TRADE UPDATE: Food & Agriculture | July 2nd, 2024
Corn Refiners Association
Representing the corn wet milling industry and safe and affordable corn products since 1913.
By Kristy Goodfellow, Vice President of Trade and Industry Affairs, Isabella Montero, Communications Intern, Molly Shields, Government Relations Intern
HIGHLIGHTS
U.S.-Mexico: On June 26 and 27, a U.S.-Mexico-Canada Agreement (USMCA) dispute panel convened a hearing on certain aspects of Mexico’s corn decree being challenged by the United States.?
African Growth and Opportunities Act (AGOA): The Office of the U.S. Trade Representative’s recent report on AGOA implementation shows the countries in the pact are approaching $10 billion in exports of goods to the United States, including more than $900 million in agricultural products.
Chile: The U.S. and Chile have expressed a mutual interest in advancing Chilean market access for certain American meat and cheese products.
China: Six senators are pressing the Biden Administration for details about the increased imports of used cooking oil (UCO) from China.
Environment: Denmark is poised to be the first European country to introduce a carbon tax on livestock farming.
World Trade Organization: The WTO’s Sanitary and Phytosanitary (SPS) Committee met from June 26-28 and adopted a report on global food security and sustainable food systems. On June 20, the WTO Standards and Trade Development Facility (STDF) released its annual report.
USTR:
“AGOA has helped to grow Africa’s extraordinary economic potential and has made a difference for many Africans, but we have an opportunity to make it even better.” - USTR Katherine Tai on the release of the AGOA 2024 Biennial Report
US-MEXICO
USMCA Corn Dispute?
On June 26 and 27, a U.S.-Mexico-Canada Agreement (USMCA) dispute panel convened a hearing on certain aspects of Mexico’s corn decree being challenged by the United States.?
Specifically, the United States is challenging language to ban imports of genetically modified (GM) corn for flour production, and the “substitution instruction” which instructs the Government of Mexico to gradually replace GM corn used for animal feed and industrial uses for human consumption.
U.S. officials argue Mexico did not provide the required scientific evidence that supports these policies. The United States also addressed a host of issues raised by Mexico, including glyphosate utilization and safety, biodiversity, cultural heritage, and protection of Mexico’s indigenous and peasant communities.
The three dispute panelists will have an opportunity to exchange follow-up information with government representatives and exchange questions and answers following the hearings.?
A final report is expected in November.
AGOA
USTR Releases 2024 Biennial Report on AGOA
On June 28, the Office of the U.S. Trade Representative released its 2024 Biennial Report on the implementation of the African Growth and Opportunity Act (AGOA).
The report provides a “description of the status of trade and investment between the United States and sub-Saharan Africa, changes in country eligibility for AGOA benefits, an analysis of country compliance with the AGOA eligibility criteria, an overview of regional integration efforts in sub-Saharan Africa, and a summary of U.S. trade capacity building efforts.”
In a press release, USTR says AGOA, which was enacted in May 2020, “has played a critical role in the United States’ trade relationship with sub-Saharan Africa, including by fostering economic growth and development on the continent and encouraging African-led solutions to economic and political reforms.”
Ambassador Katherine Tai issued a statement noting “AGOA has helped to grow Africa’s extraordinary economic potential and has made a difference for many Africans, but we have an opportunity to make it even better.”
In 2023, African countries included in the AGOA program exported almost $10 billion in goods to the United States, including $4.2 billion in crude oil and $900 million in agricultural products.
CHILE
U.S.-Chile Cheese and Meat Agreement
The U.S. and Chile have expressed a mutual interest in advancing Chilean market access for certain American meat and cheese products.
The changes were formalized in an exchange of letters between Tai and Claudia Sanheuza, Chile’s Undersecretary of International Economic Relations.
Tai expressed her gratitude to “the Republic of Chile for their work on this exchange of letters.”
USTR said the news is “an integral part of the U.S.-Chile Free Trade Agreement” that will allow U.S. producers to grow their cheese and meat supply to Chilean consumers, once the agreement is enacted.
USDA Global Trade Atlas reports in 2023, the United States exports to Chile 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.
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CHINA
Used Cooking Oil
On June 20, a bipartisan group of six senators sent a letter to the Biden Administration, inquiring about the increased imports of used cooking oil (UCO) from China.
Incentive programs in the United States, including the Renewable Fuel Standard (RFS), have encouraged utilization of these oils for fuel and altered the markets for these fuels and their feedstocks.?
The senators noted recent UCO imports may contain virgin vegetable oil, including palm oil, raising environmental concerns from the renewable fuels industry over deforestation. ?
“Since 2020, in response to demand for renewable fuels, the U.S. has gone from importing less than 200 million pounds of UCO per year to importing over 3 billion pounds in 2023, with more than 50 percent of these imports coming from China,” the senators wrote.
One of the six senators, Joni Ernst (R-IA), claimed, “Dramatic increase in imports drives down demand for homegrown American crops.”
In addition to Ernst, other signatories included fellow Iowa Republican Chuck Grassley, GOP senators Deb Fischer and Pete Rickets of Nebraska, and Kansas Republican Roger Marshall. Sen. Sherrod Brown (D-OH) was the lone Democrat to sign the letter.
A recent USDA report on renewable diesel production and its impact on global feedstock trade, notes U.S. imports of all animal fats and vegetable oils in 2023 reached almost $16 billion, more than doubling between 2020 and 2023. The report highlights one “of the major drivers was UCO imports, which more than tripled in 2023 on higher imports from China.”
ENVIRONMENT
Denmark Set to Pass First Agriculture Carbon Tax
On June 24, the Government of Denmark came to a historic agreement, which, if passed through its parliament, would make Denmark the first European country to introduce a carbon tax on livestock farming.
According to the announcement, “[t]he agreement will create major changes in the industry and in the Danish landscape in the coming years and decades … The vision is for Denmark to be an international role model for a holistic and multifunctional approach to land management, where consideration for nature, biodiversity and drinking water go hand in hand with efficient and modern food production.”
The European Union does not charge any equivalent carbon tariffs on food or agricultural products but are moving forward with a Carbon Border Adjustment Mechanism on certain carbon intensive goods — cement, iron and steel, aluminum, fertilizers, electricity and hydrogen. ?
New Zealand has been exploring similar taxation policies but has recently refocused on expanding tools and technologies to reduce emissions that will have less of an impact on production and trade.?
Denmark's agriculture industry is one of its most significant emitters. According to the country’s Ministry of Economy, the deal would reduce Danish emissions by about 1.8 million tonnes of carbon dioxide equivalent by 2030, which “thus closes the shortfall in relation to the 2030 climate target.
WORLD TRADE ORGANIZATION
Sanitary and Phytosanitary Committee
The WTO’s Committee on Sanitary and Phytosanitary (SPS) Measures met from June 26-28.
During the meetings, ?members adopted a report on global food security and sustainable food systems, which the panel ?was instructed to undertake in an MC12 Declaration.
The report affirms the continued importance of prioritizing safe international trade for food, animal, and plant products and alignment with international standards.?
Samuel Crowell with the American Seed Trade Association (ASTA) moderated an SPS Committee side session called the “Agricultural Applications of Precision Biotechnology,” co-sponsored by the United States, Argentina, Australia, Canada, Guatemala, and Paraguay. Director for WTO Agricultural Affairs Robert Ahern noted he is “excited to continue the discussion on how the global agricultural community can increase its use of modern precision biotechnology to enhance productivity!”
On June 20, the WTO Standards and Trade Development Facility (STDF) released its annual report to mark STDF’s 20th anniversary and celebrate the public and private partnerships the organization has cultivated over the past 20 years.
The STDF works with developing countries to meet SPS standards to help strengthen agricultural trade. The report noted that in 2023, STDF successfully improved food safety, animal, and plant health measures in 34 countries.
USTR
Bilateral Meetings with Japan And Bahrain
On June 24, Tai met with Bahrain’s Minister of Industry and Commerce Abdulla bin Adel Fakhro to discuss the upcoming meeting of the U.S.-Bahrain Free Trade Committee.
USDA Global Trade Atlas reports the United States exported $69.8 million in agricultural and related products to Bahrain in 2023, including $17.1 million in dairy products. The United States imported $9.7 million in agriculture and related products from Bahrain, with $4.8 million in dairy products and almost $5 million in seafood products.
On June 26, Tai met with Japan’s Minister of Economy, Trade, and Industry Ken Saitō.
Tai and Saitō discussed the importance of working together to address third-party countries’ non-market policies and practices such as economic coercion. They also discussed the 2024 Indo-Pacific Economic Framework agenda and the Trade Pillar.
According to the Global Trade Atlas, the United States exported $13.4 billion in agricultural and related products to Japan in 2023, including $1.8 billion in beef and beef products and $1.4 billion in pork and pork products. The United States imported $1.5 billion from Japan in agricultural and related products, including $117.7 million in distilled spirits.
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