Impact of COVID-19 on Agriculture

Trade Agreements

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U.S.-Japan Trade Agreement

Issue at a Glance

The U.S.-Japan Trade Agreement went into force on January 1, 2020. The agreement lowers tariffs and puts U.S. farmers and ranchers on a level playing field to compete in Japan with countries that participate in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, formerly known as the Trans-Pacific Partnership.

Further discussions with Japan on trade rule improvements related to science-based sanitary /phytosanitary standards and biotechnology rules, among other issues, are expected.

Highlights

  • U.S. farmers and ranchers export nearly $12 billion a year in agricultural products to Japan, making it the fourth-largest export destination for American farm and ranch goods.
  • Japan placed the same level of agricultural tariffs on U.S. goods as it places on CPTPP countries and the European Union. By way of example, the 38.5% tariff on U.S. beef was immediately reduced to the 26% placed on beef from Australia, Canada and the EU. The tariff will decline further in accordance with the agreement.
  • Other foods such as duck, geese, turkey peaches, melons and more will enter duty-free.
  • No action by the U.S. Congress was necessary, as this is not a full trade agreement that involves substantive changes to existing U.S. law.

Resources

This Market Intel details how the U.S.-Japan deal may help U.S. farmers and ranchers catch up to the countries already enjoying significant access to the Japanese market via the CPTPP.

 

U.S.-China Phase 1 Agreement

Issue at a Glance

On Jan. 15, 2020, the U.S. signed a “Phase 1” trade agreement with China that went into force on February 14, 2020. As a part of the agreement, China has agreed to purchase at least $80 billion of U.S. agricultural products cumulatively in 2020 and 2021. The U.S. exported $27 billion of agricultural products to China in 2020.  Soybeans, corn, pork sorghum and wheat were major purchases by China.

Reforms in food standards affecting imports of beef, poultry, dairy, and horticultural products have been implemented by China.  America’s farmers and ranchers are eager to get back to business globally, and restoring our ability to be competitive in China is key to that.

Highlights

  • Reduction or elimination of non-tariff barriers is included for meat, poultry, rice, dairy and other products. The biotechnology approval process is also improved.

  • Tariffs, imposed on September 1, 2019, will also be reduced from 15% to 7.5% on $112 billion of imports from China.  Tariffs will remain at 25% on $250 billion of imports.

USTR factsheet

U.S. – UK Negotiations

Issue at a Glance

The United States and the United Kingdom began trade agreement negotiations in May 2020. The U.S. exported $1.8 billion in agricultural products to the UK in 2019, while the UK exported $800 million in agricultural products to the U.S.

As the UK has left the EU it is able to conclude a trade agreement with the U.S.

Farm Bureau’s trade negotiation objectives

  • Include all agricultural products and policies in the negotiations
  • Eliminate non-tariff trade barriers
  • Ensure market access for biotechnology products
  • Address issues concerning import-sensitive products
  • Oppose the Precautionary Principle
  • Oppose the use of geographic indicators

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