Trade

trade

ASA Positions

  • ASA supports negotiation of the Trans-Pacific Partnership trade agreement between the U.S., Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam.
  • ASA supports Japan’s participation in the TPP negotiations.
  • ASA supports a TPP agreement that significantly improves access to foreign markets for U.S. soy and livestock products.
  • ASA opposes measures that are protectionist and that encourage our trading partners to take similar actions.
  • ASA opposes currency legislation or any action by Congress to regulate the value of foreign currencies.
  • ASA calls for the U.S. to work with the international community to develop a multilateral approach to dealing with foreign currency concerns and China’s exchange rate.
  • ASA supports the work of the U.S.‐EU High Level Working Group on Jobs and Growth, which is looking at ways to eliminate tariffs and market access barriers to trade; and increase regulatory convergence and cooperation and alignment of standards and practices between the two regions.
  • ASA believes USTR should remain an independent agency within the Executive Office of the President, focusing on trade negotiations, trade agreements and trade enforcement.
  • ASA supports negotiation of the Transatlantic Trade and Investment Partnership (TTIP) between the EU and U.S., provided such an agreement takes into account the unique needs of soybean farmers and works to eliminate barriers to agricultural trade in Europe.
  • ASA supports negotiation of the Transatlantic Trade and Investment Partnership (TTIP) between the EU and U.S. that would establish an aggregate approach for certifying U.S. compliance with the sustainable land use requirements of the Renewable Energy Directive (RED).
  • ASA supports progress in the Doha Round of WTO trade negotiations that provides meaningful market access gains for soy and livestock products, eliminates Differential Export Taxes (DETs), and results in advanced development countries taking on greater commitments in all three pillars of the agricultural negotiations that are more similar to the commitments required of developed countries.

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Issues Background

TPP

On October 5, 2015, negotiators on the Trans-Pacific Partnership (TPP) completed the deal. With the passage of Trade Promotion Authority (TPA) in the summer of 2015, the Administration and Congress are currently working through predetermined steps to bring the TPP agreement to Congress for a vote. On February 3, 2016, all twelve countries signed the TPP deal and in May 2016 the International Trade Commission (ITC) released their report on TPP. The ITC report showed positive outcomes for the U.S. under TPP, with the agriculture industry having the greatest gains. With the completion of the ITC report, the President–in accordance with TPA–can now send the draft TPP text to Congress for consideration

ASA strongly supports the TPP deal and has urged Congress to bring the bill to the floor for a vote as soon as possible.

TTIP

The Transatlantic Trade and Investment Partnership (TTIP) negotiations have made slower progress, with estimates that they will take at least a year and possibly as long as five years to complete.  ASA has forcefully and repeatedly stated that TTIP must address five key issues:  (1) reform the EU biotech approval process to make it timely, transparent, and science-based: (2) resolve soybean industry concerns with the EU’s Renewable Energy Directive, which imposes unfair, costly and onerous sustainability and greenhouse gas emission reduction requirements on U.S. soybean production and soyoil used as a feedstock in EU biodiesel; (3) clarify the impact on access for U.S. soybeans and soybean meal to the EU market of the “coupled option” included in the recent CAP reform to support increased production of protein crops in the EU; (4) clarify the impact on U.S. access to the EU market of the EU’s new pesticide law, which could de-list crop protection products used in the U.S.; and (5) meet the demands of the U.S. livestock industry for increased market access by eliminating sanitary regulations that restrict imports.

The current Administration has stated that they hope to complete TTIP in 2016. While it is the general belief of ASA that this is not a tangible goal, ASA will continue to engage with USTR on biotech approval issues through the context of TTIP as if it will be concluded this year. The United Kingdom’s vote on June 24th to leave the EU will further complicate the completion of TTIP in 2016 and beyond.

ASA, USSEC, USB and other industry organizations have worked with USTR and USDA for over three years to find a way to address the RED, either through bilateral negotiations or within the context of TTIP.  DG-Energy has opposed initiating bilateral talks, and most recently agreed to review a “scheme” for complying with the RED’s sustainability requirements based on the Soybean Sustainability Assurance Protocol (SSAP), developed by the soy family.  The SSAP- based scheme was submitted to DG-Energy in April 2015, in advance of the 9th round of TTIP negotiations. ASA has stated to the EU Commission and to USTR and USDA that, unless U.S. concerns with the RED are resolved prior to or within the context of the TTIP negotiations, it will be forced to oppose any final agreement. In May 2016, USSEC resubmitted their RED scheme to the EU for consideration.

Low Level Presence (LLP)

Countries that export and import biotech crops have different regulatory systems, resulting in asynchronous approvals.  As a result, there can be delays of two years or more between the time a biotech trait is approved in an exporting country and its approval in a major foreign market.  Since most countries with regulatory approval systems apply a “zero tolerance” for the presence of an unapproved trait, cargoes containing even a trace can be rejected, resulting in significant losses to the exporter.  However, biotech companies are increasingly anxious to bring new traits to market, and are developing and implementing limited, stewarded launches prior to approval in all foreign markets.  This raises the potential for error and liability.

The ultimate solution to these delays and risks would be a global agreement to synchronize approvals, or “mutual recognition agreements” under which importing countries would accept a decision to deregulate a trait in an exporting country.  These approaches appear unlikely to be accepted in the near future.  A workable alternative would be for governments to agree to accept a commercially feasible Low Level Presence (LLP) for a trait approved in an exporting country but not in importing countries.  The grain trade indicates an LLP of 5%, for example, could be achieved under current marketing practices.  In addition, if a country preferred, it could implement some other “trade facilitating measure” that would not set a threshold level for LLP but would otherwise accommodate the presence of an unapproved trait in a shipment.

The U.S. Government is participating with other exporting and importing countries in a Global Low Level Presence Initiative (GLI), with the goal of reaching an agreement on how to address the issues of synchrony and LLP on a global basis.  However, EPA and FDA have policy requirements that aren’t consistent with accepting imports that may contain biotech traits that haven’t been approved in the U.S. (e.g., potential imports from Brazil).  The U.S. Biotech Crops Alliance (USBCA) has established a task force that has met with the USG inter-agency group multiple times to discuss the difference between science-based regulations and the need for a marketing-based standard, similar to those used to establish the grade or level of foreign material in a shipment.  The inter-agency group was considering these ideas in advance of the GLI meeting which was held on February 17-18, 2016, in Rome on the outskirts of the FAO meeting. The meeting was viewed largely as a success with a number of countries recognizing the need for approaches to resolve LLP concerns. The U.S. has agreed to write a draft LLP practical approaches document. The USBCA has weighed in on what they feel should be included but is still waiting to see the draft proposal from the USG.

Biotech Regulatory Approvals by China and the EU

China

China’s regulatory approval process for biotech traits continues to lack transparency and timeliness.  The Ministry of Agriculture (MOA) currently does not initiate its approval process until a biotech trait is approved in an exporting country, which can delay final approval by up to two years.  MOA further requires field trials and testing, even when applications are for importation and use, but not for production.  And it has reduced the number of “windows” during which it considers new approvals from three to one time per year.

Working with the U.S. Biotech Crops Alliance (USBCA), ASA was successful in having the biotech approval issue on the agenda during talks between President Obama and President Xi in September 2015.  The issue was also included in the Strategic Agricultural Innovation Dialogue (SAID) held on the outskirts of President Xi’s visit. The SAID and the surrounding meetings resulted in a commitment by the Chinese to move forward on biotech trait approvals and to work within the SAID, JCCT and other forums to enhance transparency and predictability.

In February 2016 prior to the Chinese New Year, the Chinese Ministry of Agriculture alerted companies that it will approve three pending biotech traits, including two that are soybean specific: Monsanto’s dicamba-tolerant variety, as well as that company’s high-steardonic acid/Omega 3 bean variety. Also approved was a new cotton trait from Syngenta. ASA is of course very pleased at the approvals of both the Dicamba-tolerant and the SDI trait, however we’re disappointed that only three of the 11 pending traits were granted approval. Among those traits that did not receive the go-ahead from MOA are Monsanto’s Vistive Gold soybeans, and Bayer’s isoxaflutole and glyphosate tolerant Balance Bean (FG72).

Since the February announcement of the three biotech trait approvals, the USG has engaged with China on biotech issues at both the JCCT and the S&ED in June 2016. The S&ED was more productive than the JCCT and resulted in a commitment by the USG to produce a study on the impact of asynchronous biotech approvals. ASA has been engaged with the USG on how to conduct this study.

EU

The European Union continues to struggle with providing timely and predictable approval of biotech traits and continues to shift away from science based risk assessments to hazard based risk assessments. After the EU voted to not move forward with the 2015 Opt-Out proposal there was hope that the EU Commission would return to reviewing biotech trait approvals based on their regulatory guidance. However, since the beginning of 2016 the U.S. has been awaiting final approval of three biotech traits (2 soybean, 1 corn) which have cleared the EFSA process. These traits are being held up over political concerns regarding public sentiments concerning GMO and pesticides. ASA had been advised that the final approval of these biotech traits was complicated by the Glyphosate renewal process in the EU. Now that the EU Commission has extended Glyphosate’s registration through 2017, ASA is continuing to work with USTR and its foreign counterparts to urge the approval of the pending soybean traits.

Cuba

In December 2014, the Obama Administration announced a shift to normalize diplomatic and economic relations between the United States and Cuba. While the efforts by the President are necessary and encouraging, there are limits on what can be done administratively and Congress has to continue to address the issue through legislation. As a member of the U.S. Agricultural Coalition for Cuba (USACC), ASA has been working with Congress to eliminate barriers to trade, with the long-term goal of fully lifting the trade embargo. Currently there are bills in both the House and Senate to eliminate both trade and travel barriers with Cuba. While a number of these bill have bipartisan support, we have not seen significant legislative movement.

The Obama Administration reopened the U.S. embassy in Cuba in late July 2015. The U.S. will be able to station more American personnel in Cuba, and that should be a big help in practical terms for promoting American businesses. Reopening the embassy was a critical step in enhancing the ability of Americans to travel and trade with Cuba. The Senate Appropriations Committee included a provision in the FY17 Appropriations bill to fund USDA personal in the U.S. embassy in Cuba. However, this bill has yet to move through the Senate floor process. Additionally, prior to President Obama’s 2016 visit to Cuba the Administration announced that USDA checkoff dollars can now be used on certain research purposes in Cuba.

Restoring normal trade relations with Cuba is beneficial to U.S. soybean producers because it represents an additional market for soy products as well as an additional market for poultry and meat products.  Due to Cuba’s proximity and correspondingly lower freight costs, the U.S. should have an advantage over our foreign competitors. In the last year, Cuba imported about a half-million tons of soybeans and soybean products.  However, a little less than half of that total came from the U.S. The nearly quarter-million tons of U.S. soybeans that have gone to Cuba in the last year have been exported with difficulty resulting from the red tape involved with the 1960s embargo. Lifting the trade barriers would allow U.S. soybean producers to grow the export market to Cuba and better compete with other exporters such as Canada, Brazil, the European Union, and Argentina that have been increasingly taking market share from the U.S. because they do not face the same restrictions.

Taiwan

Taiwan regulation for biotechnology-derived crops has been recognized internationally until recent years.  Before 2014, food approval was required only for corn and soybean, and GMO labeling exempted highly refined products (e.g., oil, sugar, corn syrup, etc.) with 5% AP threshold.  Over the last two years, however, the following regulations on GMO’s have newly come into force in Taiwan (in chronological order), resulting in more regulations that are not science based and lack feasibility and predictability at the implementation level:

  • On Dec 30, 2014, the Ministry of Education amended the School Health Act for ban of biotechnology food ingredients;
  • On May 25, 2015, TFDA revised GMO labeling regulation for inclusion of highly refined products;
  • On Feb 4, 2016, the Counsel of Agriculture (COA) passed amendment of Feed Control Act to regulate all biotechnology-derived crops for feed use;
  • On Feb 5, 2016, Taiwan Food and Drug Administration (TFDA) implemented the expanded scope of food approval requirement to all biotechnology-derived crops.

All the new regulations in the last two years were passed without consistent process and WTO notice for international comments or scientific consultation.  Also, they lack a scientific basis, and feasibility of the implementation is questionable. The non-scientific basis for the regulatory requirements and inconsistent process for policy development have impacted U.S. trade exports. ASA has added this issue to its legislative priorities agenda and is working with Congress and the Administration to urge Taiwan to repeal its bans on GMO products.

Download ASA Position Paper on Trade
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