the United States.
  • USTR: USTR released its 2024 National Trade Estimate (NTE) report, which according to the press release, “provides a comprehensive review of significant foreign barriers to U.S. exports.”
  • Trade Promotion: The USDA Under Secretary for Trade and Foreign Agricultural Affairs, Alexis Taylor, lead an agribusiness trade mission to Seoul, South Korea from Mar. 25-28, 2024.
  • U.S. Competitiveness: On Mar. 27, USDA Economic Research Service (ERS) highlighted global tree nut trade, which was taken from broader March 2023 report on U.S. competitiveness of corn, soybean products, cotton, wheat products, and tree nuts.

“South Korean consumers appreciate the quality and reliability of U.S. food and agricultural products. I’m excited to introduce the U.S. companies and their diverse lineup of products to this important market. This week provides a great opportunity to develop the partnerships and foster the collaboration that are critical to facilitating the long-term relationships that will form the basis for expanding U.S.-South Korea trade. I’m confident the engagements planned here in Seoul will deliver mutually beneficial results.”

—USDA TFAA Under Secretary Alexsis Taylor on trade mission to South Korea

U.S.-Mexico

GLYPHOSATE BAN POSTPONEMENT

  • On Mar. 26, the Mexican federal government postponed implementation of a ban on glyphosate due to the absence of substitutes and the need to safeguard agri-food safety.
  • The ban, which was initially announced in a decree published in the Official Gazette of the Federation on Feb. 13, 2023, would have banned authorization and permits for glyphosate use, import, production, and distribution on Apr. 1, 2024.
  • The Feb. 13, 2023 Decree references a Dec. 31, 2020 Decree, which calls on the Federal Government to “gradually replace the use, acquisition, distribution, promotion, and import of the chemical substance called glyphosate (sic) for sustainable and culturally appropriate alternatives.”   
  • In a press statement from Mar. 26, the Government of Mexico explains that because specific conditions to replace the use of glyphosate have not been established, several government agencies, including the Federal Commission for the Protection Against Sanitary Risks (Cofepris) have expressed their concerns regarding agri-food safety.
  • The Government of Mexico acknowledges incomplete efforts to develop glyphosate substitutes and continues searching for low-toxic alternatives. In its press statement, the Government explains, “The Government of Mexico maintains the purpose of the Decree to protect the right to health, to nutritious food, to a healthy environment for the development and well-being of people, as well as to guarantee the food sovereignty of the people of Mexico.”

Trade Remedies

UNITED STATES UPDATES TRADE ENFORCEMENT REGULATIONS

  • On Mar. 22, the U.S. Department of Commerce (DOC) announced a final antidumping (AD) and countervailing duty (CVD) rule: Regulations Improving and Strengthening the Enforcement of Trade Remedies Through the Administration of the Antidumping and Countervailing Duty Laws.
  • According to a DOC press release, the updates will “level the playing field for U.S. industries and workers by remedying unfair trade actions from foreign businesses and governments.”
  • The modifications include:
    • “strengthening the Department’s ability to counter transnational subsidies” (e.g., consider elements that may have been subsidized by third parties);
    • “addressing market distortions”, and
    • considering weak labor, environmental, human rights, or intellectual property protection.
  • Nineteen food and agriculture trade associations provided comments on the draft regulation on Jul 10, 2023.
    • As summarized in those comments, they “oppose Commerce’s proposed amendments as they relate to (1) foreign government “inaction” regarding property rights (including intellectual property), human rights, labor, and environmental protection issues; (2) excess capacity and oversupply of certain major inputs in the international market; and (3) transnational subsidization because they would reduce the efficiency of U.S. food production and, ultimately, increase consumer food prices.”
  • The International Economic Law and Policy Blog shares DOCs response to comments about World Trade Organization (WTO) compliance, and adds “[t]hese issues could show up in a future WTO complaint, and that will certainly be something to look out for.  But in the short term I am more interested in how this will play out in U.S. agency decisions and domestic court appeals.” 

U.S.-Africa

USAID LAUNCHES THE AFRICA TRADE DESK THROUGH PROPSER AFRICA

  • On Mar. 27, USAID announced the launch of the Africa Trade Desk, which USAID calls a “signature trade platform from Prosper Africa that links large U.S. food retailers to African producers.”
  • According to USAID’s announcement, the Africa Trade Desk is a public-private partnership between Prosper Africa and Afritex Ventures. It is set to facilitate at least $300 million in export sales between Africa and the United States over the next 18 months by consolidating logistics, insurance, and track and trace technology from farm to retailer.
  • The Desk will focus on specialty food products such as seafood, peppadews, stone fruit, citrus, and high-value herbs and vegetables.
  • Prosper Africa is a U.S. Presidential-level national security initiative created to increase trade and investment.

WTO

COMMITTEE ON TECHNICAL BARRIERS TO TRADE (TBT)

  • The WTO TBT Committee met from Mar. 13-15. Notably, Members adopted conformity assessment procedure guidelines to assist regulators and avoid unnecessary obstacles to international trade.
  • During the meeting, 70 trade concerns were raised, including 15 new ones.  Notable for agriculture, the United States raised issues relating to:
    • Mexico’s draft NOM for yogurt specifications, proposed milk powder import procedure, and conformity assessment procedures for cheese;
    • EU geographical indications for wine;
    • EU transitional periods for maximum residue limits (MRLs) and amendments to MRLs for clothianidin and thiamethoxam;
    • Egypt and Indonesia Halal certification measures;
    • Ireland alcohol labeling;
    • EU deforestation regulation; and
    • India’s draft food safety standards for alcoholic beverages, GM-free certificates, and draft food safety and standards amendment;
  • Delegations recognized the Ministerial Declaration adopted during the MC13 in Abu Dhabi in February 2024 and the role of the TBT Committee on encouraging collaboration among regulators to minimize barriers to trade.
  • The 2023 annual review was provided during the meeting, highlighted a record number (4,068) of TBT measure notifications in 2023, with strong participation from developing and least-developed members.

Trade Promotion

USDA KOREA TRADE MISSION

  • The USDA Under Secretary for Trade and Foreign Agricultural Affairs, Alexis Taylor, lead an agribusiness trade mission to Seoul, South Korea from Mar. 25-28, 2024.
  • The trade mission included meetings between U.S. delegates and Korean companies interested in importing U.S. agricultural products, aiming to strengthen ties with Korean partners and introduce U.S. products to Korean consumers.
  • There are 49 representatives from the agribusiness and farm organizations participating, along with delegates from five state departments of agriculture.
  • In 2022, the United States-Korea Free Trade Agreement marked its 10th anniversary, reinforcing their strong trade alliance.
  • Korea is the fifth largest market for the U.S. agricultural goods.
  • U.S. Department of Agriculture Under Secretary for Trade and Foreign Agricultural Affairs, Alexis Taylor, stated: “Exports of U.S. agricultural and related products to South Korea totaled more than $8 billion in 2023, and it is a critical market as we continue to focus on diverse market opportunities for U.S. food and agricultural exports.”
agribusiness trade mission to Seoul, South Korea
From @USDAForeignAg on Twitter/X

USTR

2024 NATIONAL TRADE ESTIMATE

  • USTR released it’s 2024 National Trade Estimate (NTE) report, which according to the press release, “provides a comprehensive review of significant foreign barriers to U.S. exports.”
  • Many food and agriculture barriers are embedded in issues listed by country.  Some notable issues included include:
    • Indonesia’s facility registration requirements for dairy, meat and rendered products;
    • China’s requirements across many food and agriculture products;
    • India and Turkey’s procedures and requirements for agricultural biotechnology approvals;
    • Mexico’s policy regarding biotechnology; and
    • The EU’s non-science-based policies affecting innovative crop protection technologies.
  • In USTR’s press release, it explains that it is attempting to revert back to the report’s “statutory purpose” and avoid commenting on measures where trading partners have “sovereign policy authority”.

U.S. Competitiveness

USDA SHARES STUDY ON GLOBAL COMPETITIVENSS FOR CORN, SOYBEANS, COTTON, WHEAT, AND TREE NUTS

  • On Mar. 27, USDA Economic Research Service (ERS) highlighted global tree nut trade, taken from broader March 2023 report on U.S. competitiveness of corn, soybean products, cotton, wheat products, and tree nuts.
  • The report found that:
    • “[T]he United States continues to be the top exporter of corn, tree nuts, and cotton, while other competitors have penetrated the global wheat and soybean markets.”
    • “Over the last decade, the United States lost its position in the global wheat markets as the European Union (EU), Russia, and Ukraine gained market shares.”
  • The report considers the lack of U.S. free trade agreements between 2012 through 2020 and says this factor is “potentially limiting U.S. export opportunities in some emerging markets while other competitors signed multiple FTAs during that same period”.
  • The report includes sections on “Changes in Trade Environment”, which considers the impact that trade policy may be affecting competitiveness on the five products considering in this study, although ERS is careful in the study to note that increases in trade may not be entirely attributable to trade agreements, and may also be affected by trade with other partners, shifting consumer preferences, etc.
  • Within the “Changes in Trade Environment” section, ERS includes a graph showing U.S. exports of these five products in the context of retaliatory tariffs and the U.S.-China Phase One agreement.