TRADE UPDATE

Food & Agriculture
July 30, 2024

By Spencer Chase (Senior Director of Communications) and Isabella Montero (Communications Intern) with help from DTB AgriTrade

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HIGHLIGHTS

  • USTR: The Office of the U.S. Trade Representative hosted the annual AGOA forum in Washington, DC last week, featuring ministers from African countries, leadership of the African Union, and U.S. government officials.
  • WTO: Brazil’s proposed roadmap for agriculture negotiations failed to achieve consensus at the latest General Council meeting July 22 in Geneva.
  • FAO: The 2024 FAO State of Food Security and Nutrition in the World (SOFI) report, released on July 24, emphasizes the need for better financing to achieve Sustainable Development Goal (SDG) 2, targeting hunger and malnutrition.
  • HOUSE AG COMMITTEE: The House Agriculture Committee held a hearing on “Financial Conditions in Farm Country.” Trade came up several times, first by Chairman GT Thompson (R-PA) highlighting the permanent investment in trade promotion funds in the House Farm Bill.
  • ARGENTINA: On July 28, Argentinian president Javier Milei addressed a crowd of dissatisfied and impatient farmers, vowing to rescue the nation’s ag industry and scrap export taxes.

“A future free from hunger is possible if we can rally the resources and the political will needed to invest in proven long-term solutions … We have the technologies and know-how to end food insecurity – but we urgently need the funds to invest in them at scale.”

——World Food Programme Executive Director Cindy McCain in a release announcing the 2024 State of Food Security and Nutrition in the World report

USTR

African Ministers in Washington to Push for AGOA Renewal

  • The Office of the U.S. Trade Representative hosted the annual AGOA forum in Washington, DC last week, featuring ministers from African countries, leadership of the African Union, and U.S. government officials. Ministers met with U.S. executive branch officials and members of Congress.
  • AGOA was first enacted in 2000. Its latest extension in 2015 lasted for 10 years. Bipartisan legislation introduced in the Senate by Sens. Chris Coons (D-DE) and Jim Risch (R-ID) would extend AGOA for 16 years and create additional authorities around eligibility and enforcement.
  • Parks Tau, South Africa’s Minister of Trade, Industry and Competition, highlighted the connection between the certainty provided by AGOA and the African Continental Free Trade Area (AfCFTA), noting the view that the two are “complementary and functioning in a way that AGOA could supplement the initiatives of the free trade area.”
  • On Capitol Hill, the New Democrat Coalition called for AGOA reauthorization, saying “Africa has changed dramatically since the inception of AGOA, and our trade program must reflect that transformation to increase economic growth and drive more investment to both Africa and the U.S.”
  • USTR Katherine Tai pointed to ways to improve the effectiveness of AGOA, such as by improving utilization in smaller countries, addressing supply chain fragility, and empowering women, youth, small companies, and the African diaspora. She has also suggested trade preferences like AGOA need to include environmental criteria. 
  • While there is widespread support for renewing AGOA, some U.S. agriculture groups have submitted concerns to USTR regarding treatment of their exports by specific African governments.
From @USTradeRep on X/Twitter

WORLD TRADE ORGANIZATION

WTO Fails to Deliver Midyear Deals on Ag Negotiations, Fish Subsidies

  • Brazil’s proposed roadmap for agriculture negotiations failed to achieve consensus at the latest General Council meeting July 22 in Geneva.
  • The Brazilian proposal, which would set an agenda for the 14th Ministerial Conference (MC14), was based on the draft text blocked by India at MC13. The lack of advancement continues the deadlock over multilateral agriculture negotiations.
  • The United States, which noted its willingness to make compromises to get to this point, expressed regret that “we find ourselves in the same place we have been for 20 years,” and stated that “we really need to consider new approaches” to deliver on agriculture at MC14.
    • The WTO published a report from a workshop on agriculture negotiations held earlier in July that sought to highlight “new thinking” on today’s challenges.
  • Similarly, the fisheries subsidies addendum agreement was moved to the discussion category, delaying its approval. These negotiations, which aim to address the widely acknowledged problem of subsidy-driven overfishing, were derailed by late interventions by India. The United States blasted India for re-introducing topics that have been debated and discussed repeatedly and “found no support among the vast majority of Members.”
  • At the same meeting, several delegations tried to kick off the process early to reappoint Ngozi Okonjo-Iweala as Director General of the WTO, even though she has not declared her candidacy.

FOOD AND AGRICULTURE ORGANIZATION

Report Presents New Approach to Addressing Food Insecurity, Malnutrition

  • The 2024 FAO State of Food Security and Nutrition in the World (SOFI) report, released on July 24, emphasizes the need for better financing to achieve Sustainable Development Goal (SDG) 2, targeting hunger and malnutrition.
  • Highlighted at a UN event, the report identifies inconsistent definitions of financing as a major challenge, suggesting a unified approach to improve accountability and effectiveness.
  • Updated projections show 582 million people will be chronically undernourished in 2030, pointing to the immense challenge of eliminating hunger, an ambition of SDG 2. This is about 130 million more undernourished people than in a scenario that reflected the world economy before the COVID-19 pandemic. By 2030, 53% of the global population facing hunger will be concentrated in Africa.
  • FAO Director-General Qu Dongyu called for more targeted and risk-tolerant financing, stressing the importance of bridging the funding gap to avoid severe future costs. The report underscores the need for innovative, inclusive, and equitable solutions, recommending improved coordination, risk management, and blended financing to enhance development finance productivity.
  • SOFI 2024 introduces a new definition for financial resources, aiming to address the multifaceted nature of food insecurity and integrate food security objectives into broader financial frameworks.
Chart: FAO

HOUSE AGRICULTURE COMMITTEE

Hearing on Farm Country

  • Trade was frequently discussed in a July 23 hearing of the House Agriculture Committee focused on “Financial Conditions in Farm Country.”
  • Committee Chair Glenn “GT” Thompson (R-PA) highlighted the permanent investment in trade promotion funds in the House Farm Bill.
  • Panel Ranking Member David Scott (D-GA) pointed to the likely negative impact on the farm economy of new tariffs proposed by the Trump-Vance-RNC platform.
  • The trade war theme was taken up several times, along with the agricultural trade deficit and the need for new trade agreements.

ARGENTINA

President Javier Milei Vows to Scrap Export Taxes

  • On July 28, Argentinian President Javier Milei addressed a crowd of dissatisfied and impatient farmers, vowing to rescue the nation’s ag industry and scrap export taxes.
  • Upon being elected, Milei expressed free-market promises, which many in the country’s ag sector feel have not yet been realized. According to a report from the Associated Press, Argentina’s ag economy still faces debilitating “currency controls, crushing export taxes and an uncompetitive exchange rate” seven months into Milei’s presidency.
  • Although the ag industry accounts for 20% of Argentina’s gross domestic product, the AP notes beef consumption has dropped to its lowest in history, in part due to the country’s 270% annual inflation.
  • In the article, Milei claimed, “No one is as eager as we, and me in particular, are to get out of this disastrous model where the state, through withholdings and restrictions, expropriates 70% of what the countryside produces.”