OMAHA (DTN) -- Agricultural groups are becoming impatient with the Biden administration's slow approach on trade, and there is growing concern that the U.S. is falling behind trade competitors when it comes to cutting new deals.
Right now, there are no new trade deals getting lined up for agriculture or other industries. The purchase demands for the U.S.-China Phase One Agreement also expire Dec. 31 with no clear pathway to extend or renew it.
Still, U.S. agriculture is coming off fiscal year 2021 with record farm exports of $173.5 billion, nearly $17 billion higher than 2014's sales, which had been the record year. USDA projects even higher exports in FY 2022 at $177.5 billion.
U.S. LOSING GROUND
Farmers for Free Trade released an analysis Tuesday compiled by the Corn Refiners Association showing the U.S. is "lagging behind competitors in reducing global trade barriers." Since 2010, other countries and trading blocs have been far more willing to negotiate new bilateral and multilateral trade deals than the U.S., according to the analysis.
"America cannot compete if we are not in the game," Steve Noah, an Iowa farmer and president of Farmers for Free Trade, said at the start of an online forum on Tuesday.
Going back to 2010, China has cut 10 trade deals, while the European Union and Canada have each negotiated eight trade deals. Japan has entered into seven trade deals. The U.S. has done four trade deals -- Columbia, Peru, South Korea and the U.S.-Mexico-Canada Agreement, though USMCA was more of an update of the old NAFTA deal with the U.S.' neighbors.
That means other countries -- the U.S.' trading rivals -- "will define the path of global trade rules, standards and practices." But when the U.S. leads, then the U.S. is in position to set the rules for trade.
"When the U.S. engages and pursues market access through bilateral and multilateral trade agreements, it demonstrates global leadership and ensures that the United States leads the way on setting global trade rules," the trade report concludes.
It also means more money. Through those trade deals, the EU lowered tariffs and reduced trade barriers on $553 billion in total trade. China did the same for $420 billion in total trade. That compares to $171 billion in total trade for the U.S. from lowering tariffs and barriers in its trade deals.
Those other countries right now also have a lot more on the table when it comes to possible new trade deals.
John Bode, president of the Corn Refiners Association, said its study was simply to compare trade deals reached by major economies over the past decade, though it spanned multiple administrations. Bode said there is concern with the Biden administration's current focus on enforcement without any moves to reach new trade deals. The administration also remains lukewarm to rejoining the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) for an undefined agenda in Indochina. Without new trade deals, the U.S. loses investment and markets. Other people set the agenda for what's important, and that eventually undermines what the Biden administration may want to do on key issues such as labor and the environment, Bode said.
"For anyone who cares about the environment, workers' rights or even world peace, U.S. economic influence is also substantially reduced," Bode said. "So, we are falling significantly behind, while our competitors are picking up momentum. We're slowing down, and this is a game where it takes a long time to score."
CPTPP OR EVERYWHERE IN BETWEEN
Rep. Jim Costa, D-Calif., noted in the forum that his home state exports about 44% of all its agricultural products. Trade policy has been complicated over the past two decades, Costa said, because of no consensus or continuity going from one presidential administration to the next. Costa said he liked the idea of the 13-country Trans-Pacific Partnership started under Presidents George W. Bush and Barack Obama but abandoned by President Donald Trump. China is an adversary, he said, and a competitor, "but also a vast market for U.S. goods, and obviously a source of products that American consumers like to consume."
Costa said he would like to see the U.S. reengage with the countries that became part of the CPTPP.
"That's an important opportunity, and I think we need to explore whether or not we can reengage there," Costa said.
John Beghin, a professor of international trade at the University of Nebraska Department of Agricultural Economics, said it should be "a no-brainer" for the U.S. to get back into the CPTPP and added there is "broad consensus" there. Beghin also said there ought to be a "phase two" deal with China.
Representatives from groups leading agricultural commodity exports in meat, dairy and grains also all wanted strategies from the Biden administration to move forward in Asia or other markets. They mentioned the possibility of bilateral deals with Indonesia, Philippines, Vietnam, the United Kingdom and Kenya that could be pursued.
"The thing for me is doing something today," said Manuel Sanchez, who formerly oversaw southeast Asia for the U.S. Grains Council but is moving into a new role focusing on China. "We need to start. The more there are delays, the farther behind we start."
Sanchez said that in his time working with Vietnam, grain exports were hindered while the country saw its corn imports grow almost tenfold. He and others pointed to problems with non-tariff barriers such as sanitary and phytosanitary issues that are often dealt with in free-trade agreements.
"These are used on a daily basis to keep our commodities out of markets," Sanchez said.
TAI'S ATTENTION: LEVERAGING STEEL AND ALUMINUM
U.S. Trade Ambassador Katherine Tai allowed Trade Promotion Authority to expire last June without much resistance. Tai has declined to move on trade talks with countries that had started trade negotiations with the Trump administration -- Japan, the United Kingdom and Kenya, for instance. Instead, Tai's focus over the past few months has been to negotiate rollbacks of former President Donald Trump's steel and aluminum tariffs. It began with the U.S. and European Union in October with the U.S. suspending the 25% tariffs on steel and 10% tariff on aluminum from the EU as well. In return, the EU rolled back retaliatory duties, and the two countries agreed to reduce the carbon intensity of their steel and aluminum industries.
After meeting with Japanese officials in November, there again was no talk of resuming a trade deal. Bloomberg reported on Tuesday that Tai is offering Japan's government a deal to end tariffs on steel and aluminum.
Last week, the United Kingdom's trade secretary also met with Tai to talk about former President Trump's steel and aluminum tariffs and possibly to restart trade talks. Tai did not commit to advancing talks on a trade deal, but Tai stated the two countries agreed to work together on China and World Trade Organization topics. Tai indicated that then there might be a path forward for the U.S. over the steel and aluminum situation with the UK.
Tai stated in a news release on the U.S.-UK meeting that the U.S. was committed "to working with like-minded partners to address non-market capacity in the steel and aluminum sectors, ensure the industry's long-term viability, and addressing carbon intensity of steel and aluminum production."
Tai also met with Kenya's cabinet secretary for industry and trade last week. The news release mentions "both ministers expressed views on how to progress the trade and economic relationship between Kenya and the United States." The statement didn't offer any timelines or signal any movement suggesting further trade talks.
ELECTRIC VEHICLES AND AG EXPORTS
Costa also raised concerns that Canada and Mexico could retaliate against U.S. agricultural exports over the way a tax credit for electric vehicles plays out in the Build Back Better bill. The tax credit gives buyers of electric vehicles up to $12,500 for buying an electric car that is built in the U.S. by union labor. Canadian and Mexican officials say the provision is a threat to their industries and could violate the U.S.-Mexico-Canada Agreement. Costa noted Mexico is a $1.4 billion market for cheese from California. Others noted the possible retaliatory risk there as well.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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