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U.S. has been spoiled with past trade agreements, USTR’s Tai says

Rebuilding resilience has the USTR very busy these days, Ambassador Tai says.

The U.S. has been spoiled for a long time when it comes to global trade, according to U.S. Trade Representative’s Ambassador Katharine Tai.

On Friday, Ambassador Tai made her comments during the USDA’s Annual Ag Outlook Forum.

While looking at the U.S. trade policies and global trade from a broad perspective, Tai says that it hasn’t been until recently that the U.S. has experienced events and phenomena that have shown trade as discombobulated.

Comparing U.S. trade issues to a clock, she says the gears are not always attached and pieces are coming undone.

The supply chain issues are to blame, she says, along with the physical and logistical sides of trade and a lack of resilience in today’s globalization.

“The pandemic was a major shock to the (trade) system,” Tai says. “And, what we are seeing between Russia and Ukraine is another shock to the system.”

The U.S. has experienced pandemics, natural disasters, and war before, but this brings us to a need for innovation from our stakeholders and economy, the U.S. trade official says.

“The ag economy needs to find ways to adapt when times are hard. We need to figure out how to be lighter on our feet. Take our know-how and be smarter about the changes in our world.”

Ambassador Tai sees room to improve, for the U.S. to use innovation in trade policy to bring back trust amongst trade partners.

China Trade

Along with a trade mission in the Indo-Pacific region (India, Phillipines, and Thailand), the USTR is squarely focused on improving trade with China.

As it relates to agriculture, the overall relationship with China is important very complex, the U.S. trade official says.

“For our European and Asia-Pacific partners, China is at the same time the same and different to all of us,” Ambassador Tai says. It (China) is a rival, a competitor, but also a partner where we can establish that kind of trust.”

In the U.S.’s meetings on trade with China, so far under the Biden administration, the focus has been on the Phase One trade agreement. 

In that agreement, China has fallen way short of the purchases of U.S. products that it had agreed to in 2020.

“(China’s) performance under this agreement has been uneven. We have had direct, honest, and respectful conversations with the Chinese since the beginning of October 2021. These conversations have not been easy and have gotten more difficult over time,” Ambassador Tai says.

She added, “We are going to continue to press China on the impacts of its trade policies. We will focus on our rules and, although we would like for China to play by our rules, we cannot make decisions for it.”

Impact from war

Tai sees what is happening between Russia and Ukraine as gravely concerning.

“The critical piece is to work with our NATO allies and then look out for our economy. When it comes to agricultural trade, the USDA will have to assess the impacts. Ukraine is an agricultural powerhouse. So, we need to figure out the kind of trading partner our allies need us to be and how we take care of our own,” Ambassador Tai says.

Ukraine is the fourth-largest exporter of agricultural products in the world.

Interestingly, Ukraine exports a lot of products to China, Europe, the Middle East, and Africa.

USMCA

The U.S.-Mexico-Canada (USMCA) trade agreement has recorded some wins, according to USTR’s Tai.

Under the agreement, the U.S. dairy farmers have gained greater access to the Canadian market.  

“We need to keep pushing our North American neighbors to keep their word on this agreement. We will be working with the USDA and our dairy farmers on that,” Ambassador Tai says.

Another key U.S. partner is Mexico.

“We are working with Mexico to get clear signals regarding our biotechnology products that our producers are using. This has been a difficult issue and we plan to work with the USDA and our industry stakeholders,” she says.

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