ASA advocates for trade expansion and market access for soybeans, including removal of the China 301 tariffs and progress on new free trade agreements (FTAs).
ASA continues to engage with and monitor the progress the Administration is making in its negotiations with China and implementation of the 2020 U.S.-China Phase 1 Agreement. ASA is working with the Administration and Congress to resolve outstanding tariff issues between the U.S. and China; the countries have been engaged in tit-for-tat tariff retaliation since 2018, which led to retaliatory tariffs on U.S. soybeans in July that year. We are hopeful the Phase 1 Agreement is a positive sign toward tariff relief for soybean farmers and a return soon to market-driven exports.
With the U.S.-Mexico-Canada Agreement (USMCA) ratified, ASA looks to the United States Trade Representative (USTR) to negotiate new FTAs with countries that have potential to increase soy and livestock products. These include continuing work on a comprehensive U.S.- Japan agreement, as well as agreements with the EU, UK, India and other significant soy and livestock-importing countries.
ASA supports a doubling of funding for the Foreign Market Development (FMD) program and the Market Access Program (MAP). U.S. farm groups pushed hard to double funding for the MAP and FMD in the 2018 Farm Bill. While these programs received a marginal increase, doubling funding continues to be a priority.
Trade promotion and market access are major priorities for the U.S. soybean industry. Tariff and non-tariff barriers to trade are frequent problems for our exports, and these barriers limit the potential for predictable global market access for soybeans, soybean meal and soybean oil. ASA remains concerned with the current U.S. approach to bilateral and multilateral agreements. The U.S. was once a leader in establishing new free trade agreements. While the U.S. has engaged in negotiations of existing agreements such as the U.S.-Mexico-Canada Agreement (USMCA) and the updated U.S. Korean Free Trade Agreement (KORUS), our last new FTA entered into force in 2012, despite having negotiated the Trans-Pacific Partnership (TPP). IPEF: The Indo-Pacific region is one of the fastest growing and most reliable markets for U.S. soybeans. The Biden Administration’s announcement of the Indo-Pacific Economic Framework (IPEF) has the potential to benefit U.S. soy, despite lacking critically needed market access components. ASA encourages the administration to use the IPEF as a means of addressing non-tariff barriers facing U.S. soy in the region. These NTBs include the uneven regulation of agricultural biotechnology across the region, and misaligned or missing maximum residue limits (MRLs) for plant protection products. Both irritants are increasingly problematic barriers to trade for U.S. soy in the Indo-Pacific Region. ASA continues to encourage USTR to look to multilateral free trade agreements to maximize the U.S.’s strategic position in the global economy and to give U.S. agriculture much-needed market access in emerging economies.
It is critical for the continued success of U.S. agriculture that Congress invest additional dollars in the Agricultural Trade Promotion and Facilitation Program in the next Farm Bill. ASA strongly recommends doubling the minimum annual mandatory funding for the Market Access Program to $400 million and the Foreign Market Development Program to $69 million. ASA also supports:
China is the largest importer of soybeans in the world and is the biggest export market for U.S. soybeans. U.S. soy represents more than 35% of China’s soy imports, and one in three rows of beans grown in the U.S. is shipped to China to fill that great demand. After the devastating trade war in 2018, the China Phase One deal was instrumental in providing relief from the tit-for-tat, retaliatory tariffs levied on U.S. soybean imports by China in 2018, and that reprieve—while not permanent—has been beneficial for U.S. soybean growers. Despite the waiver process created by the Phase One agreement, ASA remains concerned about the ongoing effects of Section 301 tariffs on the trade environment. While the waiver process is functional and resulted in near record levels of exports in the 2020/21MY, the waiver process is not guaranteed by China and could change at any time, resulting in elevated tariff levels that would again significantly impact U.S. exports. The outlook for U.S.-China relations is unclear, and our global competitors are aware of this situation. ASA understands that there are myriad geopolitical issues facing the U.S. when it comes to negotiating with Beijing, and we are supportive of the U.S. government finding a long-term solution to these longstanding issues. However, U.S. soybean growers need predictability and certainty that we will retain market access in China. We support a long-term solution to U.S. – China relations that is more predictable and stable.
