By Kristy Goodfellow, Vice President of Trade and Industry Affairs and Ameya Khanapurkar, Trade Intern.
HIGHLIGHTS
- CHINA: A new House bill introduced by a key lawmaker would revoke China’s Permanent Normal Trade Relations (PNTR) status. Like the Senate companion bill, the legislation would increase tariffs to a minimum of 35% for non-strategic goods, place a minimum 100% tariff on strategic goods, and compensate U.S. farmers and manufacturers injured by retaliation through tariff revenue.
- ENVIRONMENT: Agriculture Secretary Tom Vilsack will participate in the 29th UN Climate Change Conference of Parties (COP), which runs from Nov. 11-22 and includes a Food, Agriculture and Water Day on Nov. 19.
- A new WTO report outlined how international trade can help lower global greenhouse gas emissions through utilization of environmental comparative advantage.
- MEXICO: Mexican President Claudia Sheinbaum indicated her government will soon propose protections for Mexico’s non-genetically modified white corn, which may seek to codify Mexico’s existing ban on GM cultivation in the country’s constitution.
- INDIA: The United States submitted to the WTO its estimation of India’s domestic support, input subsidies, and market support prices for wheat and rice, which the U.S. believes to be out of compliance with India’s WTO limits.
- Shipments of U.S. turkey to India have begun following tariff reductions that were secured as part of a 2023 resolution to a WTO poultry dispute.
- G20: WTO, OECD, and UNCTAD released a report on trade and investment measures between October 2023 – October 2024 which indicates a trade-restrictive trend.
- APEC: President Joe Biden raised concerns with the Chinese President Xi Jinping about unfair trade policies and non-market economic practices while also emphasizing that the U.S. will continue to take action to prevent advanced technologies from undermining U.S. national security.
- The Food and Agriculture Organization of the United Nations (FAO) Director General urged APEC to increase investment in expanding social protection systems, sharing best practices, promoting healthy diets, supporting smallholder farmers, enhancing agriculture resilience, and promoting gender equality and socio-economic inclusion.
“The key policy takeaway is that climate policies should be designed with their trade implications in mind. It may be tempting to assume that some collateral damage to the trading system is an acceptable cost in the fight against climate change. However, this overlooks a crucial fact: open trade is essential for making climate policies fully effective. The two must work hand in hand.” – Ralph Ossa, WTO Chief Economist
CHINA
HOUSE BILL PROPOSED TO INCREASE TARIFFS
- House Select Committee on the Chinese Communist Party Chairman John Moolenaar (R-MI) introduced a bill that would revoke China’s Permanent Normal Trade Relations (PNTR).
- The bill would result in China no longer getting the same tariff treatment as other WTO members. Instead, imports from China would face a minimum of a 35% ad valorem tariff on non-strategic goods; the minimum would increase to 100% for all strategic goods.
- The bill would also eliminate de minimis treatment for covered nations.
- A provision in the bill creates a mechanism whereby U.S. farmers and manufacturers injured by possible Chinese retaliation are compensated with tariff revenue.
- Sens. Tom Cotton (R-AR), Marco Rubio (R-FL), and Josh Hawley (R-MO) introduced companion legislation in the Senate earlier this year. That bill included the same tariff levels and allocation of tariff revenue to offset China’s retaliation on agriculture and other critical sectors.
ENVIRONMENT
UN CLIMATE CHANGE CONFERENCE COP29 BEGINS
- COP29 kicked off last week in Baku, Azerbaijan, and will run until Nov. 22.
- Senior Advisor to the President for International Climate Policy John Podesta led the U.S. delegation to COP29 in Azerbaijan.
- Agriculture Secretary Tom Vilsack is expected to participate in activities during the “Food, Agriculture and Water Day” on Nov. 19.
- Vilsack is expected to discuss U.S. agriculture’s climate change reduction and mitigation efforts, such as the Partnership for Climate Smart Commodities Program and the AIM for Climate initiative.
- Speaking on a USDA broadcast service publication, Erine Shea from Solutions from the Land commenting on COP29 says, “farms can be the solution to over half of the sustainable development goals.” Shea will also be traveling to COP29.
WTO REPORT ON TRADE AND EMISSIONS
- WTO Chief Economist Ralph Ossa outlined how international trade can help lower global greenhouse gas emissions.
- Osso suggests global greenhouse gas emissions can decline when economies specialize in industries where they have an environmental comparative advantage.
- He argues this would require “supportive climate policies to emerge,” such as a global carbon tax.
- Ossa addressed skepticism around trade’s ability to assist in tackling climate change, saying people associate transportation emission as a reason to limit international trade.
- Ossa argues that while it is important to decarbonize the transportation sector, transportation emissions represent a small share of overall emissions.
MEXICO
SHEINBAUM ADDRESSES GM CORN BAN
- Mexican President Claudia Sheinbaum indicates that her government will soon propose protections for Mexico’s non-genetically modified white corn that will be embedded in the country’s constitution.
- While details of the proposal are still unknown, Sheinbaum remarked that Mexico has the obligation to ensure that white corn grown in Mexico is not genetically modified, implying that the proposal might codify an existing GM cultivation ban.
- In Sheinbaum’s public comments, she emphasized the history of Mexico’s native corn varieties – domesticated by pre-Hispanic indigenous cultures – and the importance of genetic diversity as a form of biodiversity.
- Sheinbaum’s public discussion of this issue comes as interested parties await a final panel ruling on a U.S. challenge to Mexico’s non-GM corn ban under the U.S.-Mexico-Canada Agreement.
INDIA
INDIA’S DOMESTIC SUPPORT FOR WHEAT AND RICE
- The United States once again submitted a counter-notification to the World Trade Organization on India’s domestic support, input subsidies, and market support prices for wheat and rice.
- Argentina, Australia, Canada, and Ukraine cosponsored the counter-notification.
- U.S. Wheat Associates President Vince Peterson commented that India’s government “continues to be out of compliance on its commitments and its refusal to compromise on its level of support and public stockholding is blocking any progress on agricultural negotiations at the WTO. It is important to keep bringing this issue to light with hope that it will eventually pressure India to become a responsible trading partner.”
- The USA Rice Federation highlighted India’s flawed notification methodology, noting a U.S. government estimate that India’s true level of support to rice farmers is 87.9% of the market value in 2022/23, compared with the 10% limit that India agreed to when joining the WTO.
US TURKEY EXPORTS
- Shipments of U.S. turkey to India have begun following tariff reductions that were secured as part of a 2023 resolution to a WTO dispute.?
- Sen. Mark Warner (D-VA), called the shipment “a tremendous opportunity for Virginia's poultry producers and a huge step forward for US-India trade.” Warner also noted that he looks “forward to the ongoing cooperation between our two nations and to seeing a wealth of new opportunities open up for Virginia's poultry producers.”
- In 2023, the United States exported $2 billion in agriculture and related products to India, including more than $1 billion in tree nuts.
G20
REPORT SHOWS TRADE-RESTRICTIVE TREND
- WTO, OECD, and UNCTAD released a report on trade and investment measures between October 2023 – October 2024 which indicative a trade-restrictive trend.?
- “[T]here is increasing evidence of inward-looking and unilateral trade policy decisions creating uncertainty for the world economy,” the report states.
- WTO Director-General Ngozi Okonjo-Iweala remarked that the measures “on both the import and export sides, contribute to shortages, price volatility, and uncertainty.” Okonjo-Iweala called for G20 economies “to keep markets open and predictable, to enable goods to flow smoothly, and foster the certainty that helps incentivize investment and job creation.”
- The report uncovered that during the review period, G20 economies introduced 91 new trade-restrictive measures on goods covering $828.9 billion in trade.
- In the review period, there was a general “increase in the introduction of new general and economic support measures by G20 economies, echoing findings by the OECD and the IMF of a rise in industrial policies.”
APEC
MINISTERIAL AND US-CHINA BILATERAL
- On Nov. 16, President Joe Biden met with Chinese President Xi Jinping on the margins of the Asian-Pacific Economic Cooperation (APEC) Summit in Lima, Peru.
- According to the White House, Biden reflected on challenges and opportunities related to: communication, including military-to-military communications; counternarcotics and climate; the ongoing Russia-Ukraine conflict; sustaining peace and stability across the Taiwan Strait; and adherence to international law in the South China Sea. ?
- Biden raised concern about China’s unfair trade policies and non-market economic practices while also emphasizing that the U.S. will continue to take action to prevent advanced technologies from undermining U.S. national security.
- The Joint Ministerial Statement detailed a vision and commitments under the APEC 2024 theme, “Empower. Include. Grow.”
- Also during the APEC Economic Leader’s Week, Qu Dongyu, Director-General of the Food and Agriculture Organization of the United Nations (FAO), urged APEC to increase investment in expanding social protection systems, sharing best practices, promoting healthy diets, supporting smallholder farmers, enhancing agriculture resilience, and promoting gender equality and socio-economic inclusion.
- Qu called on members to increase financing to address the funding gap for food security and nutrition initiatives.?
