November 27, 2022

More focus on developing international trade important for U.S.

WASHINGTON — Developing continuity is important for U.S. trade policies with other countries.

“The trade policy that our country has been undergoing for the last two decades has been challenging regardless of which administration has been in office,” said U.S. Rep. Jim Costa, D-Calif.

“The initiative negotiated during the Bush administration and continued under the Obama administration to pursue the Trans-Pacific Partnership with other countries in the Pacific, I thought was a good strategy,” said Costa, a senior member of the House Agriculture Committee, during a roundtable discussion hosted by Farmers for Free Trade.

“But we’ve separated ourselves from the TPP,” Costa said. “And it’s been frustrating with the Biden administration because we didn’t get a trade ambassador until June.”

“I think we should re-engage with the countries that were part of the TPP because it is an important opportunity,” he said.

During the pandemic, Costa said, the United States learned a lot from the closure of restaurants and schools and about the complicated food supply chain.

“We saw the impacts on markets. For example, over 70% of bacon and pork bellies consumed in America occurs in restaurants,” he said.

“Now we are dealing with the bottlenecks at harbors and there are so many tankers going back empty,” said Costa, who is a third-generation farmer. “That’s an unfair trade practice because we’ve got products that could be filling those tankers that are returning to the Asian ports.”

Costa stressed the importance of assuring the United States-Mexico-Canada Agreement is fairly implemented.

“Mexico is a large market for American dairy products,” Costa said.

“Historically, even with NAFTA, we saw our neighbors use phytosanitary standards as a non-tariff barrier and we’re having to deal with that again,” he said. “We need clarity as to the priorities for this administration’s policy, where agriculture fits in and how they intend to deal with our allies and adversaries.”

Access to all markets for trade is a priority, Costa said.

“That includes the large Chinese market, but we must demand a level playing field and fair trade,” Costa said. “We must work together in a bipartisan basis, especially over the next six months.”

Corn Refiners Association

“With over 95% of consumers residing outside the U.S. borders, trade and access to foreign markets through the pursuit of trade agreements remains vital to the economic fortunes of U.S. workers, consumers and industries,” said John Bode, president and CEO of the Corn Refiners Association.

The association released an internal analysis of leading trade economies.

“I requested this analysis to bring simple facts of whether moving slowly, if at all, on new trade agreements means the U.S. is standing still or falling behind other leading trading nations,” Bode said. “The review is from 2010 to 2020, which spans administrations of both parties.”

In the last 10 years, Bode said, the U.S. progress on trade agreements has been modest and the outlook is not promising.

“Rival trading nations have rapidly expanded trade opportunities through bilateral and multilateral trade agreements,” Bode said.

“China is No. 1 in international trade and they’ve entered 10 new free trade agreements, including the Regional Comprehensive Economic Partnership, which is the world’s largest trade agreement,” he said. “The European Union is No. 2 in international trade, it has entered into eight new FTAs and Japan is No. 4 in international trade, entering seven new FTAs.”

Canada is No. 8, with eight new FTAs.

“The U.S. is No. 3 in international trade and has concluded four trade agreements including the modernization of NAFTA,” Bode said.

However, not all trade agreements are equal, Bode stressed.

“The benefits over the last decade from trade barrier reductions are $553 billion for the EU, $420 billion for China and $171 billion for the U.S.,” he said. “The U.S. benefit is 30% of what the EU achieved and about 40% of what China achieved, that’s not competitive.”

And, Bode said, the outlook is worse.

“Major trading partners are moving forward with new trade agreements, and in the past year, nearly half of a dozen countries expressed interest in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership,” Bode said.

“The Asian Pacific region is the fastest growing region in the world and China along with other nations are eager to enter the circle of CPTPP membership as the U.S. continues as an observer,” he said.

The Regional Comprehensive Economic Partnership, or RCEP, is an emerging multilateral trade agreement that excludes the United States.

“It creates the world’s largest trade agreement with 30% of the global economy and 30% of the global population,” Bode said. “It joins for the first time Asian trading giants — China, Japan and South Korea — and that agreement stipulates removal of tariffs on 91% of goods and the standardization of regulations on investing in intellectual property and e-commerce.”

The United States is losing markets, Bode said, as competitors are setting the rules of trade with potential customers.

“Our competitors are picking up momentum while we are slowing down in a game that takes a long time to score,” Bode said.

“The good news is there are many thoughtful leaders in Congress concerned about this situation and the Biden administration is putting capable people into key positions including Ambassador Katherine Tai and Secretary Tom Vilsack,” he said. “Good people may be able to make good things happen.”

Martha Blum

Martha Blum

Field Editor