WASHINGTON – Some agriculture industry analysts and farmers are worried that the Trump administration’s determination to ignore the World Trade Organization and focus instead on bilateral trade negotiations will hurt U.S. agricultural exports in the long term.
The U.S. Trade Representative’s Office released its annual report to Congress on Wednesday, reflecting the president’s strong “America first” approach toward trade with other countries. The government plans to maximize American interests by prioritizing U.S. trade laws over the World Trade Organization’s rules, and focusing on bilateral negotiations instead of multilateral ones, the report said.
Karen Hansen-Kuhn, director of trade and global governance at the Institute for Agriculture and Trade Policy, a research center focused on family farms and sustainability, said because the report mainly dealt with last year’s trade outcomes, with only nine pages of the 336-page report focused on future priorities, it is unclear how the Trump administration will execute its trade vision.
“There’s definitely a need to reform on both levels, multilaterally and bilaterally,” Hansen-Kuhn said. “The question is what are the rules.”
The problem with bilateral trade talks are problematic because they are inefficient, and could easily create dispute settlements based on because of legal inconsistency between countries, said Dr. Steve Suppan, a senior policy analyst at the Institute for Agriculture and Trade Policy.
But he did note that there are some potential bilateral deals that could work.
For example, U.S. yellow corn could become increasingly attractive to China’s rapidly growing meat producers.
The Trump administration has said it is considering imposing sanctions when trade disputes come up instead of going to the WTO for dispute settlements.
While Trump’s nominee for U.S. Trade Representative, Robert Lighthizer, is an experienced lawyer who fought Japan’s steel dumping during the Reagan administration, there is no WTO or other international anti-dumping prohibition for agricultural products.
“Using the International Trade Commission as court to unilaterally sanction other countries is going to be difficult in the agricultural world,” said Suppan. The International Trade Commission is a quasi-judicial federal agency.
In the end, Suppan predicted that even with a shift to bilateral talks, “the architecture of Trump’s trade policy is not going to differ in substance only in appearance” from that of President Barack Obama.
Exports in agricultural products reported $67.7 billion last year, marking the seventh largest merchandise exports in the U.S., Department of Commerce data showed.
The sector is also a longtime champion in trade balance, with $29.5 billion of surplus in 2015 and $32.7 billion in 2016, while other major industries such as machinery and chemicals and related products had encountered trade deficits for years, said the Department of Commerce.
In Trump’s address to Congress Tuesday, he reiterated his goal of “fair trade.”
“While his focus on improving trade agreements is appreciated, our members are increasingly concerned about his earlier harsh rhetoric and the strain it has placed on our trading partners,” the National Farmers Union said in a statement Tuesday.
The organization of family farmers also said Trump’s plan to walk away from “lower-skilled immigration” neglects “the unique and important work that immigrant laborers provide for our nation’s food system and rural economies.”