TRADE UPDATE

Food & Agriculture
August 20, 2024

By Kristy Goodfellow (Vice President of Trade and Industry Affairs), Isabella Montero (Communications Intern), Molly Shields (Government Relations Intern)

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HIGHLIGHTS

  • Mexico: The Commission on Constitutional Issues of Mexico’s House of Deputies approved on Aug. 14 a bill that seeks to constitutionally ban GMO corn, a constitutional reform initiative by President Andrés Manuel López Obrador.
  • Colombia: Colombia initiated a dumping and subsidies investigation into imported powdered milk products from the United States. American industry officials have responded, requesting U.S. government action and calling the investigation “baseless.”
  • Trade Promotion: USDA Under Secretary for Trade and Foreign Agricultural Affairs Alexis Taylor traveled to Bogota, Colombia last week to launch a trade mission.
  • Trade Remedies:
    • The Alliance for Chemical Distribution (ACD) wrote a series of letters to U.S. government officials requesting action on alleged fraudulent trade activity to circumvent existing duties and Section 301 tariffs on citric acid and other chemical products from Mexico, India, and Turkey.
    • On Aug. 15, the U.S International Trade Commission (ITC) determined pea protein imports from China are injuring the U.S. industry, a requirement to apply anti-dumping and countervailing duties (AD CVDs). Rates of 122.19% for a certain list of Chinese companies and 280.31% for all others will be applied.
  • Country of Origin Labeling: Reps. Josh Harder (D-CA) and Derrick Van Orden (R-WI) introduced a bill — the Americans CANS Act — requiring country-of-origin labeling on canned fruits and vegetables.

“Colombia stands out as a key growth market for U.S. agricultural exports. As Latin America’s third-most-populous country, Colombia is experiencing rapid growth in its middle class and consumer purchasing power. Colombian consumers are eager for the high-quality food and agricultural products that the U.S. delivers.”

——- U.S. Department of Agriculture Under Secretary for Trade and Foreign Agricultural Affairs Alexis M. Taylor during a trip to Colombia to launch trade mission

Mexico

Constitutional Reform

  • The Commission on Constitutional Issues of Mexico’s House of Deputies recently approved a bill that seeks to constitutionally ban GMO corn, advancing a constitutional reform initiative by President Andrés Manuel López Obrador.
  • The bill, which passed Aug. 14, states, “Corn, an element of national identity, as a staple food intended for human consumption, and its cultivation must be free of transgenics and any other genetic modifications, prioritizing its agroecological management.”
  • From the original proposal, this bill added allowance for imports of genetically modified corn, if it is not for human consumption and is broken/fragmented so that it cannot germinate.
  • For this reform provision to become law, it must be approved by Mexico’s House of Deputies, then by the Senate Committees, then by the Senate. Then, if approved by congresses in at least 17 states, the bill would go to the country’s executive branch for approval or veto. 
  • A final report by the USMCA dispute settlement panel challenging certain biotechnology measures in Mexico is expected in November.

Colombia

Powdered Milk Exports

  • American dairy industry officials are reacting to news from Columbia, where the country’s Ministry of Commerce, Industry, and Tourism initiated a subsidies and countervailing duties (CVD) investigation into imported powdered milk products from the United States last month.
  • On August 9, the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) wrote to U.S. Trade Representative Katherine Tai and Agriculture Secretary Tom Vilsack, voicing a shared concern about what the groups consider to be a “baseless” investigation. In the letter, NMPF and USDEC request U.S. government representatives “challenge this unfounded investigation directly and be prepared to leverage all available tools to counter any injury imposed on the U.S. diary industry should Colombia move forward with imposing countervailing duties.”
  • In a separate letter to the Colombian Ambassador, several House members echoed the groups’ concerns.
  • The two organizations argued U.S. powdered milk subsidies are not disrupting the Colombian fluid milk industry. NMPF and USDEC note, “Currently, U.S. producers export about $70 million worth of milk powder to Colombia each year. Should Colombia impose tariffs on U.S. milk powder exports, that number would significantly decline, impacting dairy farmers and workers up and down the supply chain.”
  • Members of Congress wrote to Colombian Ambassador Luis Gilberto Murillo with similar concerns, arguing “The allegations made in the Ministry’s investigation lack sound legal basis, and we are aware of no evidence of a causal link between U.S. powdered milk exports to Colombia and any injury to the domestic industry.” Four Representatives signed the letter, including House Agriculture Committee members Jim Costa (D-CA) and Dusty Johnson (R-SD) and Ways and Means Committee members Adrian Smith (R-NE); Jimmy Panetta (D-CA); Smith chairs the panel’s Trade Subcommittee.

Trade Promotion

USDA Trade Mission to Colombia

Source: https://x.com/USDAForeignAg/status/1823904172074263025
  • USDA Under Secretary for Trade and Foreign Agricultural Affairs Alexis M. Taylor traveled to Bogota, Colombia, last week to launch a trade mission.
  • She was joined by state officials from Wisconsin, Texas, and Mississippi and representatives from 36 U.S. agribusinesses and organizations.
  • USDA’s Foreign Agricultural Service notes Taylor is “building on the trade gains made since the U.S.-Colombia Trade Promotion Agreement was implemented in 2012.”
  • Taylor stated, “Colombia stands out as a key growth market for U.S. agricultural exports. As Latin America’s third-most-populous country, Colombia is experiencing rapid growth in its middle class and consumer purchasing power.”
  • In 2023, Colombia ranked seventh in U.S. agricultural export markets, as the United States exported $3.69 billion in agricultural products to Colombia. Top U.S. agricultural exports to Colombia in 2023 were corn ($1.14 billion) and soybean meal ($737.71 million).

Trade Remedies

Alleged Tariff Circumvention on Imports of Citric Acid from Mexico, India, and Turkey

  • On August 9, the Alliance for Chemical Distribution (ACD) President and CEO Eric Byer wrote a series of letters to Tai, Commerce Secretary Gina Raimondo, acting Customs and Border Protection Commissioner Troy Miller, and FDA Commissioner Robert Califf requesting action on alleged fraudulent trade activity with citric acid and other chemical products from Mexico, India, and Turkey.
  • Byer raised concerns that these imports are circumventing antidumping and countervailing duties as well as Section 301 tariffs, and violating prohibitions on imports related to forced labor in China, non-compliance with U.S. food safety and good manufacturing practices, and U.S. patent and trade laws.
  • Byer points to the below-market prices of citric acid originating from Mexico, India, and Turkey. According to ACD, Mexico and India have no citric acid fermentation facilities, and Turkey has extremely limited domestic manufacturing. In his letter, Byer argues companies are repackaging and relabeling citric acid from China and other nations, modifying similar chemicals from China into citric acid, or circumventing tariffs with intentional misclassification.
  • Citric acid is produced from starches, including corn starch, and widely used in food and beverage products, personal care, pharmaceuticals, and other various industry applications.

Final Determination on US Pea Protein Investigation

  • On Aug. 15, the U.S. International Trade Commission (ITC) completed and filed its final determination on the subsidies and dumping investigation on imports of pea protein from China.
  • Similarly to preliminary investigations, U.S. ITC found the U.S. industry has been injured by imports from China — a requirement to apply anti-dumping and countervailing duties (AD CVDs).
  • On June 28, 2024, the U.S. Department of Commerce International Trade Administration (ITA) made a final affirmation determination on the AD CVD investigation.
  • ITA determines specific rates that will be applied to U.S. imports of pea protein from China, which will be 122.19% for a certain list of companies and 280.31% for all others.

Country of Origin Labeling

Bill Introduced for Canned Fruit and Vegetable Labeling

  • Reps. Josh Harder (D-CA) and Rep. Derrick Van Orden (R-WI) introduced a bill — the Americans CANS Act — requiring country-of-origin labeling on canned fruits and vegetables.
  • According to Harder, imports of canned fruits and vegetables from China shot up 43% from 2019 to 2022.
  • The Pacific Coast Producers commented, “[w]e strongly believe that consumers would prefer USA sourced products, which are grown and packaged with many protections – environmental safeguards for our land, water and air, food safety laws, worker health and safety laws and strong and fair labor laws. We thank Representative Harder for taking the time to visit our growers, learn about our food products, and for recognizing that unfairly subsidized foreign products are not preferable to our USA grown food.”
  • Existing law requires COOL disclosure on packaging of fresh and frozen fruits and vegetables, but carves out exceptions for dry, cooked, or canned product.
  • U.S. COOL requirements for beef and pork were previously challenged in the WTO and revoked after the WTO panels found these measures to be inconsistent with international trade rules. U.S. COOL policies continue to be sensitive domestically and with foreign trading partners.