TRADE UPDATE: Food & Agriculture | September 17, 2024

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

HIGHLIGHTS

Congress: The House of Representatives recently passed a bill to add the U.S. Secretary of Agriculture to Committee on Foreign Investments in the United States (CFIUS) for review of transactions including land, biotechnology, transportation, storage, and processing.

2024 Campaign: The Farm Foundation hosted a discussion of the agriculture platforms of both 2024 presidential candidates, including their positions on trade.

China:

• China has announced an anti-dumping investigation into Canadian canola seed exports, following Canada’s announcement to implement tariffs on Chinese EVs, steel, and aluminum.
• USTR announced final modifications regarding the statutory review of the tariff actions in the Section 301 investigation into China.

Mexico: Mexican meat consumption is predicted to increase in the next decade according to the latest USDA Economic Research Service projections.

OECD: The Organization of Economic Cooperation and Development (OECD) released a report detailing the instances of export restriction on staple crops from January 2007 through April 2024.

WTO: The World Trade Organization public forum took place Sept. 10-13 and focused on the theme of “Re-globalization,” including two events on agriculture trade.

“The (Chinese Communist Party) has been quietly purchasing American agricultural land at an alarming rate, and this bill is a crucial step towards reversing that trend. We know that USDA’s foreign purchase tracking is wildly flawed, and by adding the Secretary of Agriculture to CFIUS, we can begin to correct course. Food security is national security, and it is incumbent upon us to keep our adversaries far away from the lands that feeds our country, and the world.” - Rep. Dan Newhouse (R-WA)

CONGRESS

House Passes Bill on Foreign Farmland Ownership

The House of Representatives approved Rep. Dan Newhouse’s (R-WA) bill, the Protecting American Agriculture from Foreign Adversaries Act, last week in a bipartisan 269-149 vote.

The bill adds the Secretary of Agriculture to Committee on Foreign Investments in the United States (CFIUS) for review of transactions including land, biotechnology, transportation, storage, and processing.

The bill also requires the Secretary of Agriculture to report any transaction that may be a threat to national security.

The bill specifies that a “reportable agricultural land transaction” covers those involving a person from China, North Korea, Russia, or Iran.

2024 Campaign

Agricultural Platforms of The Candidates for President

The Farm Foundation Forum hosted a discussion on the platforms of Democratic nominee Vice President Kamala Harris and Republican nominee and former President Donald Trump. The discussion covered the broad agricultural policies of both candidates on topics such as the Farm Bill, international trade, environmental policy, and rural financial security.

Ambassador Kip Tom, speaking for the Republican ticket, focused on:

• Trump’s negotiation of trade deals;
• Decreasing reliance on foreign agricultural inputs, and;
• Creating a national agricultural strategy which addresses foreign competition.

Rod Snyder, a former EPA official speaking on behalf of the Democratic ticket, focused on:

• The potential negative impacts of Trump’s proposed tariff plan on farmers and food costs;
• The Biden-Harris Administration’s trade efforts with Mexico, Japan, and India, and;
• Support for trade promotion programs that help U.S. food and agricultural exporters diversify export markets.

China

China Launches Anti-Dumping Investigation into Canadian Canola Exports

China initiated an anti-dumping investigation into Canada's 2023 canola seed exports.

China is Canada’s largest canola seed export destination.

This follows Canada’s announcement of Canadian tariffs on Chinese electric vehicles and steel and aluminum products intended to “protect Canada’s workers from China’s unfair trade policies and to prevent trade diversion resulting from recent actions taken by Canadian trading partners.”

Section 301 Tariffs

USTR announced final modifications regarding the statutory review of the tariff actions in the Section 301 investigation into China.

This announcement includes:

• Timing and rates for tariffs on face masks, medical gloves, needles, and syringes;
• Proposal regarding coverage of additional tungsten, wafers, and polysilicon tariff lines;
• An exclusion for ship-to-shore cranes;
• An expansion of the scope of the machinery exclusions process to include five additional tariff lines; and
• Modification of the coverage of proposed exclusions for solar manufacturing equipment.

Information on the revision to modifications is available from USTR.

MEXICO

USDA Projections Show Rise in Mexican Meat Consumption

Mexico’s meat consumption is expected to rise with increases in poultry consumption to increase the most, according to a new projection from USDA’s Economic Research Service (ERS).

According to the report, poultry, pork, and beef consumption expected reach 82.5 kilograms per capita in 2033; both domestic production and imports of meat are expected to grow in Mexico.

This development continues a long-term trend the report linked to the North American Free Trade Agreement (NAFTA), which created a more integrated market among the United States, Canada, and Mexico for agriculture products.

OECD

Agriculture Export Restrictions

The Organization of Economic Cooperation and Development (OECD) released a report detailing the instances of export restriction on staple crops from January 2007 through April 2024, based on information publicly available through the Agricultural Market Information System (AMIS) initiative.

The report shows increased use of export restrictions from 2007-2008 during the global food price crisis, in 2020-2021 during the COVID-19 pandemic, and in 2022 following Russia’s invasion of Ukraine.

The report found that different types of export restrictions tend to be used for different products. For example, maize was mostly targeted by export taxes and prohibition while rice mainly faced minimum export prices, export quotas, and export prohibitions.

The report also examined the duration that the export restrictions are in place and found 45% of export bans introduced during this period lasted between one and six months, 50% of export quotas lasted between six months and one year, and 26% of export taxes lasted longer than a year.

Trade rules in GATT 1994 and the WTO generally prohibit the use of export restrictions but make exceptions for temporary use to prevent or relieve critical shortages of foodstuffs.

WTO

Public Forum

The World Trade Organization 2024 Public Forum began on Sept. 10.

The forum featured side events specifically related to food and agriculture on the intersection of WTO agreements and sustainable farming and sustainable practices and digital technologies in Latin American agriculture.

The WTO released the World Trade Report 2024, reaffirming global trade’s strong role in narrowing income gaps between economies. The report:

• Acknowledged gains from global trade are unevenly distributed, but this “does not inherently increase inequality;”
• Argued trade inclusivity is important amidst risking geopolitical tensions, technological revolution, and climate change;
• Called for complementary domestic policies that promote trade openness and help manage trade costs to make trade more inclusive.

“Debating Agriculture and Food Security Issues and the way forward with the negotiations of the agreement on agriculture” – WTO Director-General Ngozi Okonjo-Iweala