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Growing Trade Relationships

April 9, 2021
Column

Over the last four years, we have seen our trade relationships and trade agreements updated at record rates. Now with Ambassador Katherine Tai, who most recently served on the staff of the House Ways and Means Committee, sworn in as the new United States Trade Representative, it is time to hit the ground running and pick up where the previous administration left off by leveling the playing field with our trade partners, improving market access for U.S. goods, and finalizing pending free trade agreements.

In March, Ambassador Tai was unanimously confirmed by the Senate. This overwhelming support is a testament to the work she has done throughout her career, opening markets and holding China accountable. However, I am concerned the current agenda coming out of the White House has trade relationships taking a backseat to domestic stimulus. What they fail to understand is that these priorities are not mutually exclusive. International trade is a powerful tool which bolsters our domestic economy by increasing wages for workers and lowering costs for both companies and consumers. Looking at Nebraska, international trade supported one in five jobs for our state in 2018 and exports of goods and services accounted for an estimated 10% of our state’s gross domestic product.

China continues to be an opportunity for growth, but also requires more scrutiny and accountability. Following the signing of the China Phase One deal, 2020 was a record setting year, with the U.S. exporting $29 billion worth of agriculture goods and products to China and getting improved access overall. However, China is still behind on fulfilling its agriculture purchase commitment by 28% so far this year. For example, to keep pace, China needed to purchase $8.1 billion worth of U.S. agriculture exports in February but only bought $5.8 billion. It is critical that USTR holds China accountable to its commitments and continues working to address ongoing ways China violates international trade rules as a non-market economy.

I am once again co-chair of the United States-Japan Congressional Caucus, and I remain committed to growing the success we have seen so far from the Phase One U.S.-Japan trade agreement. Japan is Nebraska’s third largest overall market and number one market for agriculture products. In 2019 alone, Japan bought $1 billion worth of agriculture exports from Nebraska and was the top destination for Nebraska beef and pork products. With Japanese Prime Minister Yoshihide Suga meeting with President Biden this month, the current administration should use this visit to discuss ways to reach a comprehensive deal with Japan and support regional competition that will counter China.

While we must maintain and build upon our progress made with China and Japan, we also need to complete trade deals with the United Kingdom (UK) and Kenya. A free trade agreement with the UK does not just offer an opportunity to solidify a trading relationship with one of our closest allies. If we do not finalize an agreement soon, the UK will be pushed closer to the European Union and its protectionist agriculture policies. A free trade agreement with Kenya is also important. In addition to further aligning trade priorities between the United States and Kenya, it also represents an incredible opportunity to set a marker for additional high-standard trade agreements with other nations on the African continent.

Without a doubt, the USTR under President Biden needs to improve, finalize, and enforce trade agreements, but Congress also has a part to play. In December we saw the Generalized System of Preferences and Miscellaneous Tariff Bill expire because Democrats put political messaging ahead of temporarily renewing these laws while providing additional time to consider improved, long-term reauthorizations. That is unacceptable and we cannot allow this to become a pattern.

Trade Promotion Authority (TPA), which allows presidents to negotiate free trade agreements in consultation and with oversight from Congress, expires July 1 and with it, our ability to negotiate trade agreements efficiently. I was supportive of TPA’s reauthorization in 2015 and continue to be supportive because it addresses the constitutional duties of the President to conduct policy and of Congress to set tariff and trade policy while establishing a process for Congress to expeditiously and thoroughly consider completed agreements. We have already seen critical deadlines pass this year, like the ability to get a free trade agreement with the UK and Kenya using the existing version of TPA. We need to have the tough conversations now so that our country’s trade, and with it our economy, can flourish.

There is still a lot of pending work the previous administration began that would benefit American consumers, businesses, and agriculture if completed. We cannot afford to let our hard work go to waste. The American economy depends on action and I encourage Ambassador Katherine Tai to utilize her new role as the United States Trade Representative to build on the successes of the last four years. With Nebraska being the fifth largest exporter of agriculture products and the Third District of Nebraska, the largest agricultural producing congressional district, rest assured I will continue advocating on behalf of our farmers and ranchers by encouraging the growth of our nation’s trade relationships.

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