Ag Policy Blog

OMAHA (DTN) – More than two years into the Biden administration, the country's top trade negotiators have no negotiations going on with any country to reduce tariffs for U.S. products.

That was perhaps the biggest point highlighted by U.S. Ambassador Katherine Tai's testimony Thursday before a contentious hearing at the Senate Finance Committee on Thursday.

Both Democrats and Republicans criticized Tai at the Senate hearing on agricultural issues and the lack of any moves to negotiate trade agreements.

Tai indicated USTR is holding "robust discussions" with Kenya, the United Kingdom and possibly Ukraine. Still, when asked about efforts to reduce tariffs for U.S. products overseas, Tai said the U.S. right now is not focusing on expanded market access or tariff reduction.

"At the moment, we do not have tariff liberalization going on with a partner." She added, "However, I want to indicate to you that I reman open-minded that when it is fit with a partner and a time, we are happy to do the right thing by the U.S. economy."

Tai instead said the U.S. is putting its stock into the Indo-Pacific Economic Framework (IPEF), which held its second round of talks last week in Bali, Indonesia. Those talks, however, don't address any tariff barriers though the news release from USTR did briefly mention agriculture as one of the issues.

The IPEF, however, even if a deal is reached, wouldn't have the enforcement of a trade deal because it would not go to a vote before Congress.

Senators from both parties made it clear they didn't see an effective trade strategy from the administration.

"I have real concerns that USTR isn't doing enough to break down barriers our exporters face," said Senate Finance Committee Chairman Ron Wyden, D-Ore. "For example, there's old red tape preventing Eastern Oregon potato farmers from shipping fresh potatoes into Japan. That's an estimated $150 million market.

"Pacific Northwest apples and pears are blocked from the behemoth Australian market. Oregon wheat -- upwards of 90% of which is exported -- suffers from high tariffs in markets around the Pacific Rim. Vietnam has a litany of restrictive digital practices that hurt Oregon start-ups.

"The administration should be taking every opportunity to fix these issues -- but it isn't clear USTR is even discussing them as part of its Indo-Pacific Framework," Wyden said.

"I'll draw a line here -- the U.S. cannot conclude agreements with Japan, Indonesia, or the EU that leave issues facing our exporters unaddressed."

Sen. Mike Crapo, R-Idaho, the ranking member of the committee, added that the administration's "trade negotiations and enforcement agenda is strikingly limited,"

Crapo added, "American ranchers and farmers produce the world's best and safest food, and exported $196 billion in 2022," Crapo said. "They can accomplish even more if we eliminate the high tariffs and unscientific restrictions posing as safety measures."

"The only tariff reduction flagged in the president's agenda is that India will reduce its tariff on pecans to a still overly-restrictive 30%. Instead of aggressively challenging non-science-based safety measures, the administration has only this month initiated 'technical consultations' on Mexico's biotech restrictions."

Crapo also pointed out the Biden administration's moves so far on the Indo-Pacific Framework offer no enforcement mechanisms either.

Sen. Chuck Grassley, R-Iowa, raised concerns over the state of talks with Mexico over biotech corn. Grassley said he was glad that USTR had started technical consultations, though it was two years after Mexico first set its decree to ban imports of biotech corn. "This seems to be an easy one and exactly what we included in the dispute resolution process with USMCA," Grassley said. He added, "And Mexico being the No. 1 purchaser of U.S. corn, farmers deserve a sense of urgency from your administration on this."

Grassley pushed Tai to move ahead with a dispute resolution case against Mexico on April 7 when the consultation process is supposed to end.

Sen. John Thune, R-S.D., noted USTR continued to push the Indo-Pacific Framework "presumably to reinforce America's presence int eh region and offering an alternative to China's influence. The problem is IPEF doesn't do much of either." Thune added, "South Dakota farmers and ranchers and all American businesses simply won't see a level playing field without market access, enforceable commitments and binding approval from Congress."

Thune added, "Meanwhile, China is aggressively pressing forward a trade agenda whether its in the Asia Pacific, Africa, Latin America, or earlier this week, reaffirming economic ties with Russia, which again entails a lot of broader significance."

Tai later came under criticism from Sen. Ben Carden, D-Md., for failing to push for Trade Promotion Authority.

Senators also challenged the lack of transparency in the IPEF talks. Sen. Elizabeth Warren, D-Mass., noted senators and their staff can see some details, but USTR is sharing information with tech companies about the talks, but not the overall public. Warren noted the text of the agreement is classified.

"I can't even talk with you right now about it in this hearing any of the specific issues in the text," Warren said. "That means the American public cant know what's in the text. But just last week, U.S. negotiators were in Bali discussing exactly this text with representatives from foreign countries. Who else got access to the text? So-called non-governmental advisors, which includes Amazon and Google lobbyists. Ambassador Tai, that's just not right. This text should be public."

Tai also testifies Friday before the House Ways and Means Committee Friday. She is expected to deliver much the same testimony that she provided at the Senate Finance Committee hearing.

Video from Senate Finance Committee hearing: https://www.finance.senate.gov/…

House Ways & Means Committee https://waysandmeans.house.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

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