TRADE UPDATE

Food & Agriculture
Sept. 10, 2024

By Kristy Goodfellow, Vice President of Trade and Industry Affairs and Ameya Khanapurkar, Trade Intern

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HIGHLIGHTS

  • US-Mexico: A bipartisan group of 10 members of Congress expressed concern about the implications of the Mexican government’s constitutional reform proposals on the U.S.-Mexico-Canada Agreement and the security of U.S. investments..
  • USTR: The Office of the U.S. Trade Representative seeks comments for the 2025 National Trade Estimate Report on Foreign Trade Barriers.
  • Chile: The Chilean Congress has approved an agreement with the United States to provide U.S. producers of meat and cheese products access to Chile’s markets using familiar names such as cheddar, gouda, provolone, prosciutto, and salami.
  • World Trade Organization: The WTO Trade Barometer’s latest reading has demonstrated a rise in trade volume despite regional discrepancies in trade growth.

“We recognize every government’s sovereign right to update its constitution and deeply value the strong partnership between the U.S. and Mexico. However, many of the proposed reforms … would undermine North American competitiveness and create a challenging environment for relevant businesses that seek to operate under USMCA rules in Mexico.”

——–Members of Congress in a letter to USTR Katherine Tai

US-Mexico

Bipartisan Concern Over Mexican Constitutional Amendment

  • Rep. Adrian Smith (R-NE) led a bipartisan letter to United States Trade Representative Katherine Tai expressing concern over a suite of Mexican constitutional reform proposals related to electricity, mining, genetically modified corn, and regulatory bodies.
  • The wide-ranging proposals are an initiative of outgoing Mexican President Andrés Manuel López Obrador. Changes to the country’s judicial system cleared Mexico’s House of Deputies last week and will now be considered by the country’s Senate. Other proposals are also in various stages of the review and approval process.  
  • The letter emphasizes Mexico’s sovereign right to modify its constitution but stresses that Mexico must stay within the bounds of the U.S.-Mexico-Canada Agreement.
  • The letter argues the proposed reform would “compromise access for U.S. investors to a stable, predictable, and unbiased regulatory framework.”
  • On Aug. 14, the Commission of Constitutional Issues of Mexico’s House of Deputies approved a bill banning GM corn and added an allowance for imported GM corn if it is not for human consumption and is broken or fragmented. Since then, no steps have been taken to advance the bill through the House of Deputies.

USTR

USTR Seeks Input on National Trade Estimate Report

  • USTR is seeking comments on the 2025 National Trade Estimate (NTE) Report on Foreign Trade Barriers to assist in identifying significant foreign obstacles to United States exports, foreign direct investment, or electronic commerce.
  • The NTE is an annual report that details tariff and non-tariff barriers by country or region. The 2024 report is available here.
  • USTR specifically requests information related to a group of more than 60 export markets including major trading partners like Canada, China, Mexico, and the European Union. Comments are sought that identify barriers in those markets and an estimate of the potential increase in U.S. exports that would result from the barrier’s removal.
  • A full list and description of trade barrier categories are available in USTR’s Federal Register notice.

Chile

Chilean Congress Approves US Meat and Cheese Agreement

  • The National Congress of Chile has approved an agreement on Chilean Market Access and Prior Users for Cheese and Meats, which allows U.S. producers to supply Chilean consumers with their products using certain specific terms, such as cheddar, gouda, provolone, prosciutto, and salami.
  • The text of the agreement was codified in an exchange of letters between Tai and Claudia Sanhueza, Chile’s Undersecretary for International Economic Relations, on June 28, 2024.
  • This agreement is considered an “integral part” of the United States-Chile Free Trade Agreement, according to the USTR press release, and will be eligible for FTA dispute settlement.
  • According to USDA’s Global Trade Atlas, the United States exports to Chile in 2023 included $39.2 million in beef and beef products, $48.3 million in pork and pork products, $40.8 million in poultry meat and products, $21.3 million in meat products not otherwise specified, and $90.6 million in dairy products.

World Trade Organization

Goods Barometer Signals Upturn in Global Trade Volume

  • The latest reading of the WTO trade barometer – a composite indicator for world trade that informs on the trajectory of merchandise trade relative to recent trends – was 103, suggesting merchandise trade volume growth should remain positive in the second and third quarters of 2024.
  • This comes after a flatlining in the final quarter of 2022 followed by momentum slowly building in the fourth quarter of 2023 into the first quarter of 2024.
  • Recent data demonstrate weaker-than-expected European trade growth, and stronger-than-expected growth in other regions.
  • Despite this positive signal, the outlook for trade is uncertain due to “rising geopolitical tensions, ongoing regional conflicts, shifting monetary policy in advanced economies, and weakening export orders,” the WTO noted in a release.