Trade Policy and Wheat in the Obama Administration
By Ben Conner, USW Director of Policy
Next week, the United States will hold its quadrennial pageantry to mark the beginning of a new presidential term. Since term limits prevented President Obama from running again, his administration will come to an end.
The wheat industry has not always seen eye to eye on every issue with the Obama Administration, but on trade policy there has been a great deal of common ground. As the Obama years draw to a close, it is worth reflecting on the trade policy accomplishments of this Administration.
The first major trade policy accomplishment of interest to wheat was finishing the agreements with Colombia, Panama and South Korea that were negotiated during the George W. Bush Administration, which were passed by Congress and signed into law in 2011. Tariffs for wheat went to zero as soon as the agreements entered into force. This is especially important as some of U.S. wheat’s major competitors in Australia and Canada were also negotiating FTAs with these countries.
After these agreements were finished, the focus shifted to negotiating the two largest free trade areas in terms of GDP ever attempted — the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). These agreements are full of complexity due to the scope and the number of economies involved. TPP negotiations were completed in 2015 but have not been ratified by Congress. Its future is highly uncertain in the next Administration. TTIP has much further to go, but its delay has much to do with political dynamics in the European Union. Regardless of the ultimate outcome of these agreements, the Obama Administration can rightfully be proud of its ambitious free trade agenda.
One of the most high profile initiatives affecting wheat was the Administration’s reestablishment of diplomatic relations with Cuba and accompanying efforts to reduce the regulatory burdens around trade with that market. Cuba imports no U.S. wheat today, but could be a top 10 market with the end of the trade embargo. Unfortunately, the embargo is still in place and no U.S. wheat has been sold, but these actions to improve relations with Cuba were important first steps.
A major but often overlooked accomplishment is that this Administration finally put the brakes on the World Trade Organization’s (WTO) Doha agenda, which had long since stopped being a serious avenue for opening trade. There are some countries that will still insist that Doha needs to continue, but any real prospect of reviving those negotiations ended with the 2015 Nairobi Agreement. Another accomplishment of that agreement was a phased out end to export subsidies — historically a major source of distortion in global wheat trade.
Finally, there are the WTO cases launched against China’s excessive subsidies and its opaque tariff rate quota (TRQ) administration for wheat imports. These are two of the most significant trade cases ever taken on behalf of U.S. farmers (and, of course, Chinese consumers). USW is proud to have played a major role in getting those cases going and congratulates the Administration for filing them. The incoming Administration has pointed to trade agreement enforcement as one of its priorities, so we have every reason to believe these cases will be pressed to their conclusions.
These are the trade policy accomplishments that grab the headlines. There have been dozens of other actions taken on behalf of U.S. wheat farmers that facilitate sales, keep markets open and improve the global trading system. As the Obama Administration leaves and the Trump Administration begins, the wheat industry can be grateful that the exceptionally competent top career staff at the U.S. Department of Agriculture and U.S. Trade Representative will still be in their jobs on Jan. 21, continuing their efforts on behalf of U.S. agriculture.