Early Challenges And Big Picture Questions Loom

BY PATRICK WADE | Policy Director, Texas Grain Sorghum Producers

Although trade policy was one of the most divisive issues during the four years of the Trump presidency, it played a surprisingly limited role in the buildup to the general election. With Joe Biden set to assume the office of the President in January 2021, we have little to go on in terms of charting his administration’s possible course of actions to expand and improve the free flow of American goods around the world.

In 2016, President-elect Trump was on the record of promising to withdraw from the soon-to-be-ratified Trans-Pacific Partnership and frequently hinted at his eventual renegotiation of the North American Free Trade Agreement. President-elect Biden has been considerably more cryptic. In the throes of a pandemic and economic recession, he broadly asserted that his first priorities would be domestic policy, saying, “I’m not going to enter any new trade agreement with anybody until we have made major investments at home and in our workers…” However, there are a few immediate trade policy issues that the 46th President of the United States will not be able to ignore, and many other big picture agricultural trade policy concerns that industries and interest groups must vigilantly press the administration to address.

First and foremost, regardless of Biden’s interest in negotiating new free trade agreements, he will almost certainly need to shepherd ongoing negotiations with the United Kingdom across the finish line. The U.K., our seventh largest trading partner and a major diplomatic ally, has finally come to an agreement on its terms for leaving the European Union, and now must sign off on its own free trade agreements with trading partners around the world. Negotia-

tions for this process began earlier this year and have progressed smoothly, although philosophical differences about agricultural sanitary and phytosanitary protocols persist. While there is unlikely to be many bulk commodity sales to the U.K. under this new agreement regardless of philosophical compromise, these negotiations represent an opportunity to tip the global regulatory scales more towards science-based agricultural policymaking. Regardless of whether or not a Biden administration tackles those philosophical differences head on, Brexit will likely force our hand to finalize and approve a new free trade agreement with the U.K.

Similarly, negotiations over a free-trade agreement with Kenya have been ongoing for most of 2020. While there is less urgency than compared to a post-Brexit U.K., Kenya’s President Uhuru Kenyatta is intent on penning an agreement with the U.S. before the 2022 Kenyan elections. This would be the United States’ first free trade agreement with a sub-Saharan African nation, a region that is set to double in population - to over two billion - by 2050. A Biden administration will need to decide whether or not to continue the momentum started by these groundbreaking negotiations. On behalf of the Texas sorghum industry, we are strongly encouraging the new administration to continue these negotiations and use the agreement as a framework to expand free trade with many high-growth regions of Africa, as they have a deep historical familiar with growing and using grain sorghum.

Lastly, although the Office of the United States Trade Representative has not formally opened negotiations with India, delegates from our two countries have discussed a limited-scope trade agreement to serve as a foundation for expanded trade. With respect to agricultural imports, India is one of the most protectionist nations in the world, applying tariffs of 50% to commodities like sorghum. Although this agreement would not have removed every barrier to trade with the rapidly-growing nation, it would have helped to thaw the ice. All indications were, though, that these negotiations were driven in large part by President Trump and his personal friendship with Indian President Narendra Modi. That, in conjunction with its informal negotiation status, suggests discussions with India are not expected to resume as seamlessly as formal negotiations with the U.K. or Kenya.

Removing barriers to free trade is not a process confined to negotiating bilateral or multilateral agreements, though. The Biden administration’s approach to combatting emerging technical and non-tariff barriers to trade, such as maximum residue levels and sanitary and phytosanitary protocols in agricultural trade, in expected to include a renewed focus on global standards. For decades, the World Trade Organization (WTO) has been the primary forum for redressing its members’ trade distorting practices. However, as a result of frustrations over the WTO’s inability to impose meaningful punishments on countries like China, whose economies are an opaque patchwork of free-market and state-owned forces, the Trump administration has severely restricted the body’s ability to govern at all by blocking appointments to its appellate body. Biden has indicated that his approach to countering China’s growing economic hegemony will incorporate more global partnerships than Trump’s unilateral, tariff-based tactics. Whether that extends to reforming the WTO to empower the body to hand down more meaningful punishments, though, remains to be seen.

Along similar lines, although he was not seen as a leader on this particular issue, Biden did serve as Vice-President during the negotiation of the Trans-Pacific Partnership (now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP), which was intended in part as a geopolitical counterweight to China’s deepening influence in the region. Many industries, including Texas sorghum, are keenly interested in the U.S.’s return to the CPTPP. Signatories like Vietnam are growing rapidly and are already sophisticated grain importers with a significant feed deficit each year. The southeast Asian nations within CPTPP represent significant opportunities to diversify U.S. commodity markets.

The clock is already ticking on many of these issues. Last month, fifteen countries – including China, Japan, Australia, and Vietnam – signed the Regional Comprehensive Economic Partnership, a free trade agreement expanding trade across Asian-Pacific countries. Each year that passes without U.S. action only entrenches other nations as the de facto trading partners in this rapidly-growing region. Furthermore, the European Union continues to pursue free trade agreements around the world - with the South American regional bloc Mercosur in 2019, for example - that codify its precautionary principle, which disregards science-based thresholds for chemicals and biotechnology in favor of blanket bans.

Procedurally, the clock is also ticking. Historically, the negotiation of trade agreements is a power assigned to Congress. However, for over thirty years, Congress has delegated that authority to the Executive Office in the form of Trade Promotion Authority (TPA). That authority is scheduled to expire in July 2021. According to it, the final text of any new trade agreements – including ongoing efforts with the U.K. and Kenya – must be submitted to Congress by April 2021. Whether or not Congress will renew TPA remains to be seen. Within the Democratic Party exist significant political fault lines with respect to trade policy, and Republican opposition to the executive powers of a Democratic presidency are also well-noted. Biden’s appointment of Katherine Tai, chief lawyer for the House Ways and Means Committee, to the top trade position of Office of the United States Trade Representative may go a long way in building bridges with Congress over TPA.

This overview doesn’t even touch on the ongoing enforcement of the United States-Canada-Mexico Agreement (USMCA), which saw its first notice of enforcement action this month when the U.S. challenged Canada’s allocation of tariff-rate quotas for dairy production. Mexico continues to threaten to shut down imports of agricultural products that use glyphosate and has failed to approve any new biotechnology products in over two years, all policies that are likely in conflict with USCMA’s new biotechnology chapter. The Biden administration will likely feel strong pressure from industry to take actions with respect to all of these concerns, and more.

Although trade policy was not a hot button issue on the campaign trail, President-elect Biden will have little choice but to step up to the plate on many imminent challenges. Texas Grain Sorghum Producers and the rest of the agricultural industry look forward to continuing to advocate for expanded and fairer markets for all American agricultural products.

The USDA-Natural Resources Conservation Service (NRCS) in Texas has established a second funding application deadline of Feb. 12, 2021, for the Environmental Quality Incentives Program (EQIP).

“We are encouraging producers to call their NRCS office to discuss conservation planning and financial assistance options,” said Kristy Oates, NRCS state conservationist for Texas. “Applications received by the February 12 deadline will be ranked for funding by early June.” Applications are taken year-round for NRCS programs, but deadlines are announced to rank and fund eligible conservation projects. Producers interested in signing up for EQIP should submit applications to their local USDA service center. If already a USDA client, a producer can submit applications online via Farmers.gov.

EQIP is a voluntary program that provides financial and technical assistance to agricultural producers. Technical assistance is provided without a fee from NRCS specialists to help landowners and land managers plan and implement conservation practices to help them meet their land management goals, address natural resource concerns and improve soil, water, plant, animal, air, and related resources on agricultural land and non-industrial private forestland.

For additional information visit the NRCS Texas website at www.tx.nrcs.usda.gov. Applications for EQIP are accepted on a continuous basis. Producers interested in EQIP can contact their local USDA service center or visit the NRCS EQIP web page.