It’s no surprise that in the first six months of the Biden administration coming off the COVID pandemic, there’s been very little fanfare on trade, especially when you compare it to the dramatic actions taken by the Trump administration in withdrawing from the Trans-Pacific Partnership and threatening to withdraw from NAFTA in the initial days of office.
Where the Biden administration will focus its efforts in the years ahead looks uncertain. United States Trade Representative Ambassador Katherine Tai continues to promise a worker-centric trade policy, but how this translates to improved market access for U.S. agricultural goods could create a stalled environment if action isn’t taken.
One of the touted accomplishments of the Trump administration was the renewed U.S.-Mexico-Canada Agreement, which celebrated its one-year anniversary on July 1. In the first in-person meeting since enactment, Tai and key government heads from Mexico and Canada met July 7 and 8.
Tai held a bilateral meeting July 7 with Mexico’s Secretary of Economy Tatiana Clouthier. On Thursday, Tai conducted a bilateral meeting with Mexico’s Secretary of Labor and Social Welfare Luisa María Alcalde Luján and later in the day with Secretary of Foreign Affairs Marcelo Ebrard. The Ambassador participated in a roundtable hosted by the American Chamber of Commerce.
When it comes to Mexico’s commitment to agricultural trade, one of the most important meetings for Tai while in Mexico came with Mexico’s Secretary of Agriculture and Rural Development Victor Villalobos.
Tai began by highlighting the significance of the bilateral agricultural trade relationship between both countries. According to a readout of the meeting, Tai emphasized the importance of Mexico immediately resuming the authorization of biotechnology products and inquired about the status of expanding access for U.S. fresh potatoes throughout Mexico. They also discussed the potential mutual benefits of aligning Mexico and the United States’ policy on ethanol gasoline blends.
USMCA also established procedures to enforce the agreement. In May, Tai initiated a dispute settlement proceeding over Canada's administration of dairy tariff rate quotas in order to preserve the market access expansion negotiated in the agreement. The U.S. dairy industry continues to monitor implementation of other key USMCA areas as well such as Canada’s Class 7 disciplines on dairy exports and Mexico’s trade-distorting regulatory proposals.
Trade Promotion Authority was instrumental in the passing of the United States Mexico Canada. “If properly implemented, USMCA is a positive step in the right direction. But it is not enough alone for U.S. dairy farmers and cooperatives to keep pace in global markets,” says Jim Mulhern, president and CEO of the National Milk Producers Federation.
The expiration deadline for trade deals to be presented to Congress hit on April 1, 2021 and the formal expiration of TPA was July 1
“By standing still, we slip further backward as competitors in Europe and New Zealand advance their own trade agreements with key markets. A forward-leaning trade agenda focused on expanding export opportunities for Made-in-America products is critical to dairy farmers. TPA is a vital tool in that process,” explains Mulhern.
TPA was last reauthorized by Congress in 2015 which offers fast track authority, providing trade negotiating power to the Executive Branch and requiring Congress to ratify trade agreements through an “up or down” vote that prevents amendments to the proposed trade agreements.
The primary purpose of TPA is to give the President leverage with trading partners during negotiations, preventing significant changes to the text once a handshake agreement is reached. The administration is still free to negotiate trade agreements without TPA authorization; however, any deals reached would be subject to amendments by legislators and would face an uphill battle to ratify.
“The Administration has yet to publicly prioritize reauthorization of TPA, a process that can take anywhere from months to years to accomplish,” says Peter Bachmann, USA Rice vice president of international trade policy.
American Soybean Association President Kevin Scott of South Dakota recently said in an interview that TPA is a necessary tool to push trade agreements forward, as other countries are more willing to negotiate knowing the deals will not face numerous obstacles and rewrites in Congress. ASA is hopeful the White House will request an extension of TPA and continue to keep expanding global markets a top priority.
NMPF and U.S. Dairy Export Council called upon the Biden administration to seek renewal of Trade Promotion Authority following its expiration July 1. To remain globally competitive, future trade agreements are vital for U.S. dairy farmers, workers and manufacturers, the groups say.
USDEC President and CEO Krysta Harden says one in six gallons of U.S. milk is destined for export and retaining foreign customers is absolutely essential to farmers.
“To accomplish that, we need to catch up with trading partners who have been speeding ahead with trade deals that give them a leg up over us in foreign markets. USMCA is an example of how TPA can help the U.S. expand trade opportunities, but that is only one advancement among many that are needed,” Harden continues. “Renewing our commitment to the global community and restoring American leadership starts with renewing TPA, so that U.S. dairy can realize new opportunities in places such as southeast Asia, Africa, South America and the UK.”
Bachmann says he’s hopeful that the administration will soon announce a nominee to be the USTR’s chief agriculture negotiator as well as resume trade talks with the United Kingdom and Kenya.
“If agreements can be reached, Congress can always retroactively reauthorize TPA to ratify those trade agreements that were caught in the lapse,” Bachmann says.
In comments made during a virtual USMCA event, House Ways and Means ranking member Kevin Brady, R-Texas, shared that USMCA showed there is strong support for trade moving ahead if the administration makes the commitment to negotiate strong deals. USMCA achieved an unprecedented 89% support level in both the House and Senate. He says after the historic bipartisan support, he’s convinced Congress and the administration can work together to do more.
“I will continue to urge the Biden administration to lead on trade with bold new trade agreements throughout the world that will set the standard and advance trade,” Brady says.