Senior Farm and Ranch Broadcaster, Ron Hays, is talking with National Cattlemen’s Association executive director of government affairs, Kent Bacus, about U.S. Trade deals.
According to Bacus, the overall government approach to pursuing new trade agreements has seen a shift. “When you go back to previous administrations, from Bush and Clinton, all the way up to the Obama Administration, you had a lot of traditional trade agreements that would have the approval of Congress and were negotiated by the executive branch. It helped open up a lot of export markets. Under Trump, you saw a lot of bilateral agreements merge, and you saw a lot of executive agreements that didn’t necessarily bypass Congress, but were able to accomplish similar results with a different path forward.”
He went on to explain that the Biden administration took the position for the first two years of their leadership that they were going to step back and review what has been done. Since they have come forward Bacus, has heard comments suggesting that trade agreements are outdated and the U.S. government needs to shift the way that it engages with trade agreements.
“Sadly, in that transition, they have set aside market access,” Bacus stated. “By that, I mean tariff reductions and moving tariff barriers for our products into other countries. For the cattle industry, that is huge. Prior to the creation of a Free Trade Agreement, we had a forty percent markup on our products into Korea, into Japan, it was 38.5 percent, into Columbia, it was eighty percent. Because of trade agreements, we could move those barriers. Now we have much more competitive access into those markets.”
He explained that the Biden Administration has shifted from agreements to Trade Frameworks, which focus on technical aspects such as non-tariff trade barriers. While those are important and have resulted in significant gains in other markets, and the non-tariff barriers are addressed in a broader comprehensive trade agreement. However, without market access on the table, it has been difficult to access new trade partners.
“We aren’t expecting a lot of action out of the administration in the last part of 2024,” he concluded. “Hopefully, we can get some technical access into Australia, and some other things across the finish line, but really, we need to see a whole government approach to reengage and have the United States lead in international trade policies. We stepped back, and China filled the void. Without the U.S. truly engaging and trying to build stronger relationships, it will be very difficult for us moving forward.”
He added that no matter which administration wins in November, it needs to garner the support of Congress and reengage in international trade.
In January 2020, President Trump met with Chinese Vice Premier Liu He at the White House, and they both signed the “Phase One” trade deal. Of this Bacus said, “The Trump did a great job of building on the success of previous administrations trying to reopen the market that we had lost in 2003. We were successful getting our foot back in the door, and through the Phase One agreement, we were able to open that even further. It really removed a tremendous amount of barriers and is now a $2.5 billion dollar market for us. It is our second largest, only to Korea. It was a great opportunity for us, but unfortunately, China hasn’t delivered on its promises.”
As a result of China’s failure to deliver, the U.S. beef industry has seen some non-tariff barriers such as disputes over ractopamine, which is a feed additive that China promised to establish a maximum residue level on, but didn’t adhere to. China has also delisted some significant meat packing facilities with claims that they are detecting ractopamine.
“They even delisted a cold storage facility, which I don’t have any idea how that would actually be relevant, but this is China playing games,” Bacus said. “China is an important market for us, but it’s not the only market for us. We definitely want to diversify. We want to be able to sell to as many other places as possible, but we can’t do that without market access which is why we need the government to reengage. Otherwise, we just have big markets that we have to focus on and that gives those countries potential leverage over the United States. We need to diversify and you do that through sound trade policies.
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