Washington Insider-- Wednesday

Mexico to Allow US Organic Products in Through 2021

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

COOL On List Of Issues NCBA Raised With USTR Tai

National Cattlemen's Beef Association CEO Colin Woodall met with U.S. Trade Representative Katherine Tai on Friday (May 7) to "discuss ways to resolve issues surrounding country of origin labeling and agriculture's contributions to meeting the administration's sustainability and environmental goals," according to a readout of the virtual meeting released by the Tai's office.

Tai also "committed to monitoring Chinese compliance with the structural commitments of the U.S.-China Economic and Trade Agreement," and the two agreed to continue a dialogue in the future.

The issue of country of origin labeling (COOL) has continued to be talked about as the Biden administration has begun its work, something that observers in Canada and Mexico have been following closely. The U.S. removed mandatory COOL from law after losing a case at the WTO and Canada still has the authority to impose $1 billion in retaliation should mandatory COOL be brought back in.

CFAP 2 Payouts Rise Slightly in Latest Week

Payments under the Coronavirus Food Assistance Program 2 (CFAP 2) increased to $13.59 billion as of May 9, up from $13.55 billion the prior week. Totals include $6.25 billion in acreage-based payments, $3.44 billion for livestock, $2.63 billion for sales commodities, $1.21 billion for dairy and $58.31 million for eggs/broilers.

Payments under CFAP 1 payments were little changed at $10.57 billion.

There still is little information available about payments under the CFAP Additional Assistance effort even though USDA has said they are processing payments for "certain applications" filed under that effort.

Washington Insider: Mexico to Allow US Organic Products in Through 2021

Trade issues between the U.S. and Mexico have emerged the past week, with the AFL-CIO filing a case under the U.S.-Mexico-Canada Agreement (USMCA) on what they say are labor abuses by an auto-parts factory in Mexico.

The U.S. has also pushed Mexico to remove its restrictions on imports of U.S. potatoes, but that dispute remains in the hands of the Mexican court system. That one is expected to result in Mexico allowing in U.S. potatoes, but so far that resolution has not yet been put in place.

But there has been some action on the part of Mexico that will at least temporarily remove some uncertainty on the trade front in Mexico agreeing to extend an allowance for U.S. organic products to come into Mexico.

Mexico put in place its Organic Products Law which would require all organic products sold in Mexico to be certified under Mexican organic standards. Or the rules also would allow those products to be sold if they came from a country where Mexico deems the standards to be equivalent of their rules.

Organic products from Mexico have to be certified under USDA organic regulations, with around 24 accredited certifiers in Mexico and more than 1,600 operations in Mexico that have been deemed USDA certified.

But therein lies the rub. U.S. products that are USDA certified can be exported into Mexico, but the two sides have not yet reached agreement on whether that USDA certification meets the standards laid out in Mexico.

The two sides have been working on that issue for quite some time. According to USDA's Agriculture Marketing Service, "The U.S. and Mexico hope to sign an arrangement to allow USDA-certified product to continue to be sold in Mexico under organic equivalency arrangement."

Mexico has put in place a deadline of June 26, 2021, for U.S. products to be certified under its organics law (LPO). Mexico held a seminar on the matter last month.

But USDA on Tuesday announced that Mexico has agreed to let those USDA certified organic products enter the country through Dec. 31.

"I am pleased to report that on May 7, 2021, Mexico's Secretariat of Agriculture and Rural Development (SADER) extended the deadline for U.S. organic exports to be certified to its Organic Products Law (LPO)." USDA Secretary Tom Vilsack announced. "This is a request that I made directly to Mexico's Secretary of Agriculture and Rural Development Victor Villalobos and am grateful that he extended the compliance deadline to Dec. 31, 2021." The U.S. will continue its efforts work with U.S. organic exporters to assist in transitioning to LPO compliance, Vilsack said, "and will continue to provide updates as necessary."

In 2017, U.S. exports of selected organic products to Mexico totaled more than $133 million, while U.S. organic imports from Mexico during that same time topped $278 million.

The USDA and Mexico's National Service for Animal and Plant Health, Food Safety and Quality (SENASICA) are evaluating each other's systems to determine whether an organic equivalency arrangement could be established between the U.S. and Mexico.

While pushing back the deadline is certainly welcome, it still does not resolve the issue that the Mexican regulations could pose. And it underscores that even close trading partners like the U.S. and Mexico do not always see eye to eye on trade and regulatory matters.

So we will see. Clearly for organic products this is at least provides some breathing room. And it provides still-more time for the two sides to work out some kind of agreement. But moving the deadline back still does not resolve the issues, nor does the situation address other trade matters between the two sides on ag products. These are developments that producers beyond organic growers should monitor closely, Washington Insider believes.

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