Senators, lobbyists call for stricter USMCA enforcement, chief ag negotiator
Members of the Senate Finance Committee and ag lobbyists on Tuesday called on Trade Representative Katherine Tai to enforce the U.S.-Mexico-Canada Agreement on trade more forcefully and on President Biden to nominate an agriculture trade negotiator.
At a hearing, Senate Finance Committee Chairman Ron Wyden, D-Ore., said that President Trump had rushed the implementation of the USMCA and that the Biden administration has to “clean up the messes the Trump administration left behind.” Wyden added that Canada had “undermined” its commitment to giving more access to U.S. dairy products with new regulatory barriers even before USMCA went officially into effect last July and that Mexico is refusing to approve biotechnology products without any scientific barriers and threatening to ban agricultural products that have already been approved.
Sen. Mike Crapo, R-Idaho, the committee ranking member, said that USMCA included a number of innovations including Canada allocating new tariff rate quotas for dairy products and Mexico agreeing to protect 33 common cheese names. But he added that Idaho dairy producers face barriers in Canada and, while the Mexican Supreme Court recently ruled that potato growers can sell fresh potatoes into all of Mexico, consistent with USMCA obligations, “I will not consider the matter finished until Idaho’s farmers are able to sell high-quality potatoes to every family in Mexico.”
Crapo said he considers the Biden administration’s enforcement efforts “fairly disappointing” and highlighted Mexico’s unwillingness to cooperate on biotechnology including approval of biotech food or feed products.
Allan Huttema, chairman of the Northwest Dairy Association and a member of the Darigold board of directors, who testified remotely from Parma, Idaho, said Tai’s recent initiation of USMCA dispute settlement proceedings over Canada’s allocation of dairy tariff-rate quotas (TRQs) “is a welcome step” but that additional monitoring and enforcement efforts must also focus on Canada’s implementation of its commitments on Class 7 pricing and export surcharges on Canada’s dairy protein exports, as well as on Mexico’s proliferation of ill-intended regulations that are aimed at disrupting trade.”
He added, “Close attention must also be paid to Mexico’s implementation of USMCA provisions on geographical indications (GIs). USMCA’s GI provisions can and should serve as a valuable foundation to respond to the threat posed by the EU’s efforts in various markets to restrict U.S. dairy competition by denying U.S. producers the right to use common food names.”
Huttema said he recognizes the importance of defending the rights of specific regions like Idaho to protect compound names like “Idaho potatoes,” but that the European Union wants to protect common cheese names like parmesan that have been in the public domain for centuries.
Michelle McMurry-Heath, CEO of the Biotechnology Innovation Organization, testified that “USMCA represented a significant improvement on NAFTA for the agricultural biotechnology industry” because it was the first agreement to address agricultural biotechnology specifically but that since the election of President Andrés Manuel López Obrador, Mexico’s food and drug regulatory authority (COFEPRIS) “has effectively shut down and Mexico’s regulatory system has become nonfunctional.”
McMurry-Heath added, “Compounding the uncertainty caused by COFEPRIS’s failure to issue a biotech import approval in over three years, the government of Mexico published a decree on Dec. 31, 2020, announcing the intention to phase out the use of important agricultural technologies, including use of biotech corn for human consumption by 2024. In 2020, the U.S. exported $2.7 billion of corn to Mexico. As a result, this decree could have a major impact on the U.S. agriculture industry and producers across the country. It is another unfortunate example of Mexico’s waning adherence to our trade agreements.”
“With little indication from Mexico that it will adhere to its USMCA commitments,” McMurry-Heath said, “BIO strongly urges USTR to begin taking enforcement action on Mexico’s treatment of agriculture biotechnology. An enforcement case would at a minimum provide a framework and timeline to resolve the COFEPRIS-related delays in biotechnology approvals and the Dec. 31, 2020, decree. Without a process, BIO and its members fear the government of Mexico will continue the status quo, and possibly broaden the scope of the decree to additional agricultural products, which would compound the impact on U.S. trade and future innovation.”
Under questioning, McMurry-Heath called on the Biden administration to nominate a chief agriculture trade negotiator, a position with ambassadorial rank that requires Senate confirmation. Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., and Sen. John Thune, R-S.D., said they agreed with McMurry-Heath that an ag negotiator should be nominated soon.
McMurry-Health said an ag negotiator is important to hold all trade partners to trade agreements and make sure regulators pay attention to science. “The chief ag negotiator would be our point person on this. It is imperative that we act now,” she said.
At the end of the hearing, Wyden said the witnesses’ testimony was important to reinforce the committee’s attention to enforcement of trade agreements.
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