August 2, 2018
On Wednesday, August 1 Gary and Ryan met with members of the Senate Committee on Agriculture, Nutrition and Forestry to update Committee members on the China trade and NAEGA’s ongoing efforts to mitigate the effects of the foreign material designation on phytos of U.S. origin soybeans. As reported in last week’s outreach, NAEGA is continuing its focus on the U.S. China trade environment armed with new analysis and action plans.
Recent analysis includes.
- An examination of the Grain Standards Act to provide for an understanding that grade quality factors, like Foreign Material (F.M.), are inappropriate and misleading as health and safety designations like APHIS is using on phyto-sanitary certificates for U.S. Soybeans to China. In addition, the application of factors in this way is having a detrimental impact on competition and price. The U.S. Grain Standards Act makes it clear that non-grade factors are not to be used in a misleading fashion. Regarding the “Use of official grade designations required” and “false or misleading grade designations for grain shipped out of the United States,” the act states that “(b) No person shall, in any sale, offer for sale, or consignment for sale, of any grain which involves the shipment of such grain from the United States to any place outside thereof, knowingly describe such grain by any official grade designation, or other description, which is false or misleading.”
- Informa Study on the impact of the APHIS imposition of the Additional Declaration
- NGFA Study on price impact of imposition of the additional declaration
Moving forward, NAEGA is:
- Responding to the USDA FGIS request for input on Standard for Soybeans, Canola and Corn. Timing of this consideration changes to the Official U.S. Grain Standards is excellent given the misleading use of the Standard’s soybean grade factor on Phytos for China.
- Working with FAS Trade Promotion Program authority to provide for a “Global Broad-based Initiative” (GBI) to address the China NTB dilemma. China has broadly articulated some of its needs in the form of its Decree 177 Import and Export measures for grain which suggest exporter nations present “protocols” to provide for compliance. But China has provided insufficient details and has demonstrated a lack of appreciation for sound science and due process in its regulatory measures as well a very limited understand of safe, innovative and competitive capacity of the U.S. production and marketing system. The USDA APHIS is attempting to deploy a systems approach related to one concern of Chinese regulators related weed seeds. If successful, the APHIS weed seed solution could be incorporated into the GBI. The GBI will provide for studies and development of an aligned strategy to achieve the goal of mitigating China’s Non-tariff barriers to grains and oilseeds by providing for information to demonstrate how the U.S. and China value chain meets China’s import requirements. This could be undertaken for multiple crops or start with soybeans. Via a contract with capable and respected third-party project consultancy the follow steps will be integral to the GBI and include the following steps
- Conduct a thorough review of all relevant studies and surveys already conducted.
- Establish and conduct a robust analysis of the respective outcomes related to China’s concerns to more completely understand the entire system. For example, the APHIS systems approach includes an effort to measure and understand weed seeds and foreign material is now being contemplated and includes sampling and testing along the U.S. supply chain.
- Document all aspects of the production, trade and consumption of the respective grain or oilseeds being addressed, including but not limited to, regulatory measures as well as commercial practices that are employed throughout to production and marketing value chain through to Chinese processing and use.
- Provide for a report and recommendations on how to provide for an aligned strategy to mitigate China’s non-tariff barriers to grains and oilseeds.
- Finally, we are working with colleagues to communicate the negative impact of both tariffs and non-tariff measures in reaction the current geopolitcal environment that includes aggressive use of increased tariffs.
We continue to request your advice and questions.