Soybeans were historically the largest US agricultural export to China, totalling about 32m tonnes in 2017 © AP

Soybeans were historically the largest US agricultural export to China, totalling about 32m tonnes in 2017 © AP

Agricultural Trade

On September 1st, the United States Trade Representative (USTR), along with the Department of Agriculture, and the Department of Commerce, released a report outlining the Trump Administration’s plan to address the threat posed by increased imports to American producers of seasonal and perishable fruits and vegetables. According to the plan:

  • USTR will request the International Trade Commission to initiate a Section 201 global safeguard investigation into the extent to which increased imports of blueberries have caused serious injury to domestic blueberry growers.
  • USTR will pursue senior-level government-to-government discussions with Mexico over the next 90 days to address U.S. industry concerns regarding U.S. imports of Mexican strawberries, bell peppers, and other seasonal and perishable products.
  • USTR will work with domestic producers to commence an investigation by the International Trade Commission to monitor and investigate imports of strawberries and bell peppers, which could enable an expedited Section 201 global safeguard investigation later this year.
  • The Department of Commerce will:
    • establish an outreach program to connect with Southeastern and other growers of seasonal and perishable fruits and vegetables, to enhance understanding of applicable trade remedy laws and processes; and
    • establish a formal channel for stakeholders to provide information related to unfair subsidies for foreign producers and exporters of seasonal and perishable fruits and vegetables, including those in Mexico – building on ongoing efforts to partner with U.S. industry to identify such subsidies.
  • The Department of Agriculture will:
    • increase targeted outreach to producers of seasonal and perishable fruits and vegetables to maximize the use of existing Department of Agriculture programs; and
    • develop a market promotion strategy for domestically produced produce; and
    • initiate conversations with relevant federal partners to better understand the extent to which imports of seasonal and perishable products are utilized to enable criminal activity.
  • USTR, the Department of Commerce, and the Department of Agriculture will establish an interagency working group to monitor seasonal and perishable fruit and vegetable products, coordinate as appropriate regarding future investigations and trade actions, and provide technical assistance to Members of Congress in developing legislation on this issue.

The USTR’s 201 investigation on blueberries and bell peppers imports appears politically motivated and in violation of the Trump Administration’s United States-Mexico-Canada (USMCA) Trade Agreement that went into force July 1st. The International Trade Commission conducts a 201 Investigation on behalf of a U.S. company, trade association, or union to obtain import relief, essentially a type of trade barrier to protect domestic industries that Article XIX of the General Agreement on Tariffs and Trade 1994 broadly accepts.

The Fresh Produce Association of the Americas (FPAA) claims the 201 investigation is politically motivated because such a trade barrier benefits Florida and Georgia growers, states key for President Trump 2020 reelection. The FPAA claims this safeguard action will likely see increased food costs and lower farm exports detrimental to American consumers and businesses.

Beyond the implications of the U.S. being an unreliable trading partner to Mexico after years of renegotiating NAFTA, USMCA itself prohibits such safeguard actions. Per Article 10.2: Rights and Obligations, A safeguard action must exclude a USMCA member state unless imports from the said state are “considered individually, account for a substantial share of the total imports” of the product at issue and that such imports, again “considered individually,” “contribute importantly to the serious injury, or threat thereof, caused by the imports.” The 201 Investigation may be merely a means by the Trump Administration to secure Florida and Georiga growers’ political support. Such self-serving actions will likely make other US trade partners even warier of future negotiations with the U.S.  

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