6 International Marketing and Trade of Agricultural Products

6.1 Introduction

Federal and state governments play a critical role in ensuring American agricultural producers access to international markets that are operated in an equitable manner to our own.  Obtaining market access for our agricultural products should be one of the highest priorities for the Administration and Congress.

6.2 Expansion of Trade

(Updated September 2015)

The  multilateral WTO process has the greatest potential in raised and harmonized standards that level the playing field in regard to treating labor fairly, not degrading the environment and empowering family farmers and ranchers rather than exploiting them.

  • NASDA supports efforts to liberalize world trade in agriculture that we believe should continue through the multilateral process and through regional free trade agreements.
  • Until such time as other countries phase out their export subsidies entirely, NASDA encourages the federal government to work to end export subsidies across all countries.
  • NASDA encourages the federal government to utilize export subsidies to the fullest level allowed under our current WTO commitments.
  • NASDA opposes excluding a specific agricultural commodity or product from any trade agreement unless this exclusion is specifically at the request and benefit of the agricultural commodity producers or product manufacturers to be impacted.

Trade with Cuba

Current U.S. economic sanctions against Cuba allow for U.S. food and agricultural sales to Cuba but contain very challenging and specific licensing and financial provisions to which U.S. exporters must adhere. U.S. trade policy to Cuba is inconsistent with trade policy to other countries.

  • NASDA urges the Administration and the U.S. Congress to reexamine U.S. policy towards Cuba and lift the current embargo against Cuba. The U.S. should:
    • eliminate the “Cash Only” sales provision of the current law as well as extend trade to other areas besides food and medicine;
    • streamline laws and regulations related to visa and license requirements to better promote trade activities and
    • allow long term contracts, which will provide more efficiencies for both parties;
    • allow exchange of biotech research would have a benefit to both countries;
    • allow importation of Cuban products into the U.S. only on the condition that there are appropriate safe guards for our domestic markets, particularly for import-sensitive commodities;
    • hold Cuba to the same sanitary/phytosanitary standards as the rest of the world trading community; and
    • ease travel and tourism restrictions for both countries, or at the very least, allow plant and animal health officials, as well as food safety officials of both countries to travel to and from Cuba.
  •  NASDA urges the Administration and the various U.S. government agencies to interpret the Trade Sanctions Reform and Export Enhancement Act as broadly as possible, especially the financial terms so companies can compete with other countries in the global marketplace.

Trade with China

China is a growing market for U.S. agriculture and the third largest market for U.S. exports in recent years. Expansion of the Chinese market for U.S. products could be larger if more Chinese buyers could visit U.S. suppliers but too often U.S. visas are delayed or denied to prospective China buyers, resulting in lost sales and decreased U.S. competitiveness in the China market.

  • NASDA urges the Secretary of State to issue visas for temporary entry into the United States of Chinese nationals who demonstrate a full itinerary of purchasing activities.
  • NASDA urges the Administration to continue to seek changes in the way China values their currency to ensure domestic producers are not competitively disadvantaged due to currency manipulations.

Unilateral Sanctions

Unilateral sanctions that limit commercial, government-assisted, or humanitarian movement of agricultural products have proven to be ineffective mechanisms to further foreign policy and are disruptive to international food trade.

  • NASDA opposes any unilateral sanctions pertaining to agricultural exports.

Trade Promotion Authority

Under trade promotion authority, the President is able to negotiate trade agreements and submit them to Congress for a simple up or down vote. The Congress then has a limited time period in which to approve or reject the agreement without any amendments. Current fast track trade promotion authority expired in 2007.

  • NASDA supports reauthorizing trade negotiating authority for the Administration to allow flexibility for U.S. negotiators but include consideration for import-sensitive commodities.
  • NASDA supports the continuation of the position of the Office of Chief Agricultural Negotiator, an Ambassador level position, within the Office of the U.S. Trade Representative. 
  • NASDA urges the Agricultural Negotiator to ensure NASDA is included in stakeholder consultations during trade negotiations.
  • NASDA further encourages the Agricultural Negotiator to work closely with USDA’s Foreign Agricultural Service given their long history of promoting the sale and consumption of domestic agricultural products abroad.
  • NASDA strongly recommends that the United States Congress once again grant Trade Promotion Authority (TPA) for the President.

Harmonization of International Standards[1]

Sanitary or phytosanitary measures provide for the protection of animal and plant health and are contained in the WTO Agreement on Sanitary and Phytosanitary Measures (SPS Agreement). Non-sanitary or phytosanitary measures (e.g., certain labeling requirements) also affect international trade in food and agricultural products and are contained in the WTO Agreement on Technical Barriers to Trade (TBT).

Sanitary and Phytosanitary (SPS) Measures

The SPS Agreement requires countries to base health and safety measures affecting products in international trade on sound science and appropriate risk assessment. Despite the agreement, a number of WTO member countries continue to impose sanitary and phytosanitary measures which lack a sound scientific basis, which create significant barriers to market access abroad for U.S. agricultural products.

  • NASDA urges negotiators to actively seek trade remedies when the SPS Agreement is not being adhered to in accordance with trade agreements.
  • NASDA urges the U.S. government to make the elimination of unjustified non-tariff barriers characterized as SPS measures a priority and to take all appropriate actions, consistent with our international rights and obligations, to redress this problem.
  • NASDA urges the U.S. not to agree to reopen the SPS Agreement in either the current or any future WTO negotiations.
  • NASDA urges U.S. regulatory bodies to work on a multilateral or bilateral basis with other trading partners interested in increased harmonization of SPS measures to reach agreements that would permit trade, as appropriate, on the basis of mutual recognition, equivalence or reciprocal agreement on the adoption of international standards.

Technical Barriers to Trade (TBT)

NASDA is concerned that the TBT Agreement does not currently provide for greater international harmonization of standards, and does not contain the types of enforceable disciplines that would permit U.S. exporters to effectively challenges protectionist trade measures.

  • NASDA urges the U.S. government to pursue a stronger and clearer TBT Agreement in multilateral negotiations.

Genetically Modified Organisms (GMOs)

The movement of GMOs and other biotechnology products to the international market is constrained by the unwillingness of some foreign governments to accept these products. In addition, labeling of genetically modified products has been proposed by many foreign governments as a condition for accepting these products, potentially presenting an additional barrier to trade.

  • NASDA urges the federal government should work to ensure that the same sanitary and phytosanitary measures and standards are applied to genetically modified organisms in the international market place. Labeling of such products should conform to international standards and should not be construed in a way that acts as a barrier to trade.
  • NASDA supports global market access for genetically modified organisms in all WTO countries.

Highway Trade Corridors

The North American Free Trade Agreement contains provisions for national treatment of cross-border trucking. Differences in trucking standards between the three NAFTA countries have created inefficiencies and increased transportation costs borne by producers and shippers.

  • NASDA supports the implementation of the trucking provisions contained in NAFTA and the elimination of transportation system barriers, which will help to lower transportation costs for continental trade in agricultural products and enhance the competitiveness of North American exports to world market.
  • NASDA believes consideration should be given to harmonizing trucking standards among the three countries, including streamlining the obtainment of interstate and international trucking permits and establishing one-stop, joint vehicle inspection facilities.

Cargo Preference Laws/Jones Act

The Cargo Preference Laws require up to 75 percent of U.S. food aid shipments to be shipped on U.S. flag vessels, increase the cost of shipping food aid and reduce the quantity of food aid that can be made available to needy countries. The Jones Act requires all goods carried from one point in the United States to another to be carried on vessels built and repaired in the United States, owned by U.S. citizens, manned by U.S. citizen crews, and registered in the United States, creating a competitive disadvantage for American agriculture, as compared to our foreign counterparts.

  • NASDA supports repeal of the Cargo Preference Laws and the Jones Act.

State Trading Enterprises (STEs)

State trading enterprises can have the effect of distorting trade in the world market place. These enterprises can disrupt the market place if they become subsidized entities which enjoy monopoly buying authority.

  • NASDA believes the federal government should ensure that future trade agreements address trade distorting effects of state trading enterprises to end monopoly rights and exclusive import rights.
  • NASDA further believes the U.S. should require that activities of state trading enterprises be transparent and that the practice of subsidizing these enterprises be eliminated so as to remove price discrimination in the market place.

Perishable and Seasonal Commodities

When shipments of perishable and seasonal commodities, or live animals, get held up in a port of destination, due to SPS issues or other trade related disputes, a rapid resolution of the issue is critical to prevent deterioration of the perishable cargo.  Very few trade agreements include protocols for resolving these kinds of situations in the timely fashion that is needed to allow the quick release of perishable and seasonal commodities.

  • NASDA urges the Administration, when negotiating trade agreements, to include protocols that address the time sensitivity needed to move perishable and seasonal commodities, particularly related to dispute resolution.

Canadian Ministerial Exemption System

The Canadian system of ministerial exemptions, or “easements” that control the importation of U.S. produce, in particular potatoes, inhibits trade for U.S. producers and serves to protect Canadian producers from competition and supply from the United States.

NASDA urges the U.S. Trade Representative and the U.S. Department of Agriculture to include the ministerial exemption system on the agenda for bilateral trade negotiations, and seek its removal to facilitate agricultural trade between the United States and Canada.

[1] This section addresses the SPS agreement as it relates to trade. For NASDA policy on sanitary and phytosanitary measures please see Section 1 Animal Health and/or Section 2 Plant Health. 

6.3 Federal Domestic Policies Affecting Trade

Legislation that blocks the use of federal resources for the agricultural marketing and promotion of a United States grown agricultural product hurts our farmers. Congress should be encouraged to repeal legislation that blocks promotion of any legal agricultural products grown in the United States.

  • NASDA supports the promotion of international markets for American grown agricultural products and opposes legislative efforts that specifically exclude the ability to promote and market those products abroad.

Foreign Agriculture Service (FAS)

FAS provides valuable assistance to state departments of agriculture and agricultural producers of both bulk commodities and high valued food products in establishing and maintaining markets around the world and in promoting the sale and consumption of U.S. grown agricultural products through a variety of programs, including foreign market development, market promotion, outreach, direct credits and loan guarantees. 

  • NASDA supports FAS programs aimed at meeting the objective of expanding trade for agricultural products.
  • NASDA supports fully funding, at the authorized levels, both the Foreign Market Development (FMD or “Cooperator”) Program, which provides cost-share assistance to help boost U.S. agriculture exports and the Market Access Program (MAP), which helps U.S. agricultural producers, exporters, private companies and other organizations finance promotional activities overseas.

Market Access Program (MAP)

The Market Access Program authorizes funding to support partial reimbursement to private companies for qualified overseas brand promotion of U.S. agricultural products.   The policy rationale is that the promotion of brands containing U.S. agricultural products helps to boost exports of U.S. products. 

  • NASDA supports the objectives of the MAP and believes the federal government and the Congress should support this critical resource for agricultural producers and promote an equitable international market place for agricultural products.

Export Financing & Credit Guarantees

Programs have been designed to increase or maintain U.S. agricultural exports by having a federal agency act as the guarantor of financing for sales of U.S. agricultural commodities in foreign markets. NASDA believes that export financing and credit guarantee like GSM 102 and 103 programs are important resources for agricultural producers entering the foreign market place.

  • NASDA supports the expansion of these programs to cover transportation costs from the U.S. border to export destinations.

Export Enhancement Program

The Export Enhancement Program (EEP) and similar policies became necessary because U.S. exporters faced unfair and highly subsidized competition from the European Union. Current U.S trade policy favors the elimination of export subsidies and the United States has put forth an ambitious proposal in the current round of multilateral trade negotiations to eliminate export subsidies completely with reductions phased in over a five-year period in equal annual increments.

  • NASDA supports export subsidy elimination in multilateral agreements if the implementing legislation for that agreement allows up to 50 percent of unused EEP funds to be used for related market development and promotion activities.
  • NASDA’s support for the elimination of the EEP and similar programs is contingent upon a world-wide commitment to end export subsidy practices.

NASDA supports the promotion of international markets for American grown agricultural products and opposes legislative efforts that specifically exclude the ability to promote and market those products abroad.

6.4 International Food Aid

International food aid program budgets have been reduced over the years due to fiscal constraints.

  • NASDA supports continued US efforts to provide humanitarian assistance in the form of food.

6.5 The Global Economy

Global economic conditions impact the value and volume of trade. It is in the United States’ interest to promote and ensure a financially stable global marketplace so that trade between nations is not disrupted.

  • NASDA supports efforts to promote and improve economic and financial stability in the global marketplace.

6.6 Country of Origin Labeling

(Updated September 2013)

Existing Federal law requires most imports, including many food items to bear labels informing the ultimate purchaser of their country of origin. There is value in policy that allows for differentiation of product in this manner, offering American consumers important Country of Origin Labeling (COOL) information as they make purchases within the U.S. retail food supply.

There is equal value in assuring that COOL policy be implemented in a manner that ensures the United States is able to maintain its obligations under negotiated regional and international trade agreements and does not prompt retaliatory trade actions against U.S. agricultural products.

6.7 Dispute Resolution

Under current U.S. law, the federal government has certain legal means and remedies in place to address concerns with agricultural trade. A special rapid dispute resolution mechanism should be established for use specific to perishable commodities.

  • NASDA supports federal laws and rules designed to resolve agriculture trade issues and encourage their use by the USTR to ensure our domestic producers are not competitively disadvantaged by unfair trade practices.

6.8 Monetary Valuation and Exchange Rates

NASDA supports the establishment of international monitoring tools to address possible trade-distorting manipulation of monetary valuation and exchange rates.

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