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International Trade

Monitoring the Global Market

ISG monitors a number of issues that can affect global market access for Illinois soybean farmers, including activity to confirm ratified agreements are followed and new agreements address key issues for soybean farmers. ISG also monitors developments of free-trade agreements (FTA) and multi-lateral agreements that the U.S. is not part of but can leave the U.S. at a competitive disadvantage.

 

Key issues ISG is watching include the following:

China Overview

The Chinese market is very valuable to Illinois, as they purchase about 25 percent of our soybeans. That represents an estimated value of $1.75 billion in soybean exports from Illinois. As of January 1, 2018, China is restricting imports of U.S. soybeans with foreign material greater than 1 percent. This move is based on perceived concerns about impurities, especially weed seeds, in U.S. soybeans.

 

ISG advocates for expanded soybean use in Chinese kitchens, as well as in animal agriculture as feed for swine, poultry and aquaculture. Disruptions in trade to China would have significant detrimental impacts in the U.S. and global soybean markets.

China Update November 2018

 

The U.S. and China continue to swap tariff threats while trying to resume trade negotiations. To date, the U.S. has levied duties on a total of $250 billion worth of Chinese goods. China has retaliated by placing duties on an equal dollar amount. Through November 5, U.S. soybean exports to China are down 94 percent.

 

China Update July 2018

 

China’s 25 percent tariff on U.S. goods, including soybeans, takes effect.

 

China Update: Apr 4, 2018

 

Today the Chinese Commerce Department announced it would impose a 25 percent tariff on U.S. soybeans. This was in response to the Trump administration announcing its own 25 percent tariff on several Chinese industrial, technological and medical products in an effort to reduce the U.S. trade deficit with the country.

 

China will also impose a 25 percent tariff on U.S. pork, which impacts soybean farmers, if an agreement can’t be reached between the U.S. and China.

North American Free Trade Agreement (NAFTA)

ISG supports trade agreements, like NAFTA, that help expand U.S. soy exports and support trade opportunities throughout North America. It’s crucial that the agriculture sector maintains negotiated terms under the current structure of NAFTA while also modernizing the agreement as appropriate. NAFTA includes the U.S., Canada and Mexico.

NAFTA/USMCA Update September 30, 2018

 

Reaching an agreement with Mexico and Canada, the U.S. rebrands the NAFTA partnership as the United States-Mexico-Canada Agreement (USMCA).

 

ISG is encouraged to see action on trade with these critical trading partners, but will continue to urge the White House to break down trade barriers to create market access opportunities for Illinois soybeans.

 

NAFTA Update June 2018

 

The next round of trade talks occurred at the G7 summit June 8-9 in Quebec, Canada. However, disagreements on core U.S. demands, including the latest tariff announcements, have stagnated progress.

 

NAFTA Update January 23, 2017

 

President Trump issued an executive order announcing his desire to renegotiate NAFTA. Both Canada and Mexico indicated a willingness to renegotiate.

 

ISG supports modernizing NAFTA so long as agricultural agreements outlined in the current structure remain in place.

Trans-Pacific Partnership (TPP)

ISG supports negotiation of TPP so long as it significantly improves access to global markets for U.S. soybean and livestock products. However, in January 2017, President Trump signed an executive order withdrawing the U.S. from TPP. The agreement was between the U.S. and Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The remaining 11 countries have passed a similar deal called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

TPP Update January 2019

 

On Dec. 20, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP) entered into force for Australia, Canada, Japan, Mexico, New Zealand and Singapore. This is a revised version of the TPP agreement from which President Trump withdrew the United States on his third day in office. CPTPP enters into force on Jan. 14 for Vietnam.

 

U.S. South Korea Free Trade Agreement (KORUS). On Jan.1, 2019 the revised U.S.-South Korea Free Trade Agreement entered into force. The revised KORUS agreement was negotiated by President Trump in 2018, but did not include changes to the agriculture chapters.

Transatlantic Trade and Investment Partnership (TTIP)

ISG supports negotiation of TTIP between the European Union and the U.S., provided such an agreement takes into account the needs of soybean farmers and works to eliminate barriers to agricultural trade in Europe. Negotiations have been ongoing since 2013.

Trade Promotion Authority (TPA)

ISG supports Congress approving Trade Promotion Authority (TPA), which defines U.S. negotiating terms and sets requirements for the President to follow during the negotiation process. Under TPA, Congress gets the final “yes or no” vote in any trade agreements but cannot amend any of the negotiations.

TPA Update June 29, 2015

 

The White House confirmed that President Barack Obama signed the TPA into law, giving him fast-track trade authority. This came quickly on the heels of the U.S. Senate passing the TPA on June 24 and the U.S. House passing it on June 18. ISG supports this action as the TPA paves the way for valuable international trade negotiations.

Trade-distorting Domestic Government Policies

ISG works with others to ensure agricultural policies in other countries are compliant with international and trade law and do not unfairly harm Illinois soybean farmer competitiveness in overseas markets.

Tariffs

High tariffs in several key markets increase the landed price of U.S. soybeans overseas. Lowering tariff rates would create new opportunities for Illinois farmers, particularly in major soybean demand potential markets.

Non-tariff barriers (NTMs) and sanitary and phytosanitary standards (SPS)

NTMs and SPS include overly-burdensome regulations and certifications that foreign countries impose on incoming products, including soybeans. The primary issue currently monitored by ISG is restrictions on biotech — or GMO — products.