A key trade official has confirmed that in 2021, the U.S. will continue its efforts to remove barriers to foreign markets for almonds and other agricultural products – a goal seen as critical to the continued success of the California almond industry.
During a wide-ranging discussion at The Almond Conference 2020, Assistant U.S. Trade Representative (USTR) for Agricultural Affairs and Commodity Policy Julie Callahan discussed her office’s accomplishments in 2020 along with their plans for the year ahead.
“The vast majority of the work we do at USTR could fall into two types of major trade barrier buckets,” Callahan said. “The first is the tariff barriers – everyone’s quite familiar with the impact of high tariffs on our ability to export agricultural products. But then an even bigger and more complicated bucket is the non-tariff barriers.”
Non-tariff barriers result when important rules meant to protect the public – ensuring food safety and preventing import of invasive pests, for example – are used to create a kind of red tape that goes beyond their intended effect and impedes trade.
“All of these measures are critically important, but sometimes foreign governments use the measures to create non-tariff barriers that will favor their country over another country,” Callahan said. “And that’s where we generally try to engage with U.S. regulators, provide guidance where it’s useful and sometimes join in those discussions where we really need to address unjustified barriers that foreign governments may be trying to impose.”
The job is complex, Callahan said, noting that the challenges change from country to country, and vigilance is required even after agreements are made to ensure commitments are kept.
She pointed to three important trade agreements reached by the U.S. in 2020 – a $7.2 billion agricultural trade deal with Japan, adoption of the so-called “Phase 1” China agreement, and a new U.S.-Mexico-Canada trade agreement (renewal of the former NAFTA agreement). These agreements involve the nation’s four largest trading partners and about half of U.S. ag exports.
“All of the hard work that went into getting those agreements over the finish line was just the beginning,” Callahan said. “Negotiations alone don’t eliminate non-tariff barriers.”
In 2021, USTR will continue work to complete comprehensive trade agreements in the UK and Kenya. Though the UK is a relatively small market for U.S. agriculture products, the negotiations are important due to the implications they may have on science-based standards for regulating trade. Callahan said the U.S. is in a constant campaign to ensure that science-based standards are used for evaluating shipments of agricultural products.
“One major challenge we’re facing in 2021 is shaping the narrative around agricultural sustainability and food systems,” she said.
This not only entails setting appropriate safety, sanitary and phytosanitary standards, but involves the broader discussion of agricultural sustainability. While U.S. agriculture is investing heavily in sustainability – to improve soil health, increase yield with fewer inputs and lower its carbon footprint – discussion of U.S. agriculture abroad is often characterized by “misinformation and misunderstanding,” she said.
“Some of the messaging equates what’s called ‘big agriculture’ with not being sustainable, and often the term ‘big agriculture’ is used as a synonym for U.S. agriculture,” she said. “We really need to have a concerted effort, both from the private sector and from the U.S. government, to ensure that our messaging really reflects what’s happening on the ground in the U.S., and other countries can model their practices after what is being done here.”
Messaging should also include the resilience of U.S. food systems, she said, a characteristic that was tested during the pandemic in 2020.
“In terms of the ability of U.S. agriculture to remain strong in global trade, I think COVID-19 has really highlighted both some unexpected challenges within the supply chains, but also it’s ultimately demonstrated the resiliency and strength of U.S. agriculture producers and the U.S. food production and distribution system,” Callahan said. “Moving forward, we want to incorporate that into our messaging, as well, so other countries can see the U.S. as an aspirational role model for their own domestic approaches.”
Despite recent successful trade talks with many major partners and ongoing work in the UK, Kenya and elsewhere, Callahan noted that there is still much to do in some of the world’s largest markets, such as the EU and India.
“The U.S.-EU relationship is extremely important to us, but it's also highly unbalanced. Our major ag trading deficit is with the EU. In 2019, we had an $18 billion deficit – that's really unheard of, if you look at our other trade numbers across the world,” she said.
“In our view, it's the result of a number of tariff and non-tariff barriers that prevent U.S. agricultural producers from accessing the market. U.S. agriculture has a very high ability to compete worldwide, where we have a level playing field. And so, we will continue to press the EU to address the unjustified barriers that restrict our access and to continue to build markets for U.S. agricultural producers."
Similarly, Callahan acknowledged that India has been a frustrating market for a number of commodities.
“India is certainly top-of-mind for a number of stakeholders, almonds and others,” she said. “It's a country that has a very highly protective ag sector, and we have been engaging with India very closely over several years, trying to make headway. Across the board, the barriers that are put in place by India are really monumental, and have been very difficult to address, but we haven't given up. It's still a work in progress."
The USTR efforts described by Callahan are critical to the long-term viability of California’s almond industry, said Jonathan Hoff, who moderated this conference session. Hoff, who chairs ABC’s Technical and Regulatory Affairs Committee, is the CEO of Monte Vista Farming Company, a Denair-based almond huller and processor that ships to more than 20 countries.
“We must remain focused on mitigating as many speed bumps as possible in order to retain and grow our access in key markets,” Hoff told conference attendees. “As almonds become a bigger player in the export market, we also become a bigger target, so how the U.S. approaches trade relationships and negotiations is essential for our industry.”
He added that almonds are already the second-largest agricultural export by value to the EU, second only to soybeans, and are the largest by value to both the United Arab Emirates and India.
“If California production continues to expand, maintaining diversity of export destinations by opening more markets and creating more demand will play a critical role in achieving the mission of moving the entire crop at economically sustainable levels,” said Hoff.
For more information on how ABC is continuing to support U.S. government associations both in-country and overseas, please contact Vice President of Global Technical and Regulatory Affairs Julie Adams at jadams@almondboard.com.
