As everyone keeps asking for the Biden administration to take a proactive approach to trade, U.S. Trade Representative Ambassador Katherine Tai defended the actions this administration is taking. She says these actions may be even more important and effective than negotiating free trade agreements.

Trade is a big focus at this year’s USDA Agricultural Outlook Forum held virtually February 24-25, especially as U.S. agriculture comes off a record trade year in 2021 and USDA is optimistic on ag trade growth in 2022. On Friday morning, Secretary of Agriculture Tom Vilsack sat down for a fireside chat with Tai and asked questions many of us are also wondering. (View the full outlook event here.)

Does agriculture need new free trade agreements?

Vilsack asked Tai whether free trade agreements are the only tool to engage in meaningful discussions with other countries or if there are other mechanisms and steps that are equally important to advance trade opportunities around the world.

Tai responded that although trade agreements, especially comprehensive ones, have been an important component of USTR’s work over the years, it is not the only one available. “It is not our only tool, and it isn’t necessarily our most-effective tool either,” Tai says.

One of USTR’s most critical engagement vehicles include Trade & Investment Framework Agreements – or TIFAs – which provide strategic frameworks and principles for dialogue on trade and investment issues between the United States and trading partners or regions. Tai says the United States has over 40 of these TIFAs. “A lot of the gains we’ve made over the past year have come out of our agenda to intensify our TIFA engagement,” Tai says.

What is the current relationship between the U.S. and China?

Vilsack asked what many in agriculture are wondering. Due to the changing nature of the relationship to China, where does that relationship currently stand?

Tai says the overall relationship with China is an important one, profoundly consequential, complicated and also becoming increasingly complex. She also shares that China is a “rival, it’s a competitor, but it also is a partner in areas where we can establish that kind of trust.”

USTR under Tai’s direction started engagement with China last October focused on reviewing the Phase One agreement and commitments that China made there. With the release of full-year 2021 trade numbers, it is confirmed that China fell short of meeting its promised trade purchases under that agreement.

“We’ve had very direct, honest, respectful conversations with the Chinese since the beginning of October around how we can hold China accountable for these commitments? How do we make good on this agreement? These haven’t been easy conversations; they’ve gotten more difficult overtime,” Tai says.

Tai says in the months forward, USTR will continue its work to press China on the impacts of its policies on U.S. producers and increasingly focus the conversation around how to adapt to a world where China plays by our rules.

“But we cannot make decisions for China. What do we need to do on our behalf to defend the interest of our economy, and very much agricultural stakeholders,” Tai says.

What is the impact of the Ukraine situation for U.S. agricultural trade?

Vilsack notes that Ukraine is the fourth-largest exporter of agricultural products in the world. It exports a considerable amount to China as well as the Middle East, North Africa and Europe. He says the situation between the Ukraine and Russia “will have an impact” and it’s “something we’re going to keep an eye on.”

Tai says USTR will need to work very closely to assess where the impacts of the situation are going to be, especially when it comes to agricultural trade. “We know Ukraine is an agricultural powerhouse, and to think through again how our trade policies take into account the foreign policy needs, but also our domestic economic needs, to ensure that we can be the kind of trading partner that our allies need us to be, and how we take care of our own.”

What is the latest on USMCA as it relates to Canadian dairy and Mexico GMO approvals?

Tai shares that the United States secured a win under the U.S. Mexico Canada Agreement and its enforcement effort to push Canada on the promises it made to U.S. dairy farmers with respect to market access. She notes USTR is aware of how critical these particular agreements were in securing support for the renewal of the North American trade agreement.

“That’s a really important victory for us to have in hand,” Tai says. “We need to continue to push our Canadian partners to make good on the promises based on these findings that we now have from a dispute panel.”

Vilsack and Tai have both raised concerns with their counterparts in Mexico regarding policy pursuing the elimination of genetically modified corn. Tai complimented Vilsack on his strong relationship with the Mexican agricultural secretary, “which has allowed for us to have more frank and more serious conversations than if we didn’t have that bond.”

Tai notes, “The fact of the matter is, I know you know this too, this has a very difficult issue area. And I know our teams that have been working very closely together, including with our industry stakeholders, to examine our options.”

What does an Indo-Pacific framework bring to U.S. agricultural producers?

Tai says partners in the Indo-Pacific region are critical important to U.S. producers, including the powerhouse countries of India, Australia and Japan as well as smaller developing countries such as Thailand, Vietnam and Malaysia.

Tai says right now the Biden administration is working on developing an economic framework with the Indo-Pacific region. “It’s going to be a framework to deepen our economic relationships with the countries and economies in this region and to coordinate our approaches to these global challenges,” she says.

She outlines this will require a focus on several themes including establishing resilience, as well as a conscious focus on sustainability, inclusion and competitiveness.

“I just want to underscore that in terms of the framework that we're building out, we are looking to set standards that promote fair and open competition. And with respect to our farmers, ranchers and agricultural stakeholders, we are looking for ways of engaging with our partners that are focused on inclusive growth,” Tai says.