Switching gears from renegotiating previous trade agreements to looking for new trade deals, the U.S. Trade Representative (USTR) officially gave notice to Congress Oct. 16 of its intent to negotiate separate trade agreements with Japan, the European Union and the U.K.

In a one-on-one conversation with U.S. Department of Agriculture undersecretary for trade Ted McKinney, he expressed optimism in the more wholesale turn of getting more offensive in the Administration’s approach to trade. McKinney said his staff at USDA works regularly with USTR and chief agricultural negotiator Gregg Doud, and USTR’s targeted countries aligns nearly perfectly with those USDA sees as offering potential to grow a relationship of two-way trade for agriculture.

McKinney said, “Japan is clearly No. 1,” on the list of countries where increased trade could benefit agricultural producers.

In the letter to Congress, USTR identified Japan as the fourth largest export market for U.S. agriculture products in 2017, totaling $12 billion. Despite these significant trade volumes, U.S. exporters in key sectors, including agriculture, “have been challenged by multiple tariff and non-tariff barriers for decades, leading to chronic trade imbalances with Japan,” USTR told Congress. Trade deficit in goods with Japan was $68.9 billion in 2017, virtually unchanged from the previous year.

Related:Japan, U.S. launch trade talks

McKinney said an agreement with the EU and U.S. would bring together two of the largest trading blocs in the world, but it will be a heavy lift with “so, so many differences emotionally in the non-tariff area and the regulatory area,” he explained.

The trade deficit in goods with the EU was $151.4 billion in 2017; however, $1.1 trillion in annual two-way trade is realized between the two.

While the U.K. is not able to negotiate trade agreements until it has formally left the EU on March 29, 2019, USTR intends to begin negotiations with the U.K. as soon as it is ready after it exits the EU.  

McKinney said one of the reasons the U.K. voted to exit the EU was to get out from the “choking regulations of Brussels (Belgium, the EU capital) that have affected not just us but so many others.” He added he was “excited about diving in deeper at the right time, and that looks like at the earliest March 2019.”

The National Pork Producers Council (NPPC) welcomed the momentum shift in the right direction on trade discussions, particularly with Japan. NPPC also has been supportive of trade negotiations with the U.K., provided that the U.K. is willing to eliminate all non-tariff barriers and embrace U.N. food-safety standards and other international standards.

“NPPC will not support a deal with the U.K. unless it agrees to equivalence, meaning that all USDA-approved pork and pork products must be eligible for export to the U.K. without additional requirements,” NPPC president Jim Heimerl, a pork producer from Johnstown, Ohio, said.

While the organization is open to trade negotiations with the U.K., it is skeptical about EU intentions.

The American Feed Industry Assn. (AFIA) said it remains hopeful of the potential with the future trade agreements. AFIA said Japan represents the United States’ third largest export market for animal food with over $879 million in goods exported in 2017. Exports to the EU are negligible, due to the burdensome and onerous restrictions and hurdles the industry faces in this market. With the U.K. leaving the EU in 2019, the future of the United States’ trading relationship with the country remains uncertain. However, by eliminating existing barriers and leveling the playing field, the separate trade agreements with Japan, the U.K. and the EU would allow America’s animal food and ingredient manufacturers greater access into these markets.

Gina Tumbarello, AFIA’s director of international policy and trade, said, "Trade agreements such as the ones the Trump administration is looking to negotiate with Japan, the EU and the U.K. must be comprehensive, developed in a single undertaking, seek to remove all unjustified non-tariff barriers and be based on science." 

“The EU has played the United States like a drum in the past,” said Heimerl. “This must stop. We expect the Trump Administration to require the EU to eliminate all tariff and non-tariff barriers to U.S. pork so we can export with no additional requirements.”

The American Soybean Association (ASA) has consistently requested a negotiated solution to the trade war with China and urged that exports lost to this key market be offset through new free trade agreements. "ASA is hopeful that the Administration’s formal notice to Congress that it will enter trade negotiations with the European Union, Japan and the United Kingdom as soon as mid-January will make a settlement with China a plausible next step, bringing an end to the devastating tariff imposed on American soybeans," the group noted.

ASA is encouraging the Administration to consider adding Vietnam and Indonesia to its list of potential negotiating targets, and also sees the Philippines as a promising market. 

Together, trade with the EU, Japan and U.K. accounts for more than $1.5 trillion in goods and services.

“Under President Trump’s leadership, we will continue to expand U.S. trade and investment by negotiating trade agreements with Japan, the EU and the United Kingdom,” said Ambassador Robert Lighthizer.  “We are committed to concluding these negotiations with timely and substantive results for American workers, farmers, ranchers and businesses.”

In officially notifying Congress, USTR is following the procedures set out in the Bipartisan Congressional Trade Priorities & Accountability Act of 2015 – often referred to as Trade Promotion Authority (TPA) – which requires ongoing consultations with Congress. These consultations ensure that USTR develops negotiating positions with the benefit of Congress’ views. USTR will also publish notices in the Federal Register requesting the public’s input on the direction, focus and content of the trade negotiations.

Senate Finance Committee ranking member Sen. Ron Wyden (D., Ore.) welcomed the announcement, with caution.

“I welcome the Administration’s shift to focus on additional markets where there are barriers to U.S. exports and opportunities for made-in-America manufactured goods, agricultural products and services,” Wyden said. “However, the Administration must take the time to tackle trade barriers comprehensively, including using this opportunity to set a high bar in areas like labor rights, environmental protection and digital trade, in ways that actually benefit American workers and businesses.  A quick, partial deal that only addresses some problems risks leaving opportunities for Americans behind.

Under TPA, after notifying Congress of its intent to begin trade negotiations, the Administration must consult with Congress for 90 days before launching those negotiations.