WITH the Obama Administration actively negotiating new free trade agreements with Asia and Europe, a Senate Finance Committee hearing recently examined the effectiveness of enforcing any new agreements as well as the trade agreements the U.S. already has on the books.
When committee chairman Ron Wyden (D., Ore.) joined the Senate in 1996, the U.S. had only three free trade agreements; it now has 20 and is negotiating more, making the enforcement job both bigger and more important. As foreign companies and governments find new and complex ways to skirt trade rules, Wyden said enforcement can't fall short for the agreements already in place.
"Without strong enforcement, no trade deal — old or new — is able to live up to its potential for jobs and economic growth, and it becomes extraordinarily difficult to build support for new agreements," Wyden said in his opening comments. "Foreign nations will continue locking American goods and services out of their markets, and foreign companies that get unfair backing from their own governments will continue undercutting our manufacturers, farmers and ranchers, driving hard-working Americans out of business and out of their jobs."
Wyden said it's important that Congress and the Administration work together to create trade promotion authority legislation that helps enforce the completed deals as well as "build credibility for future trade challenges."
For the agriculture industry, National Chicken Council adviser Kevin Brosch and American Soybean Assn. (ASA) treasurer Richard Wilkins both testified about the ongoing trade concerns that exist for U.S. producers.
Brosch said it's important for the U.S. to press forward with the rights provided today, especially as the World Trade Organization has been shown to be a successful place to challenge sanitary and phytosanitary issues. Recent cases the U.S. has won against the European Union over hormones in beef and against Australia over salmon shows that the U.S. can prevail.
Using examples of cases in Mexico, the EU and South Africa, Brosch said the first lesson is "that enforcement of trade agreements must become more automatic and timely."
For example, the U.S.'s case against Mexico was instituted nearly two years ago, after an antidumping case was brought on the dubious "weight-based cost of production" theory. Brosch said, at present, there is still no panel to hear the case.
"We believe there is a significant problem here of enforcement that needs to be addressed," he said.
The U.S. poultry industry has asked for a dispute settlement with the EU as it said there was no scientific basis for the EU's trade barriers on imports of U.S. poultry, which began in 1996.
Brosch explained that, for reasons that have never been explained, the U.S. and EU have taken no actions to form a panel over the past four years, and there is no indication that the U.S. government is pursuing enforcement of the case at present. He said the industry would like to see that case brought forward and pursued.
During the hearing, Sen. John Thune (R., S.D.) said it's vitally important to break down trade barriers, especially when it comes to biotechnology. He said these artificial barriers — such as those put up in the EU and China — make it increasingly difficult for the U.S. to grow more food and get it to the people around the world who need it.
Wilkins testified on the need for a more consistent regulatory framework in various trade partners, citing specifically the inconsistent and unreliable frameworks in China and the EU.
"Other countries have adopted systems for approving biotech traits, but these decisions are subject to differing regulations or are overtly political, which can result in lengthy delays between approvals in importing and exporting countries," he testified. "This is a concern because, until an importer approves a new trait, even a trace amount of that trait detected in a cargo can result in its rejection and major losses for the shipper."
Wilkins pointed out that ASA has advocated for a global low-level presence policy to tackle this challenge that "would allow a shipment containing a small amount of an exporting country's approved trait without resulting in rejection by an importer."
The U.S. value chain has been a global leader in biotech advocacy for many years. ASA and 14 other major national trade associations have joined together as the U.S. Biotech Crops Alliance, which is working toward a consensus on how to address asynchrony in international biotech regulatory approvals.
The group is asking the Administration to "make trade in biotech commodities and products a top trade policy priority, to engage other governments on biotech trade issues at the highest level and to ensure that our trading partners honor their obligations under international trade rules," Wilkins testified.
He added that the alliance hopes that removing barriers to trade through negotiation could help resolve problems without resorting to litigation.