These issues include U.S. agricultural trade and its importance to the agricultural sector, a brief description of the trade policy being pursued by the Trump Administration and its ramifications for U.S. agricultural exports, the Administration's actions to mitigate the economic impact on agriculture from retaliatory actions by trading partners against its trade policies, and the implications for U.S. agriculture of the U.S. withdrawal from the Trans-Pacific Partnership (TPP) agreement. The retaliatory tariffs were in response to the Trump Administration's imposition of Section 301 tariffs on certain imports from China and Section 232 tariffs on U.S. imports of steel and aluminum. Agricultural exports are important both to farmers and to the U.S. economy. The direction of the Administration's trade policy—for example, withdrawing from the Trans-Pacific Partnership (TPP) agreement with Japan and 10 other Pacific-facing nations and engaging in trade disputes with important agricultural trading partners that have resulted in retaliatory tariffs on U.S. agricultural products—has coincided with market share losses for certain U.S. agricultural exports. In January 2017, the Trump Administration withdrew from the TPP, which was subsequently concluded by the remaining TPP signatories under a modified framework renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in March 2018. The Administration has notified Congress of its intent to begin negotiations under Trade Promotion Authority (TPA) with trading partners including Japan, the EU, and the United Kingdom (UK). Canada, China, Mexico, the EU, and Turkey—whose exports were affected by the steel and aluminum tariffs—retaliated with tariffs on imports of a range of U.S. agricultural and food products and other goods. The combination of U.S. absence from CPTPP, retaliatory tariffs on U.S. farm and food exports, and the possibility of the United States withdrawing entirely from NAFTA—as President Trump has threatened in the absence of USMCA ratification—could lead to a potential annual drop in U.S. agricultural exports of $21.8 billion, according to a study commissioned by the Farm Foundation. Status : U.S. agricultural exports appear to be at an increasing disadvantage in the CPTPP member country markets as these countries have begun to expand market access and reduce tariffs on imported products from CPTPP signatory countries. U.S.-Mexico-Canada Agreement (USMCA)61

On September 30, 2018, the Trump Administration announced an agreement with Canada and Mexico, USMCA, which it is promoting as a replacement for the NAFTA. Other North American Trade Issues

The proposed USMCA does not address all the issues that restrict U.S. agricultural exports to Mexico and Canada, nor does it include all of the changes sought by U.S. agricultural interest groups. For instance, Southeastern U.S. produce growers have been seeking changes to trade remedy laws to address imports of seasonal produce. Other Major Trade Issues

Several other trade issues may be of interest to Congress. A key objective of U.S. trade negotiations has been to establish a common framework for approval, trade, and marketing of the products of agricultural biotechnology. In addition, U.S. farm and food interests continue to see potential market expansion opportunities in Cuba, but interested exporters regard a prohibition on private U.S. financing as a major obstacle to this end. On the import side of the trade ledger, in March 2019, the United States initiated its review of the Generalized System of Preference (GSP), which provides duty-free tariff treatment for certain products imported from developing countries. GIs continue to be a trade issue for USTR, and the United States is working "to advance U.S. market access interests in foreign markets and to ensure that GI-related trade initiatives of the EU, its Member States, like-minded countries, and international organizations, do not undercut such market access," stating that the EU's GI agenda "significantly undermines the scope of trademarks and other [intellectual property] rights held by U.S. producers and imposes barriers on market access for American-made goods that rely on the use of common names." The EU is also a major supplier of U.S. agricultural products. COOL for beef and pork. Most recently, the WTO ruled in favor of the United States against China over Chinese domestic support policies for its agricultural sector and over China's administration of its market access policies.
Sales of U.S. agricultural products to foreign markets absorb about one-fifth of U.S. agricultural production, thus contributing significantly to the health of the farm economy. Farm product exports, which totaled $143 billion in FY2018 (see chart below), make up about 9% of total U.S. exports and contribute positively to the U.S. balance of trade. The economic benefits of agricultural exports also extend across rural communities, while overseas farm sales help to buoy a wide array of industries linked to agriculture, including transportation, processing, and farm input suppliers.
Congress has traditionally displayed a keen interest in agricultural trade issues given their importance to farmers and ranchers and to the overall economy. A major area of interest for the 116th Congress has been the loss of overseas export market shares for agricultural products due to the direction of the Trump Administration's trade policy, which places increased emphasis on reducing the overall U.S. trade deficit. In March 2018, the Trump Administration imposed Section 232 tariffs on U.S. imports of steel and aluminum from most countries and additional Section 301 tariffs on a number of imports from China. Following these actions, Canada, China, Mexico, the European Union (EU), and Turkey imposed retaliatory tariffs on more than 800 U.S. agricultural and food product exports. In response, USDA authorized $12 billion in short-term assistance to the affected agricultural producers and commodities under its Market Facilitation Program to help mitigate the economic impact on farmers.
A number of policy developments undertaken by the Trump Administration in bilateral and regional trade agreements may affect agricultural markets as well. On the Administration's initiative, the North American Free Trade Agreement (NAFTA) has been renegotiated and signed as the U.S.-Mexico-Canada Agreement (USMCA). This agreement is subject to legislative ratification by Canada and Mexico and approval by U.S. Congress. President Trump withdrew the United States from the Trans-Pacific Partnership (TPP) in January 2017. In March 2018, the remaining 11 countries concluded a revised version of TPP, the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP). Signatories of CPTPP have begun to reduce tariffs and provide greater agricultural market access for imports from CPTPP signatory countries, actions that could potentially erode U.S. agricultural market shares in the region. At the bilateral level, the Trump Administration has notified Congress of its intent to begin trade negotiations with Japan (a CPTPP member), the EU, and the United Kingdom.
At the global level, and at the initiative of the United States, the World Trade Organization (WTO) recently ruled that China has subsidized its agricultural production beyond the level permitted under its WTO obligations and that China's administration of its agricultural market access policies are inconsistent with its WTO obligations. The United States has also filed a counter notification against India at the WTO stating that India has underreported its agricultural domestic subsidies.
Several other agricultural trade issues may be of interest to Congress. For example, the proposed USMCA does not address all the issues that restrict U.S. agricultural exports to Mexico and Canada, and Southeastern U.S. produce growers have been seeking changes to trade remedy laws to address imports of seasonal produce. A key objective of U.S. trade negotiations continues to be the establishment of a common framework for approval, trade, and marketing of the products of agricultural biotechnology. U.S. farm and food interests see the potential for market expansion opportunities in Cuba, but a prohibition on private U.S. financing is generally viewed as a major obstacle to this end. Moreover, the United States has announced its intention to withdraw eligibility for the Generalized System of Preference (GSP)—which provides duty-free tariff treatment for certain products from developing countries—from Turkey and India. On another front, U.S. exports of beef, pork, and chicken continue to face bans and trade restrictions over disease outbreaks even though the bans are inconsistent with international trade protocols, among which are China's ongoing bans on imports of U.S. beef and poultry and restrictions imposed by several foreign markets on U.S. ractopamine-fed pork.