By Max Fisher, Vice President, Economics and Government Relations
The NGFA and the North American Export Grain Association (NAEGA) today (Nov. 6) submitted a joint statement to the U.S. International Trade Commission (ITC) touting the benefits of trade to the U.S. agricultural sector and noting that consummation of beneficial trade accords is highly dependent upon Congress granting renewal of the president’s trade promotion authority (TPA) to negotiate such agreements.
ITC, as required by law, currently is carrying out an investigation of the economic impact of trade agreements negotiated and implanted under trade authority procedures. TPA is the time-limited authority that Congress uses to set trade negotiating objectives, establish notification and consultation requirements, and consider implementing legislation to approve certain reciprocal trade agreements under expedited procedures, provided that they meet certain statutory requirements.
Current TPA expires on July 2, 2021, and the Congressional Research Service reports that before reauthorizing it, Congress may seek to influence the size and scope of future trade agreements that may come before it under TPA. Congress also may signal its preference for bilateral, regional, or multilateral negotiations through TPA legislation, or it can favor broad-based or sector-specific agreements. It also may scrutinize the president’s use of tariff proclamation authority as well as the negotiation of trade-related agreements that do not require changes to U.S. law.
In their joint statement to ITC, NGFA and NAEGA emphasized that much of U.S. agriculture and the grain, feed, processing and export industry’s value to the U.S. economy and job creation is attributable to the market access provided through trade agreements. The balance of trade surplus for U.S. feed and grain products [corn, distiller’s dried grains with solubles (DDGS), soybeans, soybean meal, wheat, feeds and fodders, grain sorghum, barley, soybean oil, ethanol, biodiesel and pulse crops] increased from $4 billion with trade agreement counterparts in 1984 to $16.2 billion in 2019, in large part attributable to increased market access resulting from such accords, NGFA and NAEGA noted.
The joint statement noted that the benefits of U.S. agricultural trade are not limited to farmers, ranchers, grain elevators, feed manufacturers, feed ingredient suppliers, grain and food processors, livestock, poultry and dairy operators, and the many other agricultural businesses whose livelihoods depend extensively on access to foreign markets. Indeed, the economic multipliers associated with the U.S. food and agricultural sector accrue to the broader U.S. economy, particularly in terms of job creation and economic growth. According to data provided by the U.S. Department of Commerce, as well as analysis conducted by the U.S. Department of Agriculture, the food and agricultural sector contributes $1.1 trillion to the U.S. gross domestic product – a 5.2-percent share – and supports more than 22 million full- and part-time U.S. jobs – constituting 11 percent of total U.S. employment. Every dollar in U.S. agricultural exports generates an additional $1.17 in U.S. economic activity.
NGFA and NAEGA wrote that grain and feed trade with U.S. trade agreement counterparts is vibrant. Ratification of trade agreements has led to the elimination of many grain and feed tariff barriers that previously restricted U.S. access to these markets and in many cases has either leveled the playing field or provided the United States with a competitive advantage over foreign competitors. Further, the existence of trade agreements and subsequent efforts to address sanitary and phytosanitary impediments and encourage regulatory cooperation also have assisted in addressing non-tariff barriers to trade. As a result, U.S. trade agreement counterparts have become large and reliable export markets for U.S. agricultural products, NGFA and NAEGA noted.
Finally, the joint statement urged Congress to reauthorize trade promotion authority, with appropriate consultation with the U.S. Trade Representative’s Office, to enable the United States to initiate new, or continue ongoing, negotiations with other trading partners to consummate new trade agreements that reduce tariff barriers and remove non-tariff barriers to trade. “As has been demonstrated repeatedly, other countries are reluctant to negotiate and come to agreement on trade accords with the United States if those agreements can be undone or modified significantly by Congress after-the-fact,” NGFA and NAEGA wrote.