Major Agricultural Trade Issues in the 117th Congress

Sales of U.S. agricultural products to foreign markets absorb about one-fifth of U.S. agricultural production, contributing significantly to the health of the farm economy. Farm product exports, which totaled $136 billion in FY2020, make up about 8% of total U.S. exports. The United States has persistently run a trade surplus in agricultural products, although it has declined over time. A major area of interest for the 116th Congress was the loss of foreign demand for U.S. agricultural exports in the wake of tariff increases imposed by the Trump Administration on U.S. imports of steel and aluminum from certain countries and on other imported products from China. Some of the affected countries levied retaliatory tariffs on U.S. agricultural products, contributing to a 53% decline in the value of U.S. agricultural exports to China in 2018 and a broader decline in exports in 2019. To mitigate the economic impact from export losses and from the transportation and supply chain disruptions caused by the Coronavirus Disease 2019 (COVID-19) pandemic, the U.S. government initiated several large ad hoc spending programs from 2018 through 2020, valued at up to $60.4 billion. However, these programs may violate U.S. commitments to the World Trade Organization (WTO) to reduce trade-distorting agricultural subsidies. The 117th Congress may consider other options to assist the U.S. farm sector in the face of higher foreign tariffs on its exports or if other unforeseen events contribute to declines in farm sales. Since 2019, the United States has signed three agreements affecting agricultural trade with major trading partners: the U.S.-Mexico-Canada Agreement (USMCA), which expanded access for U.S. exports of dairy and most poultry products to Canada and for Canadian peanut butter, dairy, and sugar exports to the United States; the “Stage One” agreement with Japan, which reduces tariffs on meat and other U.S. agricultural exports; and the “Phase One” agreement with China, under which that country agreed to purchase an additional $32 billion of U.S. agricultural products over a two-year period and to reduce various technical barriers to trade. The two latter agreements were negotiated under procedures that did not require congressional approval. The 117th Congress may monitor the implementation of all three agreements and assess their impact on the U.S. agricultural sector. The Biden Administration may also advance proposals for the United States to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, an 11-country pact that could address additional U.S. agricultural interests in Asian markets, and to engage in additional talks to improve market access for U.S. agricultural products in China. In addition to further negotiations with Japan and China, the 117th Congress may weigh in on trade negotiations initiated with the European Union (EU), the United Kingdom (UK), India, Kenya, other countries, and the WTO. The COVID-19 pandemic slowed down the ongoing efforts to reform the WTO. The WTO Ministerial Conference that was postponed from June 2020 to late 2021 presents an opportunity to address pressing concerns over agricultural reform efforts. Other trade issues that may arise in the 117th Congress concern various nontariff trade barriers, seasonal produce, and foreign restrictions on U.S. meat and dairy products. Improving market access for agricultural biotechnology products has long been a U.S. trade priority, and U.S. goals include establishing a common framework among trading partners for approval, adoption, and labeling of such products. With mandatory labeling of bioengineered food products offered for sale in the United States to begin in January 2022, the 117th Congress may engage with the Biden Administration’s trade negotiation efforts to ensure that U.S. adoption of this labeling requirement contributes to harmonization of such standards with bilateral partners and at the multilateral level. As Congress continues to monitor the impact of COVID-19, it may consider the extent to which health and regulatory measures associated with the actions of trading partners to limit the spread of COVID-19 may affect trade. Many WTO members have requested that the planned 2021 conference of trade ministers review the WTO’s Sanitary and Phytosanitary (SPS) Agreement in the wake of the COVID-19 pandemic, and Congress could seek to guide U.S. proposals on this subject.