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Commentary: The Trade Barriers You Don’t Hear About

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By Gary Truitt

The agricultural news of late has been all about trade, all the time — except, perhaps, for the news about delayed planting issues.  Most of the trade news focused on trade tariffs and trade agreements. Yet, some of the most significant barriers to agricultural trade have nothing to do with these issues.

Officially they are called Sanitary and Phytosanitary standards. This is government-speak for “we don’t think your food is safe.” Countries that have no government agencies that regulate food safety and that often sell their food products in open air markets or out of the back of horse drawn carts, use these to keep out food products from the U.S. Our food is the most inspected and regulated in the world, despite what consumer activists say. So when a country can’t think of a way to keep out our agricultural products, they play this card.

A corollary to this are the Non-Tariff trade barriers. This is when a nation says, “we don’t like the way you produced the food item you are trying to import into our nation, thus we are not going to let it in.” This usually involves biotechnology. A traited hybrid or grain treated with a certain herbicide. While there may be NO science to back up this claim, they will use it anyway. Certain meat and dairy products are also hit with this same thing involving the use of a certain drug.

Yet, these same nations expect and even demand free access to the U.S. market for their products. There are, in theory, appeals that can be made to international trading bodies though these take years even decades to be resolved.

If a nation is forced to drop their non-tariff trade barriers, they will then turn to regulations. This involves setting regulatory standards that are impossible to meet. Called MRL’s, they are used to keep U.S. products out. They will then change these standards frequently so importers cannot keep up.

There are also barriers to trade being raised by our own government. While we are struggling to export corn, there is a market that is ready buy U.S. corn just in a different form. Ethanol exports have been booming and could expand even more if the EPA would allow more ethanol production. Its slow pace on approving E-15 and its granting of special favors to the oil industry have slowed ethanol production and limited exports. One industry leader said over 2 billion bushels of new corn demand could be had with greater ethanol production and increased exports.  Countries who will not buy our raw corn will eagerly import our corn-based renewable fuel.

International trade is very competitive and complex, thus the importance of fair and balanced trade agreements, especially ones that involve agricultural trade. These deals must not only cover import tariffs but a variety of non-tariff trade barriers. Trade is a politically sensitive topic in Washington, especially in an election year. The political polarization that has gripped our country has made this even worse. Making our leaders understand the importance of trade to both the farm economy and the overall economy is vital.

Breaking down our ag trade barriers will take more than just trade agreements. The get-tough, trade stance of the Trump administration may be the right approach, even if their tactics are like driving a 2 penny nail with a sledge hammer. The slash and bash approach may be doing more harm than good and may not deal with some of the non-tariff barriers discussed above. A more strategic approach to ag trade is needed, yet one that holds other nations to their commitments and truly benefits American agriculture.