China Trade Developments

NAEGA continues to follow developments related to U.S. trade with China. Overall we continue to directly address U.S. government policy toward China and potential Chinese retaliation. Currently, Section 232 tariffs are in place against Chinese steel and aluminum products. In response, the Chinese government is enforcing retaliatory tariffs related to these duties a number of U.S. products, including pork. Meanwhile, the Section 301 investigation into Chinese intellectual property rules is ongoing. While no tariffs have been set on either side related to Section 301, Chinese authorities have released a retaliatory list of products that includes soybeans.

U.S. Soybean exports to China
Since December 13, 2017 NAEGA and several other industry representatives have raised concerns about the uncertainty and lack of predictability that has arisen from the lack of clarity on how APHIS and AQSIQ will instruct and control exports and imports given the new measures deployed on January 1, 2018. These concerns include the placing by APHIS of an additional declaration indicating Foreign Material that exceeds 1 percent on the APHIS issued phyto-sanitary certificates for applicable U.S. shipments of soybeans to China.

The uncertainty and lack of predictability has resulted in diverted shipments and sales. For 4 months NAEGA has reported that some CIQ officials have threatened or arbitrarily enforced on U.S. shipments the Decree 177 provision that might require imports to meet or exceed all factors of China #1 grade soybeans.

In order to help reduce the uncertainty and lack of predictability and mitigate these adverse impacts, industry has sought explanations and documentation from both AQSIQ and APHIS. Fortunately, on December 27, 2017 USDA FGIS provided a directive # 9180.85 “INCLUDING A FOREIGN MATERIAL STATEMENT ON FGIS 921-2 FOR SOYBEAN SHIPMENTS TO CHINA”,   Unfortunately, since this time the sparse, uncodified and inconsistent information coming from both AQSIQ and APHIS has only served to increase apprehension.  For example, APHIS has explained that their agreement with AQSIQ on how to proceed is unwritten. In reference to a document APHIS provided and identified as an excerpt from the signed minutes of a bilateral meeting during the first week of December 2017, which indicates that “expedited” treatment will be afforded by AQSIQ for imports of U.S. soybeans that do not have the additional “FM” declaration, AQSIQ has responded that expedited is not a correct word and that “differential” treatment is more accurate.  APHIS is proceeding with our support to deploy elements of a “Systems Approach” it has crafted with our assistance intended to reduce weed seeds in U.S. soybeans.  APHIS has indicated they are not acting on the elements of the Systems Approach that address China’s practices.

While little has been done to address the trade frustrations, solutions are apparent in the short term.  Moreover, longer term process improvements are apparent that can and should be implemented to prevent similar consequences in the future. NAEGA is taking and recommends a number of actions in response.  Our focus has been, and continues to be, to provide for regulatory and commercial best practices within the parameters of sound science, legal compliance and international convention to provide for the least trade distortion and best environment for all stakeholders.  Among those actions:

  1. Cooperating with USDA by contributing to and communicating our concerns and possible solutions as part of the USDA Systems Approach on Weed Seeds. Unfortunately, APHIS has no current plans to address the “Trade Support” elements that would address China’s practices and provide for leveling the playing field for U.S. exports.
  2. Supporting the establishment of a new protocol to provide for consistent application of more predictable and transparent Chinese soybean import requirements that are science based and consistent with the International Plant Protection Convention’s International Standard for Phytosanitary Measures Number 32.
  3. Completing work to establish U.S. official and commercial practice as sufficient to meet China’s Administrative Measures of Inspection and Quarantine for the Entry and Exit Grain issued by the General.

NAEGA is working aggressively across US government agencies and with the White House to encourage global coordination with soybean origins as well as with China to address barriers soybean trade.  We are specifically pressing the U.S. government to work immediately to: Establish new protocols to meet China’s Decree 177 needs to provide for consistent application of more predictable and transparent Chinese soybean import requirements that are science based and consistent with the International Plant Protection Convention’s International Standard for Phytosanitary Measures Number 32. As such this protocol would eliminate the AD.  In addition, we are pressing the U.S. government to closely examine and report on the unwritten agreement between APHIS and AQSIQ and actions taken by U.S. officials that led to the current circumstances.

In addition, NAEGA is gathering information from members regarding the treatment of imported U.S. soybeans and reporting findings to US Government officials in an effort to provide support for bi-lateral negotiations.

Sorghum AD/CVD Case
NAEGA continues to lead a Special Interest Group (SIG) of companies and organizations interested in responding to China’s filing of an anti-dumping (AD) and countervailing duty case (CVD) against U.S. sorghum. Last week, China took the first steps to deploy a tariff on U.S. origin sorghum imports with requirements for the payment of a non-refundable deposit of  179 percent effective on Monday April 16.  The SIG is sharing information on industry and USG responses to the AD and CVD cases brought by China’s MOFCOM and is considering options for future engagement with both U.S. and Chinese governments. Membership in the SIG is still open to all NAEGA members and interested parties. Please contact Ryan for more information.

Meanwhile NAEGA is working to provide U.S. officials with current assessments to support a negotiated solution to preempt tariff escalation. We have emphasized that the sudden implementation of new tariffs is very problematic as again commercial contracts are being cut across with serious short-term cost implications as well as long term ramifications.  Specifically, we are pressing for a retroactive 30 to 45 days runway / transition before deployment of the deposit for the market to adjust.

Please let us know if you have any information or advice regarding ongoing trade developments with China.

House Agriculture Approves Farm Bill

On Wednesday, April 18 the House Agriculture Committee approved legislation that would reauthorize the current Farm Bill for another five years. The legislation approved by the Committee would keep farm supports little changed from the 2014 legislation. The 26-20 party line vote highlighted Democrat disapproval to Republican provisions that would overhaul and introduce further work requirements in the Supplemental Nutrition Assistance Program (SNAP). House leadership has indicated that they hope to bring the legislation to the floor sometime in May for a final vote.

IGTC and ISF Meetings – April 24-27 – Nyon, Switzerland

On April 24-27 NAEGA volunteer Randy Gordon will travel to Nyon, Switzerland to join an International Grain Trade Coalition (IGTC) team at a meeting with the International Seed Federation (ISF) Secretariat. During this meeting with the ISF, Mr. Gordon will join IGTC Secretariat Katy Lee and other IGTC members to represent IGTC positions on plant breeding innovation, including new technologies like genome editing.

A copy of the notice to post for this travel can be found here.

Letter to President Trump on Asia-Pacific Trade

Last week the Asia-Pacific Working Group of the U.S. Food and Agriculture Dialogue for Trade sent a letter to President Trump and key U.S. executive department officials regarding the importance of improving the international trade and investment environment in the Asia-Pacific region for American workers, farmers, ranchers, processors, agri-businesses and food manufacturers. The letter strongly support the Administration pivoting expeditiously toward an ambitious trade agenda with Asia-Pacific countries and commencing negotiations with Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) members to open new markets and preserve existing trade for American food, agricultural and other U.S. products.

A copy of the letter can be found here.

Hearing on China Agricultural Policies

The U.S.-China Economic and Security Review Commission will hold a public hearing on China Agricultural Policies: Trade, Investment, Safety and Innovation on Thursday, April 26 beginning at 9:00am in the Russell Senate Office Building 328A. The meeting will include discussions from two panels of witnesses who will cover the topics of China’s Food Security Policies and U.S.-China Trade in Agriculture and Chinese Biotech Policy and Food Safety. A copy of the meeting agenda and witnesses can be found here.

IGTC Newsletter

The latest IGTC Newsletter is now available! This week’s newsletter covers IGTC actions at the IPPC Commission on Phytosanitary Measures, an updated on the IPPC ePhyto Project, and a call for interest in attending the COP-MOP 9 meetings in Egypt on November 10-22.

For more details, read the IGTC Newsletter here or visit the IGTC website at

World Bank Agriculture Trade Survey

The World Bank Group’s Enabling the Business of Agriculture project is inviting NAEGA members to contribute their knowledge and expertise to the Enabling the Business of Agriculture 2019 report.  The report will analyze and monitor regulations that impact how markets function in the agriculture and agribusiness sectors in 82 countries around the world. More information on EBA, including its latest report covering 62 countries can be found here:  Among others, EBA data can be a useful tool when advocating for regulatory reforms to enable market access in your countries.

The EBA team is looking for trade associations, agribusinesses, agri-cooperatives and other associations in your country to share their knowledge by completing a set of questions on the regulatory challenges they face when exporting agricultural products. These questions can be found in Section 5 of this survey.

Data collected through these surveys will be presented in the EBA’s 2019 report and, if you choose to contribute, you will be acknowledged in the report and on their website, subject to your consent. The EBA team will also send you a World Bank certificate of participation and a complimentary copy of the report. Individual responses are kept strictly confidential and are not shared with anyone inside or outside the World Bank.

MRL Workshop Trip Report

A trip report is now available for NAEGA contractor Matt Lantz’s travel to Geneva, Switzerland. In Geneva, Matt, in close coordination with the IGTC’s MRL Policy Team, participated in a WTO sponsored Maximum Residue Limit (MRL) Workshop on February 26-27. At the workshop Matt will represented NAEGA and advanced IGTC policy advocacy related to MRLs during discussions with importer and exporter government officials, intergovernmental organization representatives, and industry.

A copy of the trip report is available here.

COCERAL Transition Trip Report

A trip report is now available for IGTC Secretariat Katy Lee’s trip to Brussels, Belgium. In Brussels, Katy met with COCERAL’s new Secretary General Iliana Axiotiandes and Head of Regulatory Affairs Kevin Bosc to discuss the transition of the new COCERAL leadership following the departure of IGTC vice-president and COCERAL secretary general Teresa Babuscio. During a full day of meetings, Ms. Lee and COCERAL discussed IGTC policy positions on plant breeding innovation, maximum residue limits (MRLs) and electronic documentation; the leadership role of The Netherlands in the International Plant Protection Convention’s (IPPC) ePhyto pilot project; and the support of the EU Commission in identifying regulatory frameworks to support implementation of the ePhyto initiative.

A copy of the trip report is available here.

Trump Administration Looks to Join TPP

In comments made yesterday to Senators and Governors from major agriculture states, U.S. President Donald Trump ordered his National Economic Council Chair Larry Kudlow and U.S. Trade Representative Robert Lighthizer to pursue U.S. membership in the recently completed Comprehensive and Progressive Trans-Pacific Partnership or TPP. This move follows the U.S. withdrawal from the agreement during the first week of the Trump presidency in 2017. The agreement, which was signed in early March, includes market access and regulatory cooperation amongst 11 pacific nations including, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.