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Hearing outlines concerns with stagnant U.S. ag trade policy

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FREE TRADE NEEDED: Ag groups urge Biden administration to renew Presidential Trade Promotion Authority offering fast track approval for securing passage of negotiated trade deals.
Ag industry stakeholders testify in House Ag subcommittee on need for taking a proactive trade position.

The last time the United States implemented a new free trade agreement was in 2012. “That’s nearly 10 years of inactivity,” shared South Dakota soy and corn farmer Kevin Scott during a House Agriculture subcommittee hearing on trade priorities.

Scott and others who testified called for the Biden administration to take a more proactive stance on building and expanding market opportunities for U.S. agricultural producers, including a unanimous call for rejoining the Comprehensive and Progressive Agreement for Trans-Pacific. The agreement came after the Trump administration withdrew from the Trans-Pacific Partnership negotiated under the Obama administration.

During the hearing, both House Agriculture Subcommittee on Livestock and Foreign Agriculture Chair Jim Costa, D-Calif., and Ranking Member Dusty Johnson, R-S.D., reiterated the bipartisan support for rejoining the CPTPP. Costa noted that he hopes action can be taken on a bipartisan basis to urge for the conditions that would allow for the U.S. to rejoin the CPTPP.

Johnson also noted, “We need a robust approach to free trade agreements” as it would be helpful in removing tariff barriers and non-tariff barriers that are not-science based.

Related: Farmers seek re-engagement in CPTPP

According to the written testimony of Jen Sorenson, president of the National Pork Producers Council, as a result of trade agreements, U.S. pork exports have increased more than 1,850% in value and nearly 1,750% in volume since 1989, the year the United States implemented its FTA with Canada and started opening international markets for value-added agriculture products. Since 2000, pork exports to FTA countries have increased 649%, and in countries where the United States has negotiated preferential market access and where tariffs were slashed, pork exports increased tremendously.

“Policies that foster the free flow of goods and expand export markets – mostly through free trade agreements – are critical to the continued success of America’s pork producers, U.S. agriculture and the overall American economy,” said Sorenson in her verbal testimony. “The bottom line: The United States needs more FTAs, which eliminate or significantly reduce tariff on and non-tariff barriers to U.S. exports.”

In April 2021, after years of NPPC working with the U.S. and Philippine governments, the Philippines announced it would increase its Minimum Access Volume and slash tariffs on pork to curb food price inflation caused by ASF outbreaks in the country. U.S. pork exports to the Philippines have increased by 100% to over $122 million since then, Sorenson shared.

“Although these are great results for U.S. pork producers, who have already seen the benefits, the tariff reductions are not permanent and are set to expire within 12 months,” Sorenson explained.

Vietnam also reduced its tariffs this week from 15% to 10%, but CPTPP countries will have only a 7.5% rate.

Simon Vander Woude, owner of Vander Woude Dairy and on behalf of National Milk Producers Federation, testified that dairy exports have grown from $618 million worth of dairy products in 1993, the year before the North American Free Trade Agreement went into effect, to in 2020, $3.5 billion in sales to just FTA partners.

Vander Woude said new trade agreements provide a way to counter the market advantage now seen by dairy competitors including Europe, New Zealand and Australia. “Farmers need to see action. Time is of the essence,” he said. Key trade deals previously left on the table from the last administration including one with the United Kingdom as well as future action with China need to be evaluated, he said.

Sorenson said the Phase 1 deal struck with China helped boost U.S. pork exports. China took in nearly $2.3 billion of American pork last year, making it the top destination for U.S. pork. However, even with the high sales, U.S. pork remains at a disadvantage as U.S. pork tariffs result in a cumulative 33% surcharge compared with 8% for the rest of the world.

Scott said the Phase 1 deal was critical for U.S. soybean producers as one over every three U.S. rows of soybeans ends up in China. U.S. soybean exports came to a halt after the 2018 trade war and at the height of the disruption exports to China accounted for only 12% of the U.S. soybean crop.

Biotech commitments

Scott also encouraged the U.S. Trade Representative to hold countries accountable to their biotech commitments, both to China as well as Mexico. He said Mexico has not approved a new biotech event for import since 2018 and recently denied a pending corn application without a scientific reason.

While the U.S. has led the world in the commercialization of biotechnology to enable more sustainable farming and industrial practices, China, Mexico and the EU “delay biotechnology risk assessments and approvals or intentionally malign technology,” said the Biotechnology Innovation Organization in comments to the subcommittee ahead of the hearing.   

China “has effectively limited U.S. farmer access to new biotechnology traits, and by extension worked counter to the interests of American farmers and American businesses.” There’s “no evidence” China’s followed through on commitments to the Phase 1 trade agreement, “as the system continues to be opaque and protracted, averaging over eight years to secure an import approval for a biotech trait,” BIO added.

BIO said it has seen progress in the EU—but risks remain. “Both the Farm to Fork strategy and the European Commission’s recent study on New Genomic Techniques point to the importance of innovation to achieving a more sustainable food system. However, significant risks remain as Europe’s regulatory processes are fundamentally prejudiced to agricultural biotechnology,” BIO said.

Mexico remains a major problem as it hasn’t approved a new biotech product in three years and 25 products are backlogged in the queue. The government continues to make troubling statements regarding imports of corn produced with biotechnology, “explicitly stating that imports will be prohibited by 2024 and future approvals will be denied and existing approvals will be revoked,” BIO added.

“A proactive trade agenda is needed to harness the latest science, enable U.S. producers to be competitive in a global market, sustainably increase production, and combat climate change. U.S. trade policy must be aimed at addressing existing barriers to biotechnology and facilitating regulatory approvals for critical technologies,” BIO’s comments stated.

 

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