[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                      TRADE POLICY AND PRIORITIES

=======================================================================

                                HEARING

                               BEFORE THE

           SUBCOMMITTEE ON LIVESTOCK AND FOREIGN AGRICULTURE

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 17, 2021

                               __________

                           Serial No. 117-23
                           
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          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov

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                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
47-126 PDF                 WASHINGTON : 2022                     
          
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                        COMMITTEE ON AGRICULTURE

                     DAVID SCOTT, Georgia, Chairman

JIM COSTA, California                GLENN THOMPSON, Pennsylvania, 
JAMES P. McGOVERN, Massachusetts     Ranking Minority Member
FILEMON VELA, Texas                  AUSTIN SCOTT, Georgia
ALMA S. ADAMS, North Carolina, Vice  ERIC A. ``RICK'' CRAWFORD, 
Chair                                Arkansas
ABIGAIL DAVIS SPANBERGER, Virginia   SCOTT DesJARLAIS, Tennessee
JAHANA HAYES, Connecticut            VICKY HARTZLER, Missouri
ANTONIO DELGADO, New York            DOUG LaMALFA, California
BOBBY L. RUSH, Illinois              RODNEY DAVIS, Illinois
CHELLIE PINGREE, Maine               RICK W. ALLEN, Georgia
GREGORIO KILILI CAMACHO SABLAN,      DAVID ROUZER, North Carolina
Northern Mariana Islands             TRENT KELLY, Mississippi
ANN M. KUSTER, New Hampshire         DON BACON, Nebraska
CHERI BUSTOS, Illinois               DUSTY JOHNSON, South Dakota
SEAN PATRICK MALONEY, New York       JAMES R. BAIRD, Indiana
STACEY E. PLASKETT, Virgin Islands   JIM HAGEDORN, Minnesota
TOM O'HALLERAN, Arizona              CHRIS JACOBS, New York
SALUD O. CARBAJAL, California        TROY BALDERSON, Ohio
RO KHANNA, California                MICHAEL CLOUD, Texas
AL LAWSON, Jr., Florida              TRACEY MANN, Kansas
J. LUIS CORREA, California           RANDY FEENSTRA, Iowa
ANGIE CRAIG, Minnesota               MARY E. MILLER, Illinois
JOSH HARDER, California              BARRY MOORE, Alabama
CYNTHIA AXNE, Iowa                   KAT CAMMACK, Florida
KIM SCHRIER, Washington              MICHELLE FISCHBACH, Minnesota
JIMMY PANETTA, California            JULIA LETLOW, Louisiana
ANN KIRKPATRICK, Arizona
SANFORD D. BISHOP, Jr., Georgia

                                 ______

                      Anne Simmons, Staff Director

                 Parish Braden, Minority Staff Director

                                 ______

           Subcommittee on Livestock and Foreign Agriculture

                    JIM COSTA, California, Chairman

ABIGAIL DAVIS SPANBERGER, Virginia   DUSTY JOHNSON, South Dakota, 
JAHANA HAYES, Connecticut            Ranking Minority Member
J. LUIS CORREA, California           SCOTT DesJARLAIS, Tennessee
JOSH HARDER, California              VICKY HARTZLER, Missouri
RO KHANNA, California                DAVID ROUZER, North Carolina
CYNTHIA AXNE, Iowa                   TRENT KELLY, Mississippi
BOBBY L. RUSH, Illinois              DON BACON, Nebraska
STACEY E. PLASKETT, Virgin Islands   JAMES R. BAIRD, Indiana
ANGIE CRAIG, Minnesota               JIM HAGEDORN, Minnesota
SANFORD D. BISHOP, Jr., Georgia      TRACEY MANN, Kansas
------                               RANDY FEENSTRA, Iowa
                                     BARRY MOORE, Alabama

              Daniel Feingold, Subcommittee Staff Director

                                  (ii)
                                  
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Costa, Hon. Jim, a Representative in Congress from California, 
  opening statement..............................................     1
    Prepared statement...........................................     3
Johnson, Hon. Dusty, a Representative in Congress from South 
  Dakota, opening statement......................................     4
Thompson, Hon. Glenn, a Representative in Congress from 
  Pennsylvania, opening statement................................     6

                               Witnesses

Stenderup, Kent, Managing Partner, Stenderup Ag Partners; Member, 
  Board of Directors, Blue Diamond Growers, Bakersfield, CA......     7
    Prepared statement...........................................     9
Vander Woude, Simon, Dairyman, Member-Owner and Chairman, Board 
  of Directors, California Dairies, Inc.; First Vice Chairman, 
  Executive Committee, National Milk Producers Federation, 
  Merced, CA.....................................................    13
    Prepared statement...........................................    15
Redhouse, Latashia, Director, American Indian Foods Program, 
  Intertribal Agriculture Council, Vernal, UT....................    23
    Prepared statement...........................................    25
Sorenson, Jen, President, National Pork Producers Council, 
  Washington, D.C................................................    28
    Prepared statement...........................................    29
Scott, Kevin, President, American Soybean Association, St. Louis, 
  MO.............................................................    34
    Prepared statement...........................................    36

                           Submitted Material

Gallo, Sarah, Vice President, Agriculture and Environment, 
  Biotechnology Innovation Organization, submitted letter........    63

 
                      TRADE POLICY AND PRIORITIES

                              ----------                              


                      WEDNESDAY, NOVEMBER 17, 2021

                  House of Representatives,
         Subcommittee on Livestock and Foreign Agriculture,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:02 a.m., in 
Room 1300 of the Longworth House Office Building and via Zoom, 
Hon. Jim Costa [Chairman of the Subcommittee] presiding.
    Members present: Representatives Costa, Spanberger, Hayes, 
Harder, Khanna, Axne, Rush, Plaskett, Craig, Bishop, Johnson, 
DesJarlais, Hartzler, Rouzer, Kelly, Bacon, Hagedorn, Mann, 
Feenstra, Moore, and Thompson (ex officio).
    Staff present: Lyron Blum-Evitts, Daniel Feingold, Prescott 
Martin III, Caleb Crosswhite, Jennifer Tiller, Erin Wilson, and 
Dana Sandman.

   OPENING STATEMENT OF HON. JIM COSTA, A REPRESENTATIVE IN 
                    CONGRESS FROM CALIFORNIA

    The Chairman. The Subcommittee on Livestock and Foreign 
Agriculture will now come to order. I want to thank my 
colleagues, Members of the Subcommittee, for their 
participation this morning. The topic that is going to be 
discussed is trade policy and priorities, which, for American 
agriculture, is always a critical issue that we are engaged in. 
And, as we look at the challenges that we face with American 
agricultural trade over the last decade, I would say, and then 
prior to the pandemic, and then the effects of our supply chain 
being turned upside down with the closure of restaurants and 
schools. Last spring we have seen how fragile that very 
complicated, complex food supply chain can turn on its head, 
and of course the impact to prices in terms of not only our 
producers and processors throughout the country, but our 
consumers, who feel them when they are at the grocery store. 
And, of course, we see that being impacted today, and I am sure 
that will be part of the conversation that we have.
    I want to thank Members of the Subcommittee for your 
participation, and I want to thank the witnesses as well. We 
have four witnesses that will provide a good regional 
perspective of how they view the trade policy and priorities, 
and make good suggestions to all of us. And, after my opening 
remarks, we will receive testimony from our witnesses, and 
then, following our normal procedure, we will recognize Members 
based upon alternating Democratic, Republican, Democratic, 
Republican, after the testimony has been presented to us. 
Members will be recognized in the order of their arrival that 
staff will inform me on what their order of arrival was, and I 
will rely on that to be the judgment.
    And, of course, everybody is familiar with the 5 minutes 
you have to ask questions or make statements. Sometimes Members 
like to do both. But obviously, given the hybrid manner in 
which this hearing is being held, those who are participating 
from your desktop, or wherever you might be, please mute 
yourself. We all sometimes forget that we are multitasking, and 
you may be doing something else, and you are live, and that, 
obviously, is not helpful for the Subcommittee's hearing 
purpose.
    In consultation with the Ranking Member, my friend from 
South Dakota, pursuant to Rule XI(e), I want to make the 
Members of the Subcommittee aware that we may have Members of 
the full Committee join us today, and oftentimes the Chairman 
and the Ranking Member do that, and when they do, we certainly 
give them the opportunity to comment. So, without objection, 
the Chair may recess the Committee, subject to call of order of 
the Chair at any point during this hearing. It is an 
informational hearing. I don't think we are going to get into 
any big disputes that that would be required. So let me start 
with my opening statement.
    I would like to thank our witnesses in advance. We know 
that trade is a critical part of American agriculture. We held 
a hearing on this last month. We are listening to some of the 
impacts that the--problems with--our supply chain are having in 
terms of not only getting products into our country, but also 
the fact, as an example, the Port of Los Angeles and Long Beach 
that handle 40 percent of the container imports that we find, 
that, unfortunately, some of those containers ships are 
departing empty, and I think that is a challenge that we have 
to address.
    The President, obviously, has attempted to focus on making 
changes to that effect. There are pieces of legislation that 
are attempting to try to relieve this bottleneck that we are 
having within our supply chain. But when you look at, again, my 
home state as an example, 44 percent of the agriculture that we 
produce in California is exported. That is a big number, it is 
almost half. And a lot of these products have a shelf life, in 
terms their perishable nature, and the notion that they can 
simply wait is not acceptable.
    This hearing today presents an opportunity for us to hear 
from a diverse group of agricultural stakeholders about their 
trade priorities and barriers that they face, and it is 
important for we, as Members of Congress, and this 
Subcommittee, that focuses not just on livestock but foreign 
trade, that we are listening to, and do, whatever we possibly 
can to deal with these current challenges. And I think when we 
talk about the efforts that the Biden Administration is 
following, how we can complement those efforts.
    I want to acknowledge that our witnesses' testimony on 
supply chain concerns were raised multiple times last month. 
This issue has been focused on. We are still--I don't think we 
completely have a handle on all the things I think we need to 
be doing to deal with this critical supply chain problem, but I 
think we need to continue to be focused, and remind people of 
the importance of remedying this problem. And these slowdowns 
just don't impact consumers, but they hurt our farmers, our 
dairymen and -women, our agricultural workers. It has a ripple 
effect that obviously we are feeling today.
    Constructing a productive agricultural trade agenda is 
important, whether it was the last Administration or this 
Administration, and I think that with the incredible production 
that American agriculture is capable of producing, we need to 
make sure that we work hand in glove with American agriculture, 
and different challenges we know are being faced by farmers in 
different regions of our country. So that is why I am looking 
forward to hearing from the witnesses today on how we can 
better improve our trade policy from over the past few years.
    We have engaged in a number of agreements, talks with 
nations around the world, including Japan, China, Canada, and 
Mexico. Exciting news that we have reached an agreement with 
Japan, that I think the Administration is announcing today, on 
how we can coordinate that effort. I was a supporter of the 
Trans-Pacific Partnership some 4 or 5 years ago that was worked 
on by multiple Administrations, and unfortunately we dropped 
out of that, in my view. But I did support the previous 
Administration's efforts with the U.S.-Canada-Mexico Trade 
Agreement. Obviously, now we need to make sure that the 
commitments from that trade agreement are complied with, 
whether we are talking about phytosanitary standards, or a host 
of other efforts between our neighbors to the north, and to the 
south, Canada and Mexico.
    Now we find ourselves in a situation where China's 
continuously changing regulations that cover the rules of 
engagement for U.S. food and agricultural business is once 
again staring us in the eye. The expanded registration 
requirements for U.S. facilities under Decree 248 is just one 
example, and I think these relationships need to be worked on. 
I am pleased this week that the Biden Administration had a 
high-level discussion, and the fact is, is that we have to stay 
on top of this.
    Agriculture and trade must be considered as we look at the 
global adoption of sustainable alternatives not only to reduce 
greenhouse gas emissions as it relates to climate change, but 
many of the people on the panel that are testifying will tell 
you incredible things that they are doing to, in fact, reduce 
their own carbon footprint. I look forward to hearing how these 
initiatives may be advanced through trade. The panel before us 
has in-depth knowledge. I have read their testimony, look 
forward to hearing it, and asking questions. So I think this is 
a good point of productive discussion on how we can expand 
global trade.
    [The prepared statement of Mr. Costa follows:]

Prepared Statement of Hon. Jim Costa, a Representative in Congress from 
                               California
    Good morning. To start I'd like to thank our witnesses, Ranking 
Member Johnson, and the other Members of the Subcommittee. Trade is a 
vital part of our agriculture industry here in the United States. It is 
an essential tool for our farmers and ranchers and so many rely on 
strong trade relationships to ensure fair access to the global 
marketplace.
    This hearing presents a great opportunity to hear from a diverse 
group of agricultural stakeholders about their trade priorities and the 
barriers they face to help keep us as Members of Congress aware and 
informed as we continue to discuss the agricultural trade policy 
strategy. We can then use that information to work with our 
counterparts abroad, and the Biden Administration, to develop a trade 
agenda that benefits farmers.
    I want to acknowledge that in our witness's testimony supply chain 
concerns were raised multiple times. This is an issue that I have been 
very focused on and I know that we have had a few hearings on supply 
chain concerns in the Agriculture Committee, but I think it is 
important to continually remind people of the importance of remedying 
this problem. These slowdowns don't just impact end-consumers, they 
also hurt farmers and trade flows.
    Constructing a productive agricultural trade agenda is important 
for many reasons. My home State of California is a great example of the 
range of agricultural products that are grown and exported from the 
United States. California is the most diverse agricultural state, it is 
the number one state in citrus production, provides close to 20 percent 
of American dairy production and provides 99 percent of the country's 
pistachios and 80 percent of the world's almonds. Having such a wide 
range of products within my state has given me perspective on the 
different challenges that farmers face.
    That is one reason why I am looking forward to hearing from our 
witnesses today. We have an opportunity to hear from a range of 
commodity groups on how trade policy effects their products and how we 
can improve and alter our trade agreements to benefit a broad swath of 
American producers.
    Over the past few years, we have engaged in a number of trade 
agreements and talks with nations around the world, including Japan, 
China, Canada, and Mexico. It is vital that we learn from those 
agreements what has benefited farmers, and what may need improvement as 
the new Administration reviews the performance of these trading 
relationships. And the trade issues that arise are changing all of the 
time--such as China's continuously changing regulations that govern the 
rules of engagement for U.S. food and agricultural businesses. The 
expanded registration requirement for U.S. facilities under Decree 248 
is just one example that I've been hearing about recently. So, these 
relationships require constant nurturing. I'm pleased that this week 
alone, the Biden Administration is engaged in high level meetings with 
all of the nations I just mentioned.
    Another issue that I believe must be a part of every discussion is 
climate change. When we think about agriculture and trade, we must 
consider how we can advance global adoption of sustainable alternatives 
to reduce greenhouse gas emissions. I know that many of the 
organizations represented on today's panel have worked to improve their 
sustainability and set goals for continuous improvement. I look forward 
to hearing how those initiatives may be advanced through trade.
    The panel before us provides a depth of knowledge and varied 
perspective on how our trade agenda can benefit American farmers and 
ranchers.
    I look forward to a good and productive discussion on how we can 
all work together to expand global access to American agricultural 
goods. Before the introduction of our witnesses, I'd like to recognize 
the Ranking Member, Mr. Johnson of South Dakota, for any remarks he'd 
like to make.

    The Chairman. And I would like to recognize my friend, the 
Ranking Member from South Dakota, Mr. Johnson, for any remarks 
he would like to make at this time.

 OPENING STATEMENT OF HON. DUSTY JOHNSON, A REPRESENTATIVE IN 
                   CONGRESS FROM SOUTH DAKOTA

    Mr. Johnson. Thank you, Mr. Chairman. I want to thank you 
also for this hearing, and for the topic. It is hard to 
overstate the importance of market access to American 
agricultural producers, so thank you to you and the Committee 
staff. Of course, thank you also to the witnesses before us.
    American farmers and ranchers, they produce the highest 
quality crops, livestock, poultry, and dairy in the world, and, 
not for nothing, they produce them efficiently. That value 
proposition is well known across the globe, and that is why 20 
percent of American agriculture production is exported. And 
since we have one of the nation's foremost leaders in soybeans 
with us today, I should note that that is doubly true for 
soybeans. Half of America's soybeans, and 60 percent of South 
Dakota's soybeans, are sold overseas.
    And that international demand, of course, that exerts 
upward pressure on price. That means billions, billions of 
dollars for American producers. Trade accounts for an average 
of $56 of value for each hog marketed in this country. You just 
think about how much real money that is, and how that ripples 
throughout rural economies, from the farmgate to main street. 
Just an enormous impact.
    So the price American farmers and ranchers receive for 
their production depends, in no small part, on the strength of 
America as an exporter, and, frankly, as a negotiator. Can we 
secure fair deals with other countries? And at the end of the 
last Administration we made some positive progress on a Phase 
One agreement that included numerous sanitary, and 
phytosanitary, and biotech provisions that increase the 
accessibility and the predictability in the Chinese market. 
Again, critically important. And we don't want to let that 
progress get lost between Administrations, and so we want to 
continue to be proactive and ambitious.
    An important step here would be for this Administration to 
prioritize trade, and our trading relationships, and work to 
give agriculture a better seat at the table. This 
Administration's approach to trade, it has to become more 
ambitious, because every day that our country doesn't lead, 
others will fill the gap. It took, I think we all realize, 9 
months for a Chief Agricultural Negotiator to get appointed, 
and we are still awaiting a nominee for Under Secretary of 
Foreign and Agricultural Affairs. And I think it is important 
that the priorities of all of our witnesses, and frankly, 
American agricultural producers across the country, are 
represented as we are talking about expanded market access, 
increased exports, and a more level playing field.
    And then I think the Chairman did a good job mentioning the 
supply chain, so I will touch on that. This Administration must 
continue to seek pragmatic solutions to the supply chain 
crisis, which is putting a serious strain on our American 
agricultural producers, and, frankly, the entire U.S. economy. 
The full Committee heard from a slate of witnesses a few weeks 
ago about the combination of challenges contributing to the 
crisis, and the breaking of consumer confidence, that includes 
the repercussions of that, and the cause of that, can be 
increased inflation, skyrocketing energy cost, a shortage of 
available goods and labor.
    And while our supply chain falters, our trading 
relationships falter. I am glad to hear many of our witnesses 
will be speaking to the importance of passing the Ocean 
Shipping Reform Act of 2021 (H.R. 4996), which I am leading 
with Representative Garamendi. And I am grateful for the 
support of so many on this Committee for that legislation, and 
it is that support, that growing support, more than 200 
national organizations, last time I checked, more than 70 
Members of the House that is going to keep that momentum 
building.
    So, by way of closing, Mr. Chairman, I would just note I am 
looking forward to the remarks of our witnesses, and to 
learning about their priorities, as well as their thoughts for 
how we can move forward. Thank you, sir.
    The Chairman. I thank the gentlemen for his opening 
comments, and I just want to note that Congressman Garamendi 
and I began working on that effort with the legislation to make 
changes in ocean shipping and Federal Maritime Commission, and 
how they operate, and on the issues of demurrage, and also some 
of the other problems that we are having at our ports and 
harbors. And I want to thank the Ranking Member for his 
efforts, along with mine, with the Problem Solvers' Caucus to 
get their endorsement on that important legislation. It is part 
of an overall effort that I think we have to be engaged in.
    The Chair will now recognize, if the gentleman from 
Pennsylvania would like to make any opening comments. If not, 
we will proceed onto our witnesses.

 OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN 
                   CONGRESS FROM PENNSYLVANIA

    Mr. Thompson. No, I absolutely would like to make some 
opening comments. Thank you, Mr. Chairman, Ranking Member, this 
important hearing, is critically important. I echo the 
sentiment of Ranking Member Johnson, and echo his calls for 
this Administration to prioritize trade. We know that in the 
Great Recession, 2009, it was trade that resulted in 
agriculture being the only industry that did not really fail 
and falter the way that others did. And it is so incredibly 
important.
    I also ask my colleagues to commit to hosting Ambassador 
Tai sooner than later, and once approved, our Chief Agriculture 
Negotiator. We need those voices at the table. It is long 
overdue. Yes, we need to have them before the full Agriculture 
Committee so we can have a good conversation, and to be able to 
work with them in a committed way for trade.
    We need our trading partners to stand by their existing 
commitments, and we have issues with that. Recent travels in 
Georgia, Florida, there are some abuses that Mexico is doing in 
and around--circumventing the USMCA, really hurting our fruits 
and vegetables, and our trading partners need to be held 
accountable. On the Northern Tier, where I hail from, it is 
Canada circumventing a great change to their isolationist dairy 
policy, which they did eliminate what we asked them to 
eliminate, but then they created, like, a IVa to circumvent it, 
and that is not acceptable.
    The Chairman. Right.
    Mr. Thompson. And it is really disturbing that we don't 
have, as of yet, an official Chief Agriculture Trade 
Negotiator, because they needed to be at the table to help with 
the oversight of that. And so the Administration needs to step 
up and work overtime to mitigate the many problems impacting 
our supply chains, much of which impacts our exports, and the 
viability of our producers.
    I have been a little, actually, disturbed with all the 
conversation coming out of the White House, and they are 
focused on those--what looks like the Japanese armada parked 
off the coast of your great state, Mr. Chairman, with the focus 
being how fast can we go unload those foreign manufactured 
goods, get them on trucks, so that Americans can buy them, and 
then we are sending--what seems to be happening is--and maybe 
we will hear a little more about this today--we have these 
shipping containers going back empty, while we have agriculture 
commodities sitting at the ports, paying fees to be staged 
there. And so we need the Administration to wake up and to 
recognize it is shipping both ways. It is just not getting them 
unloaded and distributing those foreign manufactured goods, but 
we need to be able to have--be shipping our commodities, our 
agriculture commodities, those things that those great 
Americans, those American farmers, and ranchers, and foresters, 
produce each and every day.
    I may have to step out here. I actually have a meeting with 
the Chairman of the full Committee, and I apologize for that, 
but I look forward to further reviewing witness' testimony, and 
gathering information from the responses to Member questions. 
And with that, I yield back.
    The Chairman. Well, I thank the Ranking Member for his 
comments, and let me just assure you that in my conversations 
with the Secretary of Agriculture, they are very acutely aware 
of the situation with the container problem, and we brought 
this to their attention earlier this year. It is one of the 
reasons this legislation that we are supporting with 
Congressman Garamendi is important, so that we can have various 
options to prevent these ships from returning empty. Everyone 
recognizes that is a problem, and we intend to do something 
about that. As far as getting Ambassador Tai before the full 
Committee or the Subcommittee, we are working on both, and I--
for all the right reasons that you articulated.
    And finally, there is a bit of a two-way street, I believe, 
and that is that, while the Administration has moved with 
nominations, the Senate has a clock of their own, it seems as 
it comes to confirming these appointments, and so that is part 
of the challenge that we face. And so, with that said, let us 
begin with our first witness. Mr. Kent Stenderup is a third-
generation farmer in Arvin, California, in the southern San 
Joaquin Valley. Prior to the last reapportionment, I used to 
represent him, and the incredible producers down in that 
portion of Kern County. Their family operation is well known, 
third generation farm. It consists of a diversified 
agricultural portfolio that includes trees, vines, and row 
crops. He and his family have for years participated in many 
different ways. He is a Board Director of Blue Diamond Growers, 
and he is testifying on their behalf. So, without further ado, 
I would like to recognize our first witness for 5 minutes, Mr. 
Kent Stenderup. Kent?

  STATEMENT OF KENT STENDERUP, MANAGING PARTNER, STENDERUP AG 
                  PARTNERS; MEMBER, BOARD OF 
        DIRECTORS, BLUE DIAMOND GROWERS, BAKERSFIELD, CA

    Mr. Stenderup. Good morning, Mr. Chairman, and Members of 
the Committee. Thank you for holding this timely hearing on 
this very important subject. My family has been honored to have 
Chairman Costa as our Assemblyman, and also as our Congressman 
for a few terms.
    The Chairman. It is good to see you in those golden fields 
of Arvin.
    Mr. Stenderup. Yes, that is being hopeful. It happens once 
every 5 years. We get snow down to about--feet.
    The Chairman. Right.
    Mr. Stenderup. Also, welcoming Member Josh Harder, who is a 
very important ag leader in our valley also. As it is been 
mentioned, I am Kent Stenderup, and I am the Managing Partner 
for the family farm. We have 800 acres of almonds, 900 acres of 
row crops. We also grow some Thompson seedless grapes that are 
used for white grape juice concentrate, and that concentrate is 
non-added sugar for a non-corn fructose natural sweetener. It 
is used for jams, jellies, and fruit juices, and we are in 
the--and the way that our growers co-op, I happen to be on that 
co-op board also. We are in the process of filing a 
countervailing and dumping charge against Argentina with the 
Department of Commerce and the USTR.
    So as you can hear, my family believes in the co-op 
business model, but, I am here today to testify on behalf of 
Blue Diamond Growers as a Director and Grower Member. Blue 
Diamond Growers is a nonprofit grower-owned cooperative 
organized in the year 1910. Over half of the 6,000 almond 
growers in California belong to Blue Diamond Growers. I am the 
immediate past Chair of the Almond Board of California, which 
is the Federal Marketing Order overseen by USDA that benefits 
our industry. It is very much appreciated that you are holding 
this important trade hearing on policy and priorities. Trade is 
the lifeblood of U.S. ag.
    Blue Diamond is the world's leading almond marketer and 
processor. We employ over 1,900 employees, with our 
headquarters in Sacramento. Blue Diamond ships almonds to all 
50 states, and also including India, Spain, China, Japan, just 
to name a few destinations. And yes, we too support Elaine 
Trevino as the Ag Trade Ambassador at USTR. The President 
nominated her, and now we hope the Senate will confirm her. She 
has agricultural support. Get those markets open worldwide. And 
also the empty position at the Under Secretary of Trade and 
Foreign Ag.
    It is important that the Committee support the Foreign 
Agricultural Service as much as possible. This Committee is 
encouraged to do all possible and necessary to support FAS, its 
employees, and its necessary budget. It is hoped and 
recommended that the Committee recognize the importance and 
benefit that U.S. agriculture receives from the Market Access 
Program, also known as MAP. The program is an outstanding 
example of the real partnership between government and ag 
exporters. If you are not familiar, this is an important cost-
sharing program. This program helps our members promote and 
advertise in countries where it would not otherwise be 
possible.
    Since Blue Diamond sells and exports its members' almonds 
under the Blue Diamond brand, it is penalized with stricter 
rules and increased matching requirements. This is the Trade 
Association having those benefits over something known as a co-
op model. May it be respectfully suggested that this Committee 
investigate this, and correct this difference? Cooperative 
farmers should not be treated differently than farmers whose 
products are promoted by the trade associations. This 
discrimination should end, and will with your help.
    Mr. Chairman, and Members of the Committee, thank you very 
much for the opportunity to present this testimony, and for 
your attention. I will be pleased to answer any questions you 
may have. Thank you.
    [The prepared statement of Mr. Stenderup follows:]

 Prepared Statement of Kent Stenderup, Managing Partner, Stenderup Ag 
      Partners; Member, Board of Directors, Blue Diamond Growers, 
                            Bakersfield, CA
    Mr. Chairman and Members of this Committee, thank you for holding 
this timely hearing on this very important subject. It is appreciated.
    My name is Kent Stenderup, and I am the managing Partner of 
Stenderup Ag Partners, a family-owned farm in Arvin, California. We 
grow 850 acres of almonds, 900 acres of row crops including potatoes, 
carrots, sweet potatoes, processing tomatoes and processing onions.
    We also grow 420 acres of Thompson Seedless grapes. These are 
processed into the best white grape juice concentrate available. White 
grape juice concentrate is in high demand as a non-added-sugar, non-
corn fructose natural sweetener. It is used as an ingredient in a 
variety of products such as jams, jellies, fruit juices, confectionery 
products, energy bars and more.
    I am here today to testify on behalf of Blue Diamond Growers and as 
a director and grower member. Blue Diamond Growers is a nonprofit 
grower owned cooperative which was organized in 1910. This year is our 
111th anniversary. Over half the 6,000 almond growers in California 
belong to Blue Diamond Growers.
    For your background, I am also a Director of Delano Growers Grape 
Products cooperative and have a strong background in the specialty crop 
and fresh produce sectors.
    I am the immediate past President of the Almond Board of 
California, which is the Federal Marketing Order overseen by USDA that 
benefits our almond industry.
    It is very much appreciated that you are holding this important 
hearing on Trade Policy and Priorities, since trade is the life blood 
of U.S. agriculture and the California almond industry. Blue Diamond 
exports its members almonds to over 100 countries worldwide.
    Blue Diamond is the world's leading almond marketer and processor. 
We employ over 1,900 employees. The average size of our family farm 
members is under 100 acres. Its headquarters is in Sacramento, 
California. We have processing plants in Sacramento, Salida and 
Turlock. Our grower members deliver their almonds to our receiving 
stations in Sacramento, Salida, Chico, Arbuckle, and Fresno.
    Blue Diamond almonds are sent to all 50 states and to India, Spain, 
Germany, China/Hong Kong, UAE, Japan, Italy, and the Netherlands to 
name the top ten destinations. Of course, both Canada and Mexico are 
very good markets. Worldwide, Blue Diamond exports almonds and almond 
products to over 100 countries.
    With your permission, may the next few minutes be focused on 
important trade issues that it is urged this Committee address. Since 
resolving trade issues is critical to the success of the California 
almond industry and all U.S. agriculture, please direct your attention 
to putting the Agriculture Trade Ambassador in place at USTR. The 
President has nominated Mrs. Elaine Trevino to take this position. She 
is very well qualified and has widespread support in agriculture. While 
it is the job of the Senate to confirm her, it is requested that you do 
all possible to make it happen. This position needs to be filled to 
work on opening markets worldwide.
    Second, the empty position of Under [S]ecretary for Trade and 
Foreign Agriculture Affairs at USDA needs to be filled. The current 
acting Under [S]ecretary is doing an excellent job, but the position 
needs to be filled.
    Please allow me to identify four important markets and the current 
problems in each that need to be addressed by the Agriculture 
Ambassador at USTR and the Under [S]ecretary for Trade at USDA.
    First, it is important to note that the Foreign Agriculture Service 
at USDA and all its foreign offices are doing a wonderful job 
supporting all U.S. agriculture exports and especially California 
almonds. This Committee is encouraged, and it is recommended that it do 
all possible and necessary to support the Foreign Agriculture Service 
all its employees and its necessary budget.
    The three countries and one trading bloc of immediate concern are 
India, China, European Union, and Mexico. Please let me describe the 
situation in each.
India
    India is a critically important market for California almonds, with 
shipments in 2019 valued at approximately $733 million. India is the 
number one export destination for U.S. almonds. California almonds have 
represented the leading agricultural product traded between the two 
countries, and the growth of India's market stands as a testament to 
the cooperative work of the U.S. Government and Blue Diamond over the 
past 4 decades to establish, maintain, and grow this market. A primary 
objective is to eliminate the retaliatory duties currently in place. 
Then the actual duty should be reduced.
    The following table provides an overview of India's current tariff 
structure for in shell and shelled almonds. India currently has imposed 
additional duties on U.S. almonds in retaliation for U.S. actions on 
steel and aluminum. The U.S. has taken this case to the WTO where it is 
pending.

------------------------------------------------------------------------
               Product                              Tariff
------------------------------------------------------------------------
In-Shell Almonds                      42 Rupees/kilogram
Shelled                               120 Rupees/kilogram
Flour/Meal                            30%
Prepared/Preserved                    30%
------------------------------------------------------------------------
Source: World Trade Organization, Tariff Download Facility.

    The following table provides a summary of exports to India in key 
categories over the most recent 4 years (2017-2020).

                  U.S. Exports to India (Value, US$000)
------------------------------------------------------------------------
      Product            2017          2018         2019         2020
------------------------------------------------------------------------
          In-shell        583,623      543,361      691,922      783,492
           Shelled         74,331       56,203       40,831       40,717
       Pres./Prep.            246            0           30          103
------------------------------------------------------------------------

    On July 1, 2017, India implemented a new, nation-wide goods and 
services tax (GST). On the positive side, this action brought new 
transparency and predictability to doing business within India. 
Unfortunately, in implementing the new regime, the government placed 
dried fruits and nuts in a category subject to a 12 percent GST. There 
had been an expectation among the trade that these products would be 
placed in the five percent GST basket, which the Indian Government in 
fact has selectively done for other commodities including cashews, 
walnuts, and raisins. While the new GST regime is not without positive 
elements, as previously noted, it is requested that India will subject 
all dried fruit and nuts, including almonds, equitably to the five 
percent GST level.
China
    China has in the past ranked as the number one almond export 
destination. It is number one, when both direct and indirect channels 
are considered. While China is currently a significant market for 
California almonds, both through direct and indirect channels, the 
country holds significant potential for future market growth, 
particularly if all existing tariffs can be eliminated. The highest 
priority for China must be the elimination of the retaliatory duties 
currently in place. Almonds must be a high priority for duty reduction 
in China.
    The following table provides an overview of China's most favored 
nation (MFN) tariff structure for products within the almond complex. 
It must be noted that China currently imposes additional duties on U.S. 
almond exports.

------------------------------------------------------------------------
               Product                              Tariff
------------------------------------------------------------------------
       In-Shell Almonds                                   55%
                Shelled                                   55%
             Flour/Meal                                   45%
     Prepared/Preserved                                   30%
------------------------------------------------------------------------
Source: World Integrated Trade Solutions.

    The following table provides a summary of exports to China in key 
categories over the most recent 4 years (2017-2020).

                  U.S. Exports to China (Value, US$000)
------------------------------------------------------------------------
      Product            2017          2018         2019         2020
------------------------------------------------------------------------
  In-shell Almonds         24,360       21,138       66,644      149,314
   Shelled Almonds         74,893       98,369      106,536      191,770
Pres./Prep. Almonds         1,687        3,840          841        4,101
------------------------------------------------------------------------

    Australia enjoys preferential tariff access for its almonds under 
its Free Trade Agreement that entered into force in December 2015. The 
following table provides a comparison of the rate charged to U.S. 
products versus like Australian products. As noted, the tariffs on 
Australian products reached zero in January 2019 which gives them a 
definite advantage.

------------------------------------------------------------------------
                   Current      Current     Date When    Date When Duty
    Product       Tariff for   Tariff for   Duty Free       Free for
                     U.S.      Australia     for U.S.       Australia
------------------------------------------------------------------------
In-Shell                 55%           0%          N/A  January 1, 2019
Shelled                  55%           0%          N/A  January 1, 2019
Flour/Meal               45%           0%          N/A  January 1, 2019
Prepared/                30%           0%          N/A  January 1, 2019
 Preserved
------------------------------------------------------------------------

    With the elimination of China's import duties on almonds and almond 
products, it is estimated that direct exports of almonds to China could 
reach $800 million within 5 years. This estimate considers the growing 
demand from China's expanding middle class, together with the increased 
incentive to ship products directly to China. China did grant an 
exclusion for some processed almond products under the existing 
procedure. This exclusion should be granted for all Blue Diamond 
almonds and almond products.
European Union
    The European Union (EU) is both a leading market and, to a lesser 
degree, a competitor for California almonds. While dwarfed by the size 
of U.S. production, Spain is the world's 2nd largest almond producer.
    The following table provides an overview of the most favored nation 
(MFN) duty structure presently facing almonds entering the EU:

------------------------------------------------------------------------
               Product                              Tariff
------------------------------------------------------------------------
In-Shell Almonds                      2% for first 90,000 MT *
                                      5.6% for subsequent volumes
Shelled                               2% for first 90,000 MT *
                                      3.5% for subsequent imports
Flour/Meal                            8.3%
Prepared/Preserved                    9% pkgs > 1kg,
                                      10.2% pkgs < 1kg
------------------------------------------------------------------------
Source: European Commission, Market Access Database.
* The 90,000 MT preferential quota is cumulative for HS tariff lines
  0802.119000 (in-shell) and 0802.129000 (shelled)

    The following table provides a summary of exports to the European 
Union in key categories over the most recent 4 years (2017-2020).

           U.S. Exports to the European Union (Value, US$000)
------------------------------------------------------------------------
      Product            2017          2018         2019         2020
------------------------------------------------------------------------
  In-shell Almonds         37,023       24,884       30,652       19,237
   Shelled Almonds      1,439,716    1,470,911    1,652,394    1,505,155
Pres./Prep. Almonds        10,730       18,317       19,336       16,336
------------------------------------------------------------------------

    The U.S. almond industry had been seeking the elimination of the 
EU's existing tariffs applied to the almond complex on an immediate/
expedited basis. It is requested that this continue to be a high 
priority objective of the U.S. Government. It is estimated that, with 
the elimination of duties, U.S. exports of almonds and almond products 
to the EU could rise to over $2 billion annually within 5 to 7 years. 
The current tariff rate quota was adopted when the EU was much smaller 
and has not been expanded with the new country members of the EU. It 
should be eliminated.
    It is especially important to obtain a zero duty for almond meal 
and almond flour. These two products hold significant export potential.
    The U.S. almond industry remains keenly focused on the EU's complex 
and evolving technical requirements, including in the critical area of 
maximum residue limits (MRLs). As the EU moves to adopt a green deal, 
it is moving to adopt many barriers to trade with no scientific 
justification. It is important to stop the adoption of Amendment 171 
which is intended to protect domestic agricultural production.
Mexico
    A new problem has just arisen in Mexico which needs to be addressed 
quickly. One of Blue Diamond's very successful products is known as 
Almond Breeze. This product is very successful in Mexico and many other 
world markets. This is a plant-based beverage made from almonds and 
satisfies a strong consumer demand for it. Mexico is considering a 
regulation that will require front of package labeling which will be 
hard to comply with considering current package sizes. Changing the 
labeling will be both expensive and not provide the consumer with any 
additional needed information.
    Blue Diamond was a strong supporter of the USMCA. This is an 
important agreement that is beneficial. The new labeling regulation 
proposed impairs some of the benefits of the USMCA.
    It is hoped and recommended that this Committee recognize the 
importance and benefit that U.S. agriculture receives from the Market 
Access Program, often referred to as MAP. This program is an 
outstanding example of a real partnership between government and 
agriculture exports. The success Blue Diamond has had in sharing our 
California almonds with over 100 countries worldwide results in an 
important part from this cost sharing program. This program helps our 
members promote and advertise almonds in many countries where it would 
not otherwise be possible. We thank you for this program and recommend 
it be continued and funding be increased to support additional U.S. 
exports. Increased funding is necessary.
    Since Blue Diamond sells and exports its member almonds under the 
Blue Diamond brand, it is penalized with stricter rules and increased 
matching requirements. Since every U.S. agriculture product exported 
has some person or some companies name on it as it travels overseas, 
there should be no difference in the way all exports are treated. May 
it be respectfully suggested that this Committee investigate this and 
correct this difference. Cooperative farmers should not be treated 
differently than farmers whose products are promoted by trade 
associations. This discrimination should end and will with your help.
    Supply chain issues have been very serious and have been causing 
many delays nationally and internationally. It is not expected that 
these issues will be solved soon, however a crucial aspect of this 
crisis that needs to be addressed are U.S. exports. American exports 
have been significantly hurt by the supply chain challenge and this has 
been directly affecting Blue Diamond's farmers.
    As you know, U.S. exports are a key component of U.S. agriculture. 
California is responsible for exporting 80% of almonds worldwide. With 
these supply chain complications, 80% of the world is affected. 
Further, the U.S. economy relies on the export revenue that comes from 
the almond industry. $11 billion is added to the economy. I am here 
today to express the great need to act and protect not only small 
farmers, but the 80% of the world that relies on those farmers for 
their almonds.
    The route between Asia and California's West Coast is currently 
priced at 15 times higher than the price of the route from the U.S. to 
Asia. Ships are eager to return to Asia, to make the commute back to 
the U.S. This causes ships to leave the American ports empty, rather 
than wait to be loaded with U.S. exports, including Blue Diamond 
almonds. 70% of the Asian destined containers leave the U.S. coast 
without any U.S. products. In September of this year, California was 
exporting \3/4\ of their normal export quantity. This issue is 
heightened by the lack of labor in U.S. ports. Most ports worldwide 
function 24/7, however, U.S. ports only recently, and temporarily, 
agreed to operate 24/7. The Administration, backed by Congress, needs 
to push for port workers and port infrastructure to operate and meet 
demand at rates that match our foreign competitors.
    This is extremely troublesome for U.S. exports. Not only are 
American products not being exported, in turn not making it to foreign 
markets, but foreign markets become accustomed to functioning without 
the American product. The supply chain crisis also brings into question 
American export's reliability and consistency. For example, the almonds 
typically used for the Chinese New Year celebrations will not make it 
to China in time for 2022 due to supply deadlines not met. Bookings 
that were planned for October, were pushed into the middle of November. 
Routes that include transshipment points are delayed; packers are 
discouraged and have been offering discounts to move product into other 
regions. Some buyers are giving up their bookings due to the 
uncertainty. The longer these issues persist, the more doubt that 
arises for America's export capabilities. Also, in the meantime, other 
foreign competitors can fulfill the market that American almonds 
previously fulfilled. While 80% of the world might always rely on 
California for its almonds, Blue Diamond's gluten free aspects can be 
overshadowed. Blue Diamond's almond flour and other gluten free 
products can be replaced by other gluten free flours. The supply chain 
issues are problematic both currently and for future market demand.
    Further, without foreign sales, the U.S. industry becomes saturated 
with excess U.S. products. This encourages wholesale product prices and 
costs the U.S. providers an unlimited amount of money. Freight, 
storage, and demurrage prices have increased. For example, demurrage 
fees have increased by over $15,000. The impact on 2021 has been over 
$25 million and is expected to have the same impact on 2022.
    So far, I have not even addressed the lack of domestic movement. 
While the U.S. industry might have an excess of U.S. products that were 
intended to go abroad, but without the supply chain functioning, no 
product is making it to the U.S. market. Grocery stores are limited in 
supply, and U.S. farmers are directly affected.
    Blue Diamond is making leaps in sustainable farming and production. 
Over twenty years, almond growers have reduced their water use by 33% 
and have pledged an additional 20% water use reduction by 2025. Blue 
Diamond almond growers farm on 20% of California's irrigated farmland, 
yet they only use 13% of agricultural water. And 85% of our almond 
growers use highly efficient micro-irrigation systems.
    Blue Diamond cares for the bee population. Bees are necessary to 
pollinate the almond blossoms. Further, Blue Diamond recognizes the 
environmental importance of maintain the bee population and well-being. 
Blue Diamond is proud partners with Pollinator Partnership and is Bee 
Friendly Farming Certified. Blue Diamond growers support bee health 
during bloom through programs like Seeds for Bees and Water for Bees.
    Blue Diamond's Salida and Turlock facilities are Green Business 
Certified. All Blue Diamond facility sectors have a Facility 
Sustainability Team that works to ensure sustainable large- and small-
scale practices. And there is a community grant program and employee 
volunteer program for employees to partake in. Blue Diamond 
incentivizes growers to join the California Almond Sustainability 
Program. And with 90% of California almond farms are multi-generational 
family farms, Blue Diamond has a strong commitment to fostering the 
next generation of almond growers.
    Mr. Chairman and Members of this Committee, thank you very much for 
the opportunity to present this testimony and for your attention. I 
will be pleased to answer any questions you may have.
            Thank you,

Kent Stenderup,
Managing Partner, Stenderup Ag Partners.

    The Chairman. Thank you very much, Kent, for that 
appropriate testimony, and I think it will certainly reflect in 
questions that are asked by Members of the Committee following 
the testimony of all four witnesses. And please give some of 
our friends there my regards, and tell them I said hi.
    Mr. Stenderup. Will do, will do.
    The Chairman. Our next witness is a constituent of mine, 
and his family, like many families throughout the country, have 
been farming for generations. Simon Vander Woude is a co-owner 
of Vander Woude Dairy in Merced, California. He and his wife, 
Christine, and their family, have been a reflection of hard-
working dairy families that we see throughout the country. He 
will be testifying this morning on behalf of the National Milk 
Producers Federation. He currently serves as California 
Dairies, Inc. co-op Chairman. Mr. Vander Woude, would you 
please open on your testimony?

  STATEMENT OF SIMON VANDER WOUDE, DAIRYMAN, MEMBER-OWNER AND 
                 CHAIRMAN, BOARD OF DIRECTORS, 
        CALIFORNIA DAIRIES, INC.; FIRST VICE CHAIRMAN, 
         EXECUTIVE COMMITTEE, NATIONAL MILK PRODUCERS 
                     FEDERATION, MERCED, CA

    Mr. Vander Woude. Yes. Thank you for this opportunity, 
Chairman Costa. Good morning, and thank you, Chairman Costa and 
Ranking Member Johnson. I am honored to appear before you 
today, and my name is Simon Vander Woude, and I am here to 
discuss trade policy, and the critical role trade plays in 
supporting U.S. dairy farmers.
    My family has been in the dairy business since not long 
after my grandparents immigrated here in 1949. In the mid 1950s 
they started a dairy in Delmar, California, right along the 
beach. In 1971 my parents started a dairy in Ramona, 
California, and in 1994 my wife Christine and I started our own 
dairy in San Marcus, California, all down in San Diego County. 
In 2005 Chris and I joined with my parents and built Vander 
Woude Dairy in Merced, California, up in the Central Valley, 
and today that dairy milks 3,200 cows. We also have two other 
dairies that we have bought as a family, and we are looking 
forward to welcoming our oldest son into the business in 
January, and we will see what the Lord has in store for the 
next five kids as time goes.
    At our Vander Woude Dairy, we have incorporated a lot of 
environmental attributes. We have a 1.1 megawatt solar array. 
We recently started our methane digester, and, Congressman 
Costa, you are invited to the ribbon cutting on December 6. I 
think you got that invite. We do a lot of sustainable water----
    The Chairman. I want to be there, if I am not in 
Washington.
    Mr. Vander Woude. All right, sounds good. A lot of water, 
farming, and dairy management practices that are incorporated 
in order to reduce our carbon footprint, and to create a more 
sustainable model for our farms. As you said, I serve the 
Chairman of the Board of California Dairies. We are the second 
largest dairy co-op in the U.S., only based in California, 
though, and we are the largest skim milk powder producer in the 
world, and--so most of that skim milk--all of that skim milk 
powder is exported. And, being in California, that is one of 
our competitive advantages. Today I am testifying on behalf of 
the National Milk Producers Federation, whose Board I serve on, 
and I also am the First Vice Chair of that organization.
    America's dairy industry is an economic force, employing 
almost a million Americans. Those are not just farm jobs. They 
are manufacturing and distribution jobs at our input suppliers, 
our processing plants, and our ports. Trade opportunities are 
an integral part of that story. Despite last year's 
difficulties, U.S. dairy upheld its reputation as suppliers of 
a variety of high quality, sustainably produced dairy products 
to the world. According to the U.S. Dairy Export Council, of 
which I also am a Director, around 1 in every 6 gallons of milk 
produced here was exported to foreign markets to meet global 
demand, so that fits very closely to your 20 percent number you 
talked about early on.
    Despite all the growth and success we have enjoyed on the 
export front over the years, we could be doing even better with 
a level playing field. Unfortunately, we don't have sufficient 
market access opportunities to provide us with tariff parity or 
better in key markets when compared to our trade competitors. 
As a result, American dairy farmers are left feeling the 
effects. In multiple markets U.S. dairy exports have to sell at 
a discount to combat tariff differentials.
    While trade is all too often disparaged in this country, 
and its benefits sold short, our competitors are busy forging 
agreements. Next spring it will have been a decade since our 
last free trade agreement with a new trading partner was 
implemented. We farmers need a proactive trade policy to keep 
pace, and continue to increase sales, to support the good farm 
and manufacturing jobs that dairy creates. Today, I would like 
to highlight three topics from my written testimony. First, the 
urgent need to address the immense challenges in export 
shipping; second, the importance of negotiating new trade 
agreements to avoid a loss of export opportunities; and 
finally, the importance of enforcement of trade rules to combat 
mounting barriers.
    As some of you may have seen on the front page of The New 
York Times this week, our CEO, Brad Anderson, was quoted, 
talking about the supply chain issues that we are facing with 
our dairy products here in California. Dairy exporters are now 
facing soaring freight rates, and unpredictable access to 
shipping containers, many of which are being rushed back to 
Asia empty to restock imported items. This volatility is 
wreaking havoc on our dairy exports and supply chains. To 
address this crisis, it is critical that Congress pass the 
Ocean Shipping Reform Act that we understand Congressman 
Johnson is a cosponsor of, and we thank you for that, and we 
ask that the Administration take further steps to deliver near-
term relief to address these supply chain challenges. 
Reliability is a vital tenet of our export success, but is 
increasingly in question.
    Second, I can't stress enough that we need new trade 
agreements. Farmers need to see action, and time is of the 
essence. We need trade deals with key markets, like the United 
Kingdom, and various Asian countries, including Japan. We need 
a level playing field in places like China. Moreover, as the 
U.S. negotiates, it is critical that these markets be opened 
for all dairy products. Most countries tend to tightly limit 
milk powder and butter imports, yet those are the products that 
our cooperative produces. These agreements must include access 
for all dairy products.
    Finally, we need to aggressively enforce our market access 
rights, because we can't move forward without holding onto the 
access we won in prior WTO and FTA deals. The dairy industry 
strongly supports Ambassador Tai's decision to bring a USMCA 
dispute case against Canada for not administering its tariff 
rate quotas fairly, and we greatly appreciate Congress's 
support for this step. Enforcement should continue to be a key 
priority around the world to ensure that the United States 
receives the full benefits of its trade agreements.
    Again, Chairman Costa and Ranking Member Johnson, thank you 
very much for the opportunity to testify to this Committee on 
the importance of global trade for all American dairy farm 
families, including my own. Thank you.
    [The prepared statement of Mr. Vander Woude follows:]

 Prepared Statement of Simon Vander Woude, Dairyman, Member-Owner and 
  Chairman, Board of Directors, California Dairies, Inc.; First Vice 
  Chairman, Executive Committee, National Milk Producers Federation, 
                               Merced, CA
    Good morning, Chairman Costa, Ranking Member Johnson, and 
distinguished Members of the Subcommittee. Thank you for inviting me to 
testify on U.S. trade policies and priorities.
    My name is Simon Vander Woude. I operate a 3,200 head dairy in 
Merced, CA alongside my wife Christine. I also serve as Chairman of the 
Board of Directors of California Dairies, Inc. (CDI), the largest dairy 
farmer-owned cooperative in California and the second largest in the 
United States. CDI's 340 family-owned dairy farms produce more than 17 
billion pounds of milk per year representing more than seven percent of 
all milk produced in the United States. CDI member farmers have also 
made a large financial investment in six manufacturing facilities to 
process milk into transportable products, primarily milk powder and 
butter products. Our cooperative is the largest producer of retail 
butter in the United States, the largest producer of milk powder in the 
United States and the largest producer of skim milk powder in the 
world. Our exports of milk powder have grown over the years and are now 
reaching sixty percent of our total production. As that makes clear, we 
are highly dependent on global trade and U.S. trade policy.
    I am testifying today on behalf of the National Milk Producers 
Federation. CDI works closely with the National Milk Producers 
Federation and the U.S. Dairy Export Council on issues related to 
international trade. NMPF develops and carries out policies that 
advance the well-being of dairy producers like me and the cooperatives 
we own. NMPF's member cooperatives produce the majority of the U.S. 
milk supply, making NMPF the voice of more than 32,000 dairy producers 
on national issues. International trade is one of those issues and in 
recent years it has been one of the most important to our industry. 
NMPF works closely on international trade issues with the U.S. Dairy 
Export Council whose partnership between producers, proprietary 
companies, trading companies and others interested in supporting U.S. 
dairy exports has contributed greatly to the success of the industry 
and the thousands of workers who are supported by dairy exports 
throughout the supply chain.
Testimony Summary
    Maintaining our trade relationships and expanding market access for 
U.S. dairy products is vital to the strength of the domestic dairy 
industry and the economic health of rural America. Congress and the 
U.S. Government must work together to expand equitable trade 
relationships with key dairy trade partners, creating greater market 
access for the high-quality, sustainably produced milk and dairy 
ingredients manufactured by the U.S. dairy industry.
    I cannot overemphasize the importance of expanded market access 
opportunities for U.S. dairy exports. Unfortunately, the United States 
has already failed to keep pace in the pursuit of such opportunities 
compared to our competitors in Europe, New Zealand, and Australia. This 
shortcoming will not mean standing still; it means we are falling 
behind, as our competitors continue to negotiate trade deals that erode 
U.S. export competitiveness. This is having a direct impact on U.S. 
jobs in the increasingly export-dependent agricultural sector, 
including the many manufacturing jobs in the processing facilities that 
transform farm products into those we see on market shelves and 
displays.
    With respect to the current and future direction of U.S. trade 
policy, I offer the following observations and recommendations:

   No discussion on trade issues can overlook the immediate and 
        urgent challenge that shipping supply chain issues are posing 
        to our exports. In just the first 7 months of this year, those 
        challenges cost the U.S. dairy industry nearly $1 billion in 
        additional expenses, lost sales, and eroded value. If further 
        Congressional and administrative actions are not swiftly taken 
        to tackle this crisis more fully, the impacts on American-made 
        products will only continue to mount with farmers ultimately 
        bearing the brunt of that. Passage of the Ocean Shipping Reform 
        Act, coupled with additional steps by the Administration to 
        tackle the near-term problems facing export flows, would 
        provide much-needed relief for dairy farmers and manufacturers.

   We cannot stand still; the United States must pursue trade 
        agreements that favor our nation. Collectively, too much time 
        has been spent dwelling on losses from trade rather than on its 
        benefits and how to generate more of the latter. The U.S. dairy 
        industry has urged the Administration to start negotiations 
        immediately with the United Kingdom, with several of the 
        countries party to the Comprehensive and Progressive Trans-
        Pacific Partnership (CPTPP) as well as others in Southeast 
        Asia, and in the Middle East--steps that would allow our 
        industry to grow exports. Where pursuit of a comprehensive deal 
        may not be immediately feasible, it is critical that U.S. trade 
        policy efforts nevertheless deliver expanded access for U.S. 
        dairy products by securing improvements in both tariff and non-
        tariff barriers.

   The Phase One trade agreement with China achieved important 
        progress on several non-tariff-barrier (NTB) issues such as 
        dairy facility registrations and access for high-value products 
        such as extended shelf-life milk. However, retaliatory tariffs 
        continue to impose a significant burden on U.S. dairy exports. 
        The U.S. should secure long-term relief from these tariffs and 
        work to ultimately achieve removal of them so that the U.S. 
        dairy industry can reap the full benefit of the Phase One 
        agreement and grow its market share and export volumes.

   The Phase One U.S.-Japan Trade Agreement has helped U.S. 
        dairy keep pace with its competitors enjoying the EU FTA and 
        CPTPP benefits, but a comprehensive agreement is necessary to 
        not only fully level the playing field, but to also provide 
        Japan's largest customer, which is the United States with 
        better access to the Japanese market by creating meaningful 
        opportunities for key U.S. dairy products left out of Phase One 
        such as milk powder and butter.

   Implementation and enforcement of our trade agreements, 
        including the U.S.-Mexico-Canada Agreement (USMCA), will be 
        essential to preserve the opportunities the U.S. has already 
        worked so hard to procure for U.S. dairy exports. With respect 
        to USMCA, it is critical to fully secure the agreement's 
        benefits, particularly with respect to Canada's dairy tariff 
        rate quotas (TRQs) and dairy policy reforms, as well as 
        Mexico's implementation of USMCA and the development of 
        potential new protectionist dairy regulations.

   The U.S. must continue to address key market access 
        barriers, including FTA compliance concerns in Colombia, and 
        with numerous other countries erecting new barriers to trade. 
        Those include concerns in Egypt, Indonesia, and certainly in 
        the European Union where the continual creation of new import 
        mandates and the perpetual misuse of geographical indications 
        (GIs) are habitually wielded in ways that harm access for U.S. 
        exports.

   The World Trade Organization (WTO) is critically important 
        for the U.S. dairy industry. To strengthen and preserve its 
        core role on global trade rules and enforcement, the WTO needs 
        to be revitalized, both in terms of negotiating reforms that 
        lead to market liberalization and the reduction of 
        protectionist non-tariff trade barriers, and of providing a 
        functioning dispute settlement system.

   U.S. dairy is fully committed to building upon its good 
        track record on sustainability and supports the U.S. 
        Government's approach to fostering pro-trade, pro-innovation, 
        and pro-inclusive sustainability. U.S. leadership on the global 
        stage will continue to be necessary to counter protectionist, 
        anti-trade narratives.

    I would like to underscore the importance of pursuing new trade 
opportunities abroad and believe the time is now ripe for doing so, 
given the progress achieved by the Administration and Congress on many 
of their domestic policy priorities.
Importance of Trade to U.S. Dairy
    America's dairy industry is an economic force that employs nearly 
one million Americans and adds over $750 billion to the U.S. 
economy.\1\
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    \1\ https://www.idfa.org/dairydelivers.
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    Trade is essential to the health of the dairy industry. America's 
dairy farmers and processors have established themselves as the world's 
preeminent suppliers of high-quality, sustainably produced dairy 
products, exporting more than $6.5 billion in dairy products in 2020 to 
customers around the world. Approximately 16% of U.S. milk production 
last year was exported overseas in the form of a wide variety of dairy 
products from cheese to ice cream to milk powder.
    The U.S. dairy industry manufactures high-quality Made-In-America 
products that are beloved by consumers across the globe. In fact, in 
2019, a cheese from the U.S. won ``Best in the World'' at the World 
Cheese Awards for the first time ever. American dairy products can 
compete toe-to-toe and win against any country.
    Importantly, these exports drive growth across the U.S. economy. 
Dairy exports alone create more than 85,000 U.S. jobs and have a nearly 
$12 billion economic impact.\2\ Those sales play an indispensable role 
in supporting the health of America's dairy farms as well as the 
manufacturing jobs of dairy processors. Impairing export sales 
therefore harms not only farmers, but also workers in companies 
supplying inputs and services, in downstream processing plant jobs, and 
in cities with large port facilities heavily dependent on trade.
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    \2\ https://medium.com/dairy-exports-mean-jobs.
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    When our exports increase, everyone in the dairy supply chain 
benefits. U.S. trade agreements have played an indispensable role in 
increasing U.S. exports. Beginning with the North American Free Trade 
Agreement (NAFTA) in 1994 and continuing through the Phase I Agreement 
with Japan, trade agreements have enabled U.S. dairy exporters to 
compete on either a more level playing field or at an advantage with 
international competitors in terms of tariff access, removal of non-
tariff barriers and clear and consistent rules for trade. By way of 
perspective, in 1993, the year before NAFTA, the United States sold 
just $618 million worth of dairy products overseas; in 2020, the U.S. 
sold $3.5 billion to just its FTA partners. Yet as global demand for 
dairy continues to grow and American dairy producers work hard to 
retain their farms, further progress is needed.
    It is therefore essential that Congress and the U.S. Government 
take a proactive approach to tearing down both tariff and non-tariff 
trade barriers that hinder U.S. exports, particularly in markets where 
America's farmers are at a disadvantage to our competitors.
Export Shipping Supply Chain Challenges Must Urgently be Addressed
    One of the most pressing concerns for the dairy industry at present 
is the immense challenge posed in moving our American-made products 
from U.S. dairy manufacturing facilities to foreign customers. Freight 
rates have soared while availability and predictability of the 
necessary equipment to move U.S. dairy products to overseas buyers has 
plummeted. Carriers, facing a financial incentive to return to Asia as 
swiftly as possible to restock U.S. shelves with more imported 
products, are shipping empty containers across the Pacific at record 
rates of over 70%. A colleague of mine testified earlier this month 
before the full Committee about the havoc this is wreaking on our 
exports. The company that ships the dairy products my cooperative makes 
to markets around the world has been moving heaven and earth to work to 
deliver our shipments to the foreign customers counting on them. They 
are important ingredients in supply chains that help feed consumers in 
Asia and elsewhere. But--unfortunately--they are not irreplaceable; and 
our competitors in the EU and New Zealand are not facing the same level 
of volatility in supplying those markets.
    To address this crisis, it is critical that Congress pass the Ocean 
Shipping Reform Act and that the Administration take further steps to 
deliver near-term relief to the supply chain snarls and market failures 
that are bogging down the export of American-made products.
U.S. Dairy Needs Expanded Market Access Opportunities in Key Markets
    The U.S. Government will need to adopt a forward-leaning posture 
and actively negotiate additional trade agreements with key export 
markets to retain existing export sales and achieve additional export 
growth. The U.S. dairy industry supports the negotiation of trade 
agreements that help level the playing field for American dairy 
products and provide access for the entire ``bucket of milk'' \3\ our 
farmers produce by expanding opportunities for all types of dairy 
products. Accomplishing this will allow our industry to not just retain 
existing sales and dairy jobs, but to build further on our industry's 
American success story by further growing exports and expanding dairy 
jobs.
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    \3\ Incorporating the entire ``bucket of milk'' is a reference to 
including a wide variety of American-made dairy products in future 
trade agreements. Historically, much emphasis has been placed on 
enhancing market access for cheese products, with less emphasis on 
market access for products like butter and milk powders. The U.S. dairy 
industry is positioned to compete in the global marketplace across all 
categories of products, and our free trade agreements should reflect 
that, going forward.
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    As the U.S. evaluates new trade agreement partners, it is important 
to ensure that U.S. negotiating time is best concentrated on agreements 
likely to yield net agricultural benefits for the United States and to 
position the United States to better compete against key competitors. 
We strongly caution against sinking scarce U.S. resources into 
negotiations with countries unlikely to lead to net dairy and 
agricultural export gains for the United States.
    The U.S. focus needs to be on key markets in which we compete head-
to-head with other major dairy suppliers. Unfortunately, America's 
biggest dairy export competitors--Europe, New Zealand, and Australia--
have negotiated FTAs with many of our partners in Southeast Asia, Japan 
and elsewhere or are in the process of doing so, often leaving the U.S. 
as the only major supplier that will be left without an FTA. The tariff 
advantages provided by these FTAs put the U.S. dairy industry at a 
distinct disadvantage, and we are at risk of seeing our competitiveness 
erode in critically important markets. Standing still means sliding 
backwards.
    For this reason, and for the potential export growth opportunities 
they represent, we would like to see the United States pursue 
agreements with the United Kingdom, Southeast Asia, Japan, China, and 
countries of the Middle East.
    The UK dairy market is a prosperous one with a significant segment 
of its dairy consumption coming from imports, representing strong 
potential to expand U.S. market share. However, numerous tariff and 
non-tariff barriers imposed by the EU have long hindered U.S. dairy 
exports to the UK. The UK's exit from the EU presents an opportunity to 
move beyond the EU's complex trade policies which act as major 
disincentives to U.S. exports yet were largely inherited by the UK.
    U.S. dairy producers and businesses have worked hard to make 
advancements in Southeast Asia, in particular Vietnam, and believe 
increased sales throughout Asia are key to the industry's future 
success. However, in this region in particular, U.S. gains are 
threatened by the progress our competitors have been achieving in 
negotiating FTAs that erode U.S. competitiveness.
    Comprehensive trade deals like FTAs present the best opportunities 
for eliminating the range of tariff and non-tariff barriers that have 
impeded U.S. exports. However, in markets where the pursuit of a 
comprehensive deal may not be immediately feasible, U.S. efforts to 
tackle trade barriers to U.S. dairy exports need not and should not 
wait. Bilateral dialogues and negotiations can make significant headway 
in alleviating tariff and non-tariff barriers to U.S. exports and 
should be pursued vigorously. Even as U.S. trade policy efforts embrace 
a wider set of objectives, it is nevertheless critical that they 
deliver actual progress for agricultural goods trade flows. Agreements 
that are limited to rules areas and non-goods trade will not achieve 
that goal.
    Well-crafted trade agreements that tackle the full range of U.S. 
interests--for workers, for companies, for farmers--take time to 
develop and implement into law. That means time is of the essence if 
the U.S. is to get back in the game and work to provide the 
opportunities our country needs to remain competitive on the global 
landscape. The Administration and Congress must work together to 
promote and expand trade opportunities for U.S. agriculture and the 
American people; there is no other viable alternative. While we delay, 
our competitors are increasingly opening markets and blocking our 
exports through non-tariff barriers. While we continue to import 
products from all over the world, the world is not nearly as open to 
the United States. Robust, forward-looking trade agreements are the 
avenue to address that disparity.
China's Potential Will Depend on the Removal of Retaliatory Tariffs
    Over the past decade, China has become a critically important 
market for U.S. dairy exports. Sales last year alone totaled over $539 
million, ranking China the third largest export market for U.S. dairy 
products, despite the harmful impact of China's retaliatory tariffs in 
response to USTR Section 301 duties.
    Our industry welcomed the conclusion of the U.S.-China ``Phase 
One'' economic and trade agreement in 2020 that resolved numerous 
regulatory impediments for U.S. dairy exports to the Chinese market. 
However, despite tariff exemptions for select products, retaliatory 
duties still place U.S. exports at a disadvantage when compared to our 
major trade competitors. While there remains tremendous potential in 
this market as demand for dairy products continues to expand, China has 
not prioritized purchasing significantly larger shares of its dairy 
needs from the U.S. to date, despite its Phase One agricultural 
purchase commitments. The impacts of this are seen most clearly in the 
major dairy commodity categories of milk powder and cheese. I therefore 
urge that Congress work with the Administration to press for removal of 
all retaliatory tariffs on dairy and to secure as an interim step year-
long retaliatory tariff exemptions for dairy products.
Japan Exports Also Depend on Expanded Market Access
    Japan ranks seventh among our export markets for dairy products, 
valued at $322 million in 2020. U.S. dairy farmers applauded the 
strides made for dairy in the Phase One U.S.-Japan Trade Agreement as 
they were vital to heading off an erosion of U.S. market share in this 
key market to the EU and parties in the CPTPP, especially for cheese, 
whey, and lactose products. However, more remains to be done to 
maximize opportunities for U.S. dairy farmers and processors, and to 
provide market access for other products not substantially covered by 
the Phase One deal such as milk powder and butter. The dairy industry 
is therefore urging U.S. trade negotiators to build upon the Phase One 
deal and deliver the complete range of market access opening through a 
comprehensive FTA, which would also deliver non-tariff commitments to 
create dependable trading conditions in the future.
    A 2019 U.S. Dairy Export Council study found that if the U.S. has 
at least the same market access as its competitors, the U.S. could 
roughly double its share of the Japanese market over the next 10 years.
USMCA Enforcement Will be Key to Obtaining its Benefits
    USMCA made tremendous strides to modernize trade rules and 
facilitate the smooth flow of U.S. dairy products throughout North 
America, but the benefits of USMCA will only flow if Canada and Mexico 
properly implement the agreement. This will require proactive 
monitoring and enforcement of USMCA implementation, including through 
enforcement actions such as that taken against Canada's administration 
of its TRQs for dairy products.
    The U.S. dairy industry strongly supports U.S. Trade Representative 
Tai's decision to initiate the TRQ enforcement action and deeply 
appreciates the robust bipartisan support that Congress has voiced for 
this important follow-through step. Canada has not administered its 
TRQs fairly, as required by its USMCA obligations. Unfortunately, this 
is consistent with Canada's long history of undermining its market 
access commitments to protect its tightly controlled dairy market. 
Canada's TRQ system discourages full utilization and valuation of 
agreed upon quantities. USMCA dispute settlement is the right course of 
action to address Canada's unfair restrictions and we are gratified 
that USTR has been aggressively proceeding with the case.
    The decision to pursue dispute settlement also delivers a strong 
message against the erection of future barriers in Canada and other 
markets. Our trading partners need to know that failure to meet their 
agricultural trade commitments with the United States will result in 
robust action to defend U.S. rights.
    In this context, we urge Congress to work proactively with USTR and 
USDA as they monitor Canada's implementation of other dairy related 
USMCA provisions, such as those eliminating Canada's discriminatory 
Class VII dairy pricing policy and requiring export surcharges on a 
variety of dairy protein exports. Here as well, Canada's actions have 
given cause for concern. Canadian exports of milk protein isolates 
(MPI) and certain skim milk blends manufactured under the new Class IVa 
have been increasing in a manner that appears designed to intentionally 
circumvent USMCA's dairy protein export disciplines. Curbing Canada's 
use of global markets to dispose of the excess dairy protein generated 
by its government-controlled supply management system was a core USMCA 
objective.
    Vigilant monitoring and aggressive enforcement will also be 
necessary with our other USMCA partner, Mexico. Mexico is the largest 
export market for U.S. dairy products, and the U.S. trade relationship 
with Mexico is of the utmost importance. Unfortunately, of late there 
has been a proliferation of poorly designed Mexican regulations that 
threaten to disrupt trade and erode the U.S. role as a reliable 
supplier. These overly burdensome regulatory proposals pose a 
particular threat to U.S. milk powder and cheese exports to Mexico. 
Close attention must also be paid to Mexico's implementation of USMCA 
side letter provisions on geographical indications (GIs) and common 
food names.
    The U.S. should ensure that discussions with Mexico treat its surge 
in regulatory and customs enforcement issues as a collective concern, 
and not simply as one-off issues. We need to restore smooth and 
predictable trading conditions with Mexico to ensure that the U.S. and 
Mexico remain an integrated market and that the promise of USMCA is 
fulfilled.
The U.S. Must Knock Down Key Market Access Barriers
    U.S. dairy exports continue to face a number of significant 
impediments, both in our FTA partners and in other markets. We urge the 
United States Government to take aggressive action to knock down these 
barriers.
Colombia Safeguard
    As noted previously, our trading partners need to know that failure 
to meet their agricultural trade commitments with the United States 
will result in robust action to defend U.S. rights. For example, our 
FTA partner Colombia is now contemplating an unwarranted safeguard 
action that could undercut U.S. dairy access to its 11th largest export 
market. The U.S. dairy industry appreciates USTR raising this issue at 
an August Ministerial-level meeting and encourages continued U.S. 
engagement to ensure the safeguard investigation follows the specific 
procedures as enumerated in the U.S.-Colombia bilateral trade agreement 
and that trade is not disrupted.
Burdensome New Regulatory Requirements
    To preserve access opportunities for U.S. dairy flows, Congress 
should work with the Administration to address burdensome and 
unwarranted new regulatory requirements that U.S. dairy exports have 
had to contend with.
    Egypt has erected one such barrier in connection with its Halal 
requirements, by requiring all dairy exports to be certified Halal by a 
single and exclusive certifying body partially owned by the Egyptian 
Government, subject to non-transparent conditions and charges. U.S. 
dairy exporters successfully Halal certify their products to multiple 
markets around the world; however, Egypt's requirements are out of step 
with those of other countries and could seriously limit or altogether 
halt many exports.
    Likewise, Indonesia's plant registration requirements are posing an 
unwarranted limitation on U.S. exports. In order to export to 
Indonesia, dairy plants are required to register with the government on 
an approved list. Indonesia's process is exceedingly slow and 
unpredictable and represents a severe bottleneck to expansion of U.S. 
exports to Indonesia, our sixth largest export destination. For 
instance, multiple U.S. dairy facilities applied to ship to Indonesia 
as long ago as the start of last year and yet have still seen no action 
taken on their applications. The U.S. Government should work with its 
Indonesian counterparts and interagency partners to secure prompt 
approval of the pending applications and to streamline a process for 
facility registration in this key market.
Volatility in EU Trade Conditions
    The EU's long history of unwarranted trade barriers has over the 
past few years taken the form of overly prescriptive EU requirements 
that mandate assurances of compliance with specific EU regulations and 
that mandate that U.S. processes for oversight mirror those used in the 
EU. These include new dairy and composite certification requirements, 
an anti-microbial resistance ``reciprocity'' requirement, and others. 
Even when long and arduous government-to-government discussions resolve 
a concern, the time involved, and the frequent introduction of new 
requirements create market instability and uncertainty that puts 
hundreds of millions of dollars of trade at risk. The EU's insistence 
that its trading partners must mirror process requirements and not 
simply outcome requirements fail to comply with the EU's trade 
obligations and needlessly increases the volatility of supplying the EU 
market.
Geographical Indications (GIs) and Common Food Names
    One area that has become a significant barrier confronting U.S. 
export opportunities to numerous markets in recent years has been the 
misuse of GIs by the European Union. In principle, GI protections are 
used to describe specialized products made in a specific region in 
order to protect the unique nature of that product. However, the EU has 
used GIs to restrict the use of generic terms by which millions of 
consumers recognize some of their favorite foods; use of GIs to create 
this result must be firmly rejected as the protectionist and anti-trade 
policy that it is.
    The U.S. Government must secure firm and explicit trade commitments 
assuring the future use of specific generic food and beverage names 
targeted by EU monopolization efforts and rejecting the use of GIs as 
barriers to trade in products relying on common names. USMCA's common 
food name side letter provisions established a building block precedent 
affirming market access rights for a non-exhaustive list of commonly 
used product terms. To effectively combat the EU's trade-distorting and 
WTO-illegal actions, the U.S. Government must proactively and 
consistently expand upon this pilot model with other trading partners 
to ensure that market access rights protections for American-made 
common food name products are strengthened and cloaked barriers to 
trade are rejected.
Revitalization of the World Trade Organizations is Needed to Strengthen 
        this Trade Pillar
    The World Trade Organization is critically important for the U.S. 
dairy industry. By establishing the rules for global dairy trade, and 
more broadly agricultural trade, the WTO can help shape government 
policies that reduce protectionist trade distortions and bring 
predictability and lower risks for American dairy exports. But the WTO 
needs to be revitalized, both in terms of negotiating reforms that lead 
to market liberalization and the reduction of protectionist non-tariff 
trade barriers, and of providing a functioning dispute settlement 
system.
    The U.S. dairy industry strongly supports U.S. leadership in 
ensuring that the WTO has a functioning dispute settlement system. With 
a myriad of questionable non-tariff barriers to U.S. dairy exports, 
effective enforcement of current trade agreements requires the WTO to 
have an effective dispute settlement system.
    With the WTO's 12th Ministerial occurring later this month, there 
is an opportunity to establish a future negotiating agenda for 
agriculture that leads to enhanced transparency of government policies, 
including tariff treatment, market-based and sustainable trade 
liberalization, and reduced trade distortions. NMPF has joined with 
other U.S. agricultural stakeholders in calling for U.S. leadership and 
identifying policy priorities for the WTO. Enforceable and transparent 
rules that are enabled by a reformed WTO could lower barriers and 
market distortions. Care is needed in the upcoming Ministerial, 
however, to ensure that we have an effective, credible, and well-
functioning dispute settlement process, while ensuring that any future 
framework for agriculture negotiations has a commensurate level of 
ambition for market access compared to domestic support and improves 
the transparency of government policies.
Dairy is an Agricultural Leader on Improving Sustainability
    Given heightened global interest in sustainable food systems, the 
U.S. dairy industry is well poised to meet the environmental and animal 
welfare demands of the international community. American dairy farmers 
have been environmental stewards for decades, tending with great care 
to their land and water, and they value a proactive approach to 
sustainability.
    As a testament to dairy's endeavors, greenhouse gas emissions to 
produce a gallon of milk dropped nearly 20% over the 10 years from 2007 
to 2017 and the environmental footprint of a gallon of milk has 
significantly decreased since 1944 (e.g., 90% less land, 65% less 
water, 63% smaller carbon footprint per unit of milk). This puts us at 
the forefront on sustainability globally with the lowest greenhouse gas 
footprint per gallon of milk of any region in the world according to 
the United Nations Food and Agriculture Organization.
    To continue and enhance our efforts to combat climate change, the 
dairy industry has launched the Net Zero Initiative to reduce the 
industry's climate impact to become carbon-neutral by as early as 2050 
and minimize the water quality impacts of dairy farming. The U.S. dairy 
industry has also developed the industry-driven Farmers Assuring 
Responsible Management (FARM) \4\ program for animal care standards, 
which became the first internationally certified dairy animal welfare 
program in the world.
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    \4\ https://nationaldairyfarm.com/what-is-farm/.
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    U.S. dairy is fully committed to building upon its good track 
record on sustainability and supports the U.S. Government's approach to 
pro-trade, pro-innovation, and pro-inclusive sustainability. We 
appreciate the leadership the U.S. Government demonstrated in charting 
this type of positive sustainability agenda during this year's Food 
Systems Summit process and most recently during its COP26 engagements 
and look forward to continuing to play an active role on both fronts as 
subsequent project streams unfold in the coming year.
    With climate and sustainability issues commanding ever-increasing 
focus around the world, it will be essential for the United States to 
continue to serve as a leader globally on these issues, both for their 
own sake and to combat other voices that are driving more 
protectionist, anti-trade, anti-developed country, and anti-livestock 
narratives. Those voices include the EU and unfortunately even some 
officials at leading international institutions such as the World 
Health Organization.
Conclusion
    The U.S. dairy industry recognizes the importance of expanding 
overseas market opportunities to bolster our farmers, processors, and 
manufacturers here at home. We have worked hard to establish the U.S. 
as a reliable and environmentally sustainable supplier of safe and 
nutritious products to meet growing foreign demand for high-quality 
American dairy products, and we want to be able to capitalize on these 
extensive efforts through improved access to these markets.
    New trade agreements will be necessary not only to expand market 
access, but to preserve it, as our competitors grow their own networks 
of FTAs and in the process threaten to render U.S. exports 
uncompetitive. The health of the dairy industry, including the many 
farmers and manufacturing workers it employs throughout its supply 
chain, will depend on such agreements, on ensuring vigorous enforcement 
of those agreements, and on bilateral efforts to address trade 
barriers.
    The U.S. dairy industry--from farmers to exporters and all the 
related jobs tied to our sector--needs the opportunity to help meet 
rising global dairy demand, and consumers around the world need the 
great American-made products we produce.
    I appreciate the opportunity to provide comments on these important 
issues to this Committee. Thank you.

    The Chairman. Thank you very much, Mr. Vander Woude, and 
points well taken. And let the record stipulate the fact that 
you being a constituent of the Chairman has nothing to do with 
the generous time clock I gave you.
    Mr. Vander Woude. Thank you.
    The Chairman. Our next witness that we have before us is 
the person--Latashia, here we go, our third witness. Get on the 
right page. Latashia, we are very pleased that you would have 
the opportunity to testify with us--Redhouse. Latashia Redhouse 
is the Director of the American Indian Foods Program, which is 
a part of the Intertribal Agricultural Council. Native 
Americans historically have played an important role--
obviously, historically, we often, too often, in my opinion, 
forget that critical role, and we are very pleased that the 
Intertribal Agricultural Council is testifying before the 
Subcommittee today. Ms. Redhouse is an enrolled member of Dine 
Nation, and was raised in southeastern Utah. Please present 
your testimony, Ms. Redhouse.

STATEMENT OF LATASHIA REDHOUSE, DIRECTOR, AMERICAN INDIAN FOODS 
      PROGRAM, INTERTRIBAL AGRICULTURE COUNCIL, VERNAL, UT

    Ms. Redhouse. Thank you so much, Chairman Costa, Ranking 
Member Johnson, and Members of the Subcommittee on Livestock 
and Foreign Agriculture. Thank you for inviting me to provide 
you all with some information regarding livestock and foreign 
agriculture trade. My name Latashia Redhouse. I serve as the 
Director of the American Indian Foods Program at the 
Intertribal Agriculture Council. I am a member of the Dine 
Nation, and I am tuning in from the United Arab Emirates, where 
I am representing Tribal producers at Dubai's Expo World 2020 
and Te Aratini Festival of Indigenous and Tribal Ideas.
    The Chairman. Well, that is impressive. What time zone are 
you on?
    Ms. Redhouse. Wow, yes. I am awake, I think.
    The Chairman. What time is it in Doha?
    Ms. Redhouse. It is 7:37 p.m.
    The Chairman. Okay. Very good. Well, we are happy to have 
your testimony. Please proceed.
    Ms. Redhouse. Okay. Thank you. Today my testimony will 
focus on the possibilities--foreign barriers to livestock and 
foreign agriculture trade across Indian Country. The 
Intertribal Agriculture Council was founded in 1987 to pursue 
and promote the conservation, development, and use of our 
agricultural resources for the betterment of our people.
    Land-based agricultural resources are vital to the economic 
and social welfare of many Native American and Alaskan Tribes. 
The harmonies of man, soil, water, air, vegetation, and 
wildlife that collectively make up the American Indian 
agriculture community influence our emotional and spiritual 
well-being. Prior to 1987 American Indian agriculture was 
practically unheard of outside reservation boundaries. IAC's 
responsiveness to on the ground needs and extensive networks 
contribute across the spectrum of Tribal food systems, 
development, and further governmental and partner outreach 
efforts through Indian Country. Federal, state, and 
organizational partners draw upon IAC's expertise to inform 
programming and policies that directly impact Indian Country 
and beyond.
    Tribal agricultural production and food systems are 
essential economic development and community drivers in Indian 
Country. According to the 2017 Census of Agriculture, nearly 
80,000 Tribal producers are operating on over 59 million acres 
of land, while generating over $3.5 billion in economic 
activity. Some estimates suggest that adequate investments in 
Indian Country, including increased Federal funding for foreign 
trade, and the removal of structural barriers to global market 
access, could allow for the agriculture sector across Indian 
Country to grow to a valuation of $45.4 billion, spurring 
economic growth that will contribute to the physical 
infrastructure necessary, while providing the pathway to Tribal 
self-determination, food sovereignty, and economic growth. I 
would like to mention that Chairman Costa, Member Correa, 
Member Harder, Member Khanna, Member Hartzler, Member Moore, 
and Ranking Member Johnson each represent states which are 
among the top ten for American Indian and Alaska Native 
producers, according to the 2017 Census of Agriculture.
    The American Indian Foods Program is a program offered by 
IAC, with a contract with the USDA Foreign Agricultural 
Service. The partnership was developed as a platform for--
produced by American Indian certified food and ag businesses to 
showcase products and share Tribal cultures with the world. The 
program is designed to work with American Indian-owned 
businesses to provide export education, and to facilitate 
global market penetration, while developing sustainable 
economics based on food production. The program is designed to 
allow for domestic port to American Indian-owned businesses 
interested in entering the international marketplace, while 
developing sustainable economics based on food production.
    The program also promotes and authorizes the use of the 
Made/Produced by American Indian certified trademark to assist 
American Indian producers in improving their market access, 
thereby increasing the economic base of the Indian producer and 
their community, while protecting American Indian producers and 
consumers from fake and falsely advertised Indian-made 
products. By converting the $3.3 billion in raw food products 
currently already sold by producers on Indian reservations, 
today we predict that Indian Country could alone become an 
economic powerhouse, with an estimated $9 billion in premium 
food products.
    While the IAC/AIF provides support to agricultural 
businesses seeking growth in the international marketplace, 
many IAC/AIF members continue to experience increased 
uncertainty and risk as the pandemic limits activities and 
future trade developments. Persistent labor and supply chain 
issues, coupled with the market uncertainties that both predate 
and accompany the--these pandemic impacts are driving this 
increase in uncertainty, along with the additional uncertainty 
and trauma of operating in a global pandemic that has 
disproportionately impacted Native people. During this 
difficult time, Native producers' priorities understandably 
shifted away from seeking international markets to supporting 
their Tribal communities. 93 percent of Tribal producers 
responding to IAC's COVID-19 response survey indicated that the 
pandemic had impacted their international sales.
    As Tribal communities began to emerge from pandemic-related 
uncertainties and look again to international markets, some 
longstanding policy and administrative problems must be 
remedied if Tribal producers are going to be able to access 
international markets. One of the longstanding problems is the 
reality of infrastructure needs in Indian Country agriculture, 
which for many years have gone underfunded, or unfunded. 
Because of decades of being underserved by Federal programs, 
Native producers began their pathway to accessing international 
markets with fewer resources than their non-Native 
counterparts. As a result, lagging behind in market access, 
despite producing specialty and niche products that would do 
very well internationally.
    The reality of Federal underservice to Native producers, 
and the need for Native producers to have better pathways to 
access international markets was one of the driving factors 
behind the Congressional adoption of Section 3312 of the 
Agricultural Improvement Act of 2018, or 2018 Farm Bill. The 
provision, one of the 63 Tribal-specific provisions included in 
the final legislation, required the Secretary of Agriculture to 
seek greater inclusion and participation of Native farmers, 
ranchers, and producers on international trade missions, and to 
report back to Congress about the status of Native producers in 
trade missions. These missions represent critical opportunities 
to promote Native produced products, many of which are highly 
desirable on an international market. Despite this----
    The Chairman. If you would please close here?
    Ms. Redhouse. Yes.
    The Chairman. The Chairman is being very generous with the 
time this morning, I am not sure why, but please conclude.
    Ms. Redhouse. Yes. Yes. So those are our barriers, and if 
there are any questions, or anything that I could share, feel 
free to reach out. Thank you.
    [The prepared statement of Ms. Redhouse follows:]

  Prepared Statement of Latashia Redhouse, Director, American Indian 
       Foods Program, Intertribal Agriculture Council, Vernal, UT
Introduction
    Chairman Costa, Ranking Member Johnson, and Members of the 
Subcommittee Livestock on Foreign Agriculture, thank you for inviting 
me to provide you all with some information regarding livestock and 
foreign agriculture trade. My name is Latashia Redhouse. I serve as the 
Director of the American Indian Foods program at the Intertribal 
Agriculture Council. I am a member of Dine Nation and am tuning in from 
the United Arab Emirates where I am representing Tribal producers at 
Dubai's Expo World 2020 convention. Today my testimony will focus on 
the possibilities for and barriers to livestock and foreign agriculture 
trade across Indian Country.
Intertribal Agriculture Council (IAC)
    The Intertribal Agriculture Council (IAC) was founded in 1987 to 
pursue and promote the conservation, development and use of our 
agricultural resources for the betterment of our people. Land-based 
agricultural resources are vital to the economic and social welfare of 
many Native American and Alaskan Tribes. The harmonies of man, soil, 
water, air, vegetation and wildlife that collectively make up the 
American Indian agriculture community, influence our emotional and 
spiritual well being. Prior to 1987, American Indian agriculture was 
practically unheard of outside reservation boundaries. IAC's 
responsiveness to on-the-ground needs and extensive networks contribute 
across the spectrum of Tribal food system development and further 
governmental and partner outreach efforts throughout Indian Country. 
Federal, state, and organizational partners draw upon IAC's expertise 
to inform programming and policies that directly impact Indian Country 
and beyond.
    Tribal agriculture production and food systems are essential 
economic development and community drivers in Indian Country. According 
to the 2017 Census of Agriculture, nearly 80,000 Tribal producers are 
operating on over 59 million acres of land while generating over $3.5 
billion in economic activity. Some estimates suggest that adequate 
investments in Indian Country, including increased Federal funding for 
foreign trade and the removal of structural barriers to global market 
access, could allow for the agriculture sector across Indian Country to 
grow to a valuation of $45.4 billion, spurring economic growth that 
will contribute to the physical infrastructure necessary while 
providing the pathway to Tribal self-determination, food sovereignty, 
and economic growth.
    I would like to mention that Chairman Costa, Member Correa, Member 
Harder, Member Khanna, Member Hartzler, Member Moore, and Ranking 
Member Johnson, each represent states which are among the top ten for 
American Indian/Alaska Native producers according to the 2017 Census of 
Agriculture.
American Indian Foods (AIF)
    The American Indian Foods (AIF) program of the Intertribal 
Agriculture Council (IAC) began in 1998 under contract with the USDA 
Foreign Agricultural Service. The partnership was developed as a 
platform for Made/Produced by American Indian certified food and ag 
businesses to showcase products and share Tribal cultures with the 
world. The program is designed to work with American Indian owned 
businesses to provide export education and to facilitate global market 
penetration while developing sustainable economics based on food 
production.
    The program is designed to offer domestic support to American 
Indian owned businesses interested in entering the international 
marketplace while developing sustainable economics based on food 
production. The program also promotes and authorizes the use of the 
Made/Produced by American Indian certified trademark to assist American 
Indian producers in improving their market success, thereby increasing 
the economic base of the Indian producer and their community, while 
protecting American Indian producers and consumers from fake and 
falsely advertised Indian-made products.
    By converting the $3.3 billion in raw food products currently 
already sold by producers on Indian Reservations today, we predict that 
Indian Country could become an economic powerhouse with an estimated $9 
billion in premium food products, alone.
Barriers to Foreign Trade Across Indian Country & Possible Solutions
    While the IAC AIF provides support to agricultural businesses 
seeking growth in the international marketplace, many IAC AIF members 
continue to experience increased uncertainty and risks as the pandemic 
limits activities and future trade developments. Persistent labor and 
supply chain issues, coupled with the market uncertainties that both 
pre-date and accompany these pandemic impacts, are driving this 
increased uncertainty, along with the additional uncertainty and trauma 
of operating in a global pandemic that has disproportionately impacted 
Native people. During this difficult time, Native producers' priorities 
understandably shifted away from seeking international markets to 
supporting their Tribal communities; 93% of Tribal producers responding 
to IAC's COVID-19 response survey indicated that the pandemic had 
impacted their international sales. As Tribal communities begin to 
emerge from pandemic-related uncertainties and look again to 
international markets, some long standing policy and administrative 
problems must be remedied if Tribal producers are going to be able to 
access international markets. One of the longstanding problems is the 
reality of infrastructure needs in Indian Country agriculture, which 
for many years have gone underfunded or unfunded. Because of decades of 
being underserved by Federal programs, Native producers begin their 
pathway to accessing international markets with fewer resources than 
their non-Native counterparts, and as a result lag behind in market 
access despite producing specialty and niche products that would do 
very well internationally.
    The reality of Federal underservice to Native producers and the 
need for Native producers to have better pathways to access 
international markets was one of the driving factors behind the 
Congressional adoption of Sec. 3312 of the Agricultural Improvement Act 
of 2018, or 2018 Farm Bill. This provision, one of the 63 Tribal 
specific provisions included in the final legislation, required the 
Secretary of Agriculture to seek greater inclusion and participation of 
Native farmers, ranchers, and producers on international trade missions 
and to report back to Congress about the status of Native producers in 
trade missions. These missions represent critical opportunities to 
promote Native-produced products, many of which are highly desirable on 
the international market. Despite this progress in the 2018 Farm Bill 
and directive to the Secretary, Native producers remained 
underrepresented in international trade missions in 2019. This 
provision was a recognition by Congress of the importance of 
international trade missions in placing producers in front of potential 
customers and easing pathways to international trade, and should be 
implemented as soon as possible. Organizations like IAC, which 
maintains a robust network of technical assistants across Indian 
Country, can help USDA identify potential applicants for trade missions 
to fulfill the promise of this farm bill provision.
    Another issue we encounter is that foreign trade participants may 
not understand the certification, licensing, and registration protocol 
in the U.S. and various countries (for exports). Reproduction by 
competitors or unethical sellers who take advantage of producers' lack 
of knowledge remains a challenge as well. Participants with minimal 
resources may be irreparably harmed by failed business deals and the 
support to navigate these issues. Oftentimes, producers do not have the 
cash flow to cover packaging, repackaging, or labeling costs. A 
possible solution could include expanding educational efforts to 
increase availability of resources on export requirements, as well as 
marketing strategies and business planning. USDA FAS in-market 
specialists are added resources to offer guidance and market 
recommendations.
    Native producers also face other unique challenges, such as 
appropriative non-Native food businesses that seek to market their 
products by claiming Native ancestry or cultural food practices. These 
unscrupulous food business entities mimic unique Tribal food products 
without legitimate claim to Tribal citizenship. Those businesses should 
not be allowed to participate in programs that allow them to access 
markets with products that perpetrate frauds on Tribal food producers 
or food businesses.
    We propose that the USDA provide tools and resources to analyze 
risk management and best practices, including international logistics 
(shipping, insurance, distribution, etc.).
Opportunities for Expanding Foreign Market Access to Tribal Producers 
        in Farm Bill 2023
    One possible avenue for expanding foreign market access to Tribal 
producers is through the Trade Title of the upcoming 2023 Farm Bill.
    The Trade Title programs are a vital part of food production for 
all food industries, especially in Indian Country. A growing number of 
Tribes and individual Indian producers are engaged in trade of food and 
agriculture products and have participated in the USDA Market Access 
Program (MAP) via the Intertribal Agriculture Council's American Indian 
Foods Program, which provides export-readiness training assistance and 
the incorporation of products into international food trade shows. 
Tribal food products have high market demand in overseas markets; 
however, the hurdles necessary to engage in such markets are complex 
and limit Tribal participation. Improvements to the Trade Title can 
help support and build Tribal food businesses and provide new markets 
for unique and traditional Tribal foods, while protecting producers and 
increasing economic development.
    We advocate for supporting and maintaining Tribal food and 
agriculture businesses' entry into foreign markets by expanding Indian 
Country's access to the Market Access Program (MAP) and protecting 
unique Tribal foods against fraud. MAP could be expanded by 
substantially increasing the funding available to the existing 
agreements that facilitate coordination and administration of the MAP 
program. This should be done with the intent of increasing Tribal food 
business participation in the program so that Tribal audiences and more 
Tribal food and agriculture businesses can benefit from the program. 
The impact of such engagement will further solidify local food 
economies and food businesses and stabilize Tribal economies.
    We believe that the USDA should institute a system by which 
fraudulent foods that mimic Tribal foods and Tribal food businesses can 
be uncovered and prevented in the marketplace. Food fraud is on the 
rise throughout the world, and unscrupulous food business entities are 
already trying to mimic or replicate unique Tribal food products. Those 
businesses should not be allowed to participate in programs that allow 
them to access markets with products that perpetrate frauds on Tribal 
food producers or food businesses.
    We also advocate for improving interdepartmental coordination and 
Tribal Government and individual Indian producer inclusion on all U.S. 
trade missions. This should include recognizing Indian Country as the 
USDA develops a stronger relationship with the Department of Commerce 
on food and agriculture trade. A special interdepartmental coordination 
group with USDA, Department of Commerce, Department of State, and other 
applicable agencies should be created to ensure that Tribal food 
production is properly supported and encouraged on Tribal lands and is 
thereafter made a part of the U.S. trade missions and efforts to 
promote agricultural trade.
    To further increase Tribal producers' presence on the world 
agriculture stage, Tribal Governments, Tribal food businesses, and 
individual Tribal food producers should be included on all foreign 
trade missions undertaken by the United States to further facilitate 
the access of Tribal food products to such markets.
    Last, we believe that it should be within Tribal nations' power to 
trade directly with Indigenous Tribes and Nations from Canada and 
Mexico. Tribal nations are sovereign nations and have the right to 
regulate their own trade agreements, especially those with other 
Indigenous entities.

    The Chairman. Well, we appreciate that, and you are a very 
good witness, and obviously you are well representing the 
American Indian Foods Program as its Director, and we really 
appreciate the Intertribal Agriculture Council's participation 
in this morning's hearing, and I am sure there will be 
questions. So, thank you.
    Our fourth witness today is Ms. Jen Sorenson. Ms. Sorenson 
is President of the National Pork Producers Council. In the 
past decade she has been with Iowa Select Farms, an Iowa 
farming business that markets more than five million hogs per 
year. She grew on her family's livestock farm, raising pigs and 
row crops, and we are looking forward very much to your 
testimony. So, Ms. Sorenson, would you please begin?

 STATEMENT OF JEN SORENSON, PRESIDENT, NATIONAL PORK PRODUCERS 
                   COUNCIL, WASHINGTON, D.C.

    Ms. Sorenson. Good morning, Chairman Costa, Ranking Member 
Johnson, and Members of the Subcommittee. Thank you for the 
opportunity to testify on U.S. Pork Producers trade policies. I 
am the Communications Director for Iowa Select Farms in West 
Des Moines, Iowa, and President of the National Pork Producers 
Council, which represents the interests of over 60,000 pork 
producers across the United States.
    Exports are crucial to the U.S. pork industry. Last year we 
exported nearly $8 billion of pork, and those exports accounted 
for \1/3\ of the average price received for every hog marketed, 
or $56. Those exports also supported well over 100,000 American 
jobs. The past few years have been incredibly difficult for hog 
farmers. After more than 3 years of trade retaliation that 
limited pork producers' ability to compete effectively around 
the globe, the COVID pandemic unleashed unprecedented 
challenges for the entire food supply chain. We have largely 
bounced back, and U.S. pork exports are on track to hit record 
highs, but still face some challenges.
    Our exporting success can be largely attributed to high 
market access outcomes negotiated under free trade agreements. 
U.S. pork exports have increased more than 1,800 percent in 
value, and over 1,700 percent in volume, since 1989, the year 
the United States implemented its FTA with Canada, and started 
opening international markets for value-added ag products. Not 
only to FTA/tariffs, they also are a great avenue for U.S. 
agricultural science-based standards to be accepted, and for 
broader non-tariff market access issues to be resolved.
    Policies that foster the free flow of goods and expand 
export markets, mostly through FTAs, are critical to the 
continued success of America's pork producers, U.S. 
agriculture, and the overall American economy. The bottom line 
is the United States needs more FTAs which eliminate or 
significantly reduce tariffs and non-tariff barriers to U.S. 
exports.
    U.S. pork producers have four trade priorities. First, 
preventing African Swine Fever from reaching our shores. An ASF 
outbreak in the U.S. would have catastrophic effects on U.S. 
pork domestically and abroad, and would negatively affect other 
protein sectors, such as corn and soy. This is why it is 
imperative we focus on prevention and planning. Second, better 
market access for U.S. agriculture in Asia through the 
negotiations of FTAs, including entering the comprehensive and 
progressive Trans-Pacific Partnership.
    Recently we have seen some successes in the Asia/Pacific 
region. Vietnam agreed to give better market access to U.S. 
pork through the reduction of tariffs. Vietnam agreed to reduce 
the MFN tariff for frozen pork from 15 percent to ten percent, 
with the reduction to enter into force on July 1, 2022. We are 
encouraged by the negotiations with Vietnam, and hope they lead 
to broader trade discussions. We want to thank the 70+ Members 
of Congress who signed the letter urging for these reductions 
in tariffs. Similarly, the Philippine Government announced it 
would increase its minimum access volume, its quota, and slash 
tariffs on pork to curb food price inflation caused by ASF 
outbreaks in that country. Since then, our exports there have 
increased by over 100 percent.
    Third, we welcome the recent announcement that the U.S. and 
EU have come to an agreement on the Section 232 steel and 
aluminum tariffs. We hope this leads to similar negotiations 
with China, ultimately eliminating the 25 percent retaliatory 
duty assessed by China on U.S. pork. And fourth, we must do 
more as a nation to address the severe supply chain issues 
affecting all parts of the U.S. economy. We are witnessing 
enormous backlogs at ports throughout the country. We hope to 
see swift passage of the Ocean Shipping Reform Act of 2021, 
which will address some of the issues plaguing U.S. exports. 
However, our supply chain issues go well beyond the ports, as 
we face tremendous labor shortages that affect not only our 
farms, but all aspects of the food chain.
    In conclusion, expanding access to new and existing markets 
is critical to the success and future growth of our industry. 
U.S. pork producers need Congress and the Administration to 
work together to quickly address these issues, enabling hog 
farmers to continue contributing to the rural and overall U.S. 
economy. Thank you so much for the opportunity to testify, and 
I look forward to questions.
    [The prepared statement of Ms. Sorenson follows:]

Prepared Statement of Jen Sorenson, President, National Pork Producers 
                       Council, Washington, D.C.
Introduction
    The National Pork Producers Council (NPPC), representing 42 
affiliated state associations, works to ensure the U.S. pork industry 
remains a consistent and responsible supplier of high-quality pork to 
domestic and international markets. Through public-policy outreach, 
NPPC fights for reasonable legislation and regulations, develops 
revenue and market opportunities and protects the livelihoods of 
America's more than 60,000 pork producers.
    The U.S. pork industry is a significant contributor to the economic 
activity of U.S. agriculture and the broader U.S. economy, marketing 
more than 131 million hogs in 2020. Those animals provided farm-level 
cash receipts of more than $22 billion.
    To produce those hogs, pork producers used roughly 1.1 billion 
bushels of corn and the soybean meal from 455 million bushels of 
soybeans in 2020. They also used roughly 5 million tons of distillers 
dried grains with solubles (DDGS), a major byproduct of corn ethanol 
production.
    Economists Daniel Otto, Lee Schulz and Mark Imerman of Iowa State 
University estimated that in 2016, the U.S. pork industry was directly 
responsible for the creation of more than 37,000 full-time-equivalent 
jobs in pork production and generated roughly 126,000 jobs in the rest 
of agriculture. In addition, the pork sector was responsible for 
124,750 jobs in meatpacking and processing and 33,400 jobs in 
professional services such as financial services, insurance and real 
estate. In total, the U.S. pork industry supports nearly 514,000 mostly 
rural jobs in the United States.
    Most importantly, U.S. pork producers in 2020 provided more than 28 
billion pounds of safe, wholesome, and nutritious meat protein to 
consumers worldwide.
Pork Exports
    Trade is vitally important to America's pork producers, who 
annually export over a quarter of production to more than 100 
countries. The pork industry exported $7.9 billion of pork in 2020, and 
those exports accounted for about $56 of the average price received for 
each hog marketed and supported 110,000 American jobs, according to 
Iowa State University economists.
    Despite COVID-19 and many other challenges, including trade 
retaliation from two of its top foreign markets, the U.S. pork industry 
exported a record amount of pork in 2020, and it is poised to set a new 
record this year. In fact, through September 2021, America's pork 
producers already had shipped to foreign destinations $6.7 billion 
worth of product compared with about $6.1 billion at the same point 
last year, a 9.6 percent increase.
    Annual exports of U.S. pork have been increasing for the past 
several years, generally because of improving economies and rising 
middle classes in countries around the world. Other factors also have 
driven those increases, including in some nations the emergence of 
robust hotel and restaurant industries--particularly as world travel 
has become relatively easier and cheaper--and disease challenges. A 
number of important U.S. export markets in Southeast Asia, for example, 
have been battling African swine fever (ASF) for the past several years 
so have needed to increase pork imports.
Trade Deals Key to Increasing Exports
    The biggest reason for U.S. pork export growth over the past 2 
decades is trade initiatives, whether free trade agreements (FTAs), 
less-formal trade and investment framework agreements (TIFAs) or one-
off market access deals. Through such initiatives, the United States 
moved from a net importer to a net exporter of pork in 1995.
    In fact, as a result of trade agreements, U.S. pork exports have 
increased more than 1,850 percent in value and nearly 1,750 percent in 
volume since 1989, the year the United States implemented its FTA with 
Canada and started opening international markets for value-added 
agriculture products.
    Since 2000, pork exports to FTA countries have increased 649 
percent, and in countries where the United States has negotiated 
preferential market access and where tariffs were slashed, pork exports 
increased tremendously. The chart below shows the trajectory of U.S. 
pork exports over the past 2 decades.
    In addition to FTA's granting better market access for U.S. pork, 
the agreements usually are the best avenue for U.S. agricultural 
science-based standards to be accepted and for broader non-tariff 
market access issues to be resolved.
    Policies that foster the free flow of goods and expand export 
markets--mostly through free trade agreements--are critical to the 
continued success of America's pork producers, U.S. agriculture and the 
overall American economy. The bottom line: The United States needs more 
FTAs, which eliminate or significantly reduce tariff on and non-tariff 
barriers to U.S. exports.
Annual U.S. Pork Exports


Success of FTAs
    Proof of that can be seen in the robust trade among the United 
States, Canada and Mexico under the 1994 North American Free Trade 
Agreement (NAFTA), which set a zero-tariff rate for pork, and, now, the 
U.S.-Mexico-Canada Agreement (USMCA), which updated the 25 year old 
NAFTA. In fact, Canada and Mexico are the top two destinations for U.S. 
goods and services, accounting for more than \1/3\ of total U.S. 
exports (Jan.-Sept. 2021) and supporting 14 million American jobs. 
Those jobs produce the nearly $1.4 billion of goods that are shipped to 
Canada and Mexico each day.
    While trade between the United States and Canada has been good 
since before the countries signed their FTA, trade between the United 
States and Mexico before NAFTA was somewhat anemic, totaling only $50 
billion each way in 1993. Today, U.S. exports to Mexico are valued at 
$212 billion and support 1.5 million U.S. jobs. U.S. agricultural 
exports to Mexico have grown nearly 292 percent since NAFTA was 
implemented.
    With regard to U.S. pork trade, Mexico and Canada were the No. 3 
and No. 4 export markets, respectively, for the U.S. pork industry in 
2020. From 1993, the year before NAFTA was implemented to 2020, U.S. 
pork exports to Mexico increased 16-fold, from just 98 million pounds 
to almost 2.1 billion pounds, and exports to Canada went from 36.4 
million pounds to nearly 500 million pounds.
    The United States has seen similar results after negotiating other 
FTAs, with the U.S. pork industry seeing growth in exports to 
Australia, Chile, Colombia, the DR-CAFTA countries--Dominican Republic, 
El Salvador, Guatemala, Honduras, Nicaragua and Panama--Peru, Singapore 
and South Korea.
    It must be pointed out that, contrary to critics--both here and 
abroad--FTAs do not negatively affect U.S. partner countries. The 
Mexican pork industry, for example, has grown significantly since NAFTA 
went into effect and U.S. pork exports to Mexico began increasing. 
Estimates are that from 1995 to 2020 pork production in Mexico 
increased by 60 percent. That rise was accompanied by--and often was 
the result of--improvements in disease prevention and eradication and 
in slaughter and processing plants and by a significant increase in 
Mexican consumer demand. Its surge in pork production also prompted 
Mexico to start exporting pork, including to the United States.
Looking East
    More recently, the U.S. pork industry has turned much of its 
attention toward the Asia-Pacific region because of its strong economic 
growth and the population's cultural preference for pork.
    In early 2020, for example, China and the United States struck the 
historic ``Phase One'' trade deal that helped boost U.S. pork exports 
to the Asian giant, which took in nearly $2.3 billion of American pork 
last year, making it the No. 1 value market for the U.S. pork industry.
    The United States is sending record amounts of pork to China 
despite that country's tariffs, including a 25 percent retaliatory 
duty--it had been 60 percent--on U.S. pork in response to U.S. tariffs 
on $34 billion of Chinese goods, including steel and aluminum and 
concerns with forced intellectual property transfers. U.S. pork tariffs 
are a cumulative 33 percent compared with eight percent for the rest of 
the world. The United States could be exporting more pork if not for 
the continued tariffs.
    Additionally, the Phase One deal with Japan went into effect on 
Jan. 1, 2020, which put U.S. pork on a level playing field with other 
major pork exporters, kept U.S. product flowing there--the U.S. pork 
industry's No. 2 market in 2020--and helped regain some of the access 
lost in Japan after the United States withdrew from the Trans-Pacific 
Partnership (TPP).
    In April 2021, after years of NPPC working with the U.S. and 
Philippine Governments, the Philippines announced it would increase its 
Minimum Access Volume (MAV) and slash tariffs on pork to curb food 
price inflation caused by ASF outbreaks in the country. U.S. pork 
exports to the Philippines have increased by 100 percent to over $122 
million since then. Although these are great results for U.S. pork 
producers, who have already seen the benefits, the tariff reductions 
are not permanent and are set to expire within 12 months. The U.S. pork 
industry continues to urge the Philippines Government to make the 
tariff reductions permanent. This is a major downside of not having a 
comprehensive trade agreement--tariffs reductions are seldom permanent.
    Also this year, Vietnam agreed to give better market access to U.S. 
pork through the reduction of tariffs. Although details have not been 
finalized, the pork industry is encouraged by the negotiations with 
Vietnam and hopes they lead to broader trade discussions.
    Now, the U.S. pork industry, through the advocacy of NPPC, is 
urging the Biden Administration to join the TTP's successor, the 
Comprehensive and Progressive Agreement for Trans-Pacific Partnership 
(CPTPP), whose 11 member-countries combined have 500 million consumers 
and a gross domestic product of $11.5 trillion, representing 13.5 
percent of global GDP.
    U.S. pork producers were strong proponents of the TPP, which in 
addition to the United States included 11 Pacific Rim countries, 
including Japan, which at the time of the TPP negotiations was the U.S. 
pork industry's No. 1 value market despite the United States not having 
a trade agreement with it. In fact, the prospects of shipping much more 
pork to the Asia-Pacific region under the TPP were so good, they helped 
prompt construction of five new pork packing plants across rural 
America.
Trade Promotion Authority and Preferential Trade Programs
    Almost every one of the FTAs the United States has concluded were 
made possible by the enactment of Trade Promotion Authority (TPA) 
legislation. TPA gave U.S. negotiators the ability to extract the best 
deals possible from trading partners. Without it, no country would be 
willing to make tough concessions to the United States for fear that 
Congress could subsequently demand more. That is why NPPC and nearly 
every other agricultural organization in the United States are in favor 
of Congress expeditiously reauthorizing TPA, which expired July 1 of 
this year. TPA lets U.S. trade representatives negotiate from a 
position of strength and prompts U.S. trading partners to cut to their 
bottom-line negotiating position.
    The U.S. Generalized System of Preferences (GSP) recently expired, 
too. GSP, which provides nonreciprocal, duty-free treatment of goods 
exported to the United States from beneficiary countries, also gives 
U.S. trade negotiators leverage when discussing market access with GSP-
eligible countries.
Supply Chain Issues Affecting U.S. Pork Trade
    There also are a number of domestic issues that could hamper 
exports, including a severe labor shortage--particularly at packing 
plants, which process and package product for export--and disruptions 
at America's shipping ports.
    With regard to U.S. ports, the United States is facing a massive 
backlog of containers waiting to be loaded into vessels and dozens of 
ships waiting to offload cargo at West Coast ports. Such disruptions 
are particularly acute for agricultural goods, many of which are 
perishable, including pork. A majority of farm products exported to the 
Asia-Pacific region route through the ports in Long Beach, Los Angeles 
and Oakland, Calif., and Seattle and Tacoma, Wash.
    In 2020, the U.S. pork industry sent 52 percent of its exports--$3 
billion worth--through the West Coast ports. But shipping delays are 
increasing costs to the industry and making the United States an 
unreliable trading partner.
    Frequent last-minute cancellations of U.S. pork shipments have 
undermined certainty and eroded trust with buyers in whom the pork 
industry has invested heavily to earn. Some large international 
retailers and restaurant chains are looking at sourcing pork from other 
countries rather than waiting for U.S. product. If shipping delays 
continue, more retailers are likely to follow suit.
    Congress and the Administration must address the ports issues or 
shipping delays may also negatively impact future trade negotiations 
with Southeast Asian trading partners. NPPC supports the ``Ocean 
Shipping Reform Act of 2021'' introduced by Reps. John Garamendi (D-CA) 
and Dusty Johnson (R-SD), which would address the issues plaguing U.S. 
exports.
    On the labor front, like much of agriculture, the pork industry is 
dealing with a lack of available workers. The shortage of labor was a 
problem before COVID and has been exacerbated by it, with some farms 
facing job vacancy rates as high as 30 percent despite offering record-
high wages and benefits. Many pork packing plants do not have enough 
workers to run second and/or Saturday and Sunday shifts, meaning supply 
is having a hard time keeping up with demand, including export demand.
    Reforming the existing H-2A visa to include year-round agricultural 
workers--currently, it allows only temporary seasonal labor--without a 
cap on the number of visas available, is the only solution given rural 
America's declining population.
    Finally, a wild card issue is ASF. While the swine-only disease 
actually has helped boost U.S. pork exports to some countries that are 
dealing with it, such as China, ASF now is in the Western Hemisphere 
(the Dominican Republic and Haiti) for the first time in more than 40 
years and poses a bigger threat to the United States than it did when 
it was confined mostly to Southeast Asia and Eastern Europe.
    The U.S. pork industry is working with USDA and other Federal 
agencies to help stop the spread of ASF and to prevent the disease from 
reaching the U.S. mainland. USDA recently asked the World Organization 
for Animal Health (OIE) to recognize Puerto Rico and the U.S. Virgin 
Islands, which neighbor the Dominican Republic and Haiti, as a 
``protection zone,'' a classification that allows the United States to 
maintain its current animal health status should a case of ASF be 
detected on either U.S. territory. Such an OIE designation is critical 
because it would let the United States, as an ASF-free country, 
continue exporting pork.
    NPPC commends Agriculture Secretary Vilsack for dedicating $500 
million in USDA Commodity Credit Corporation (CCC) funds for prevention 
of and preparation for ASF, a pig-only disease that would be 
devastating for the U.S. pork industry. The effects of ASF would 
reverberate through the farm economy, devastating not only for the pork 
industry but also other U.S. proteins and the corn and soy farmers who 
feed producers' animals. This is why NPPC also has been asking Congress 
for increased funding of $20 million for additional staff for the USDA 
Animal and Plant Health Inspection Service's Veterinary Services field 
force, $30 million to fully fund the National Animal Health Laboratory 
Network (NAHLN) and funding for additional Customs and Border 
Protection (CBP) agents and canine teams as authorized in P.L. 116-122, 
the Protecting America's Food and Agriculture Act of 2019.
Conclusion
    The importance of trade to the U.S. pork industry--indeed to the 
entire U.S. economy--cannot be overstated. America's pork producers get 
more than a third of their income from exports, and those exports 
contribute significantly to U.S. agriculture's positive balance of 
trade.
    Free, fair and reciprocal trade has helped the United States become 
an economic powerhouse. To maintain that station, the country must 
expand trade in existing markets and open new ones, and it must resolve 
issues that could negatively affect the ability to trade.
    For the U.S. pork industry, that means: joining the CPTPP; 
expanding market access in Southeast Asian countries such as Vietnam; 
getting China to remove its retaliatory tariffs on pork; renewing TPA; 
addressing the country's aging ports and labor shortage; and keeping 
the United States ASF-free.

    The Chairman. Thank you very much, Ms. Sorenson, for your 
focused testimony. And I will say that the efforts of this 
Subcommittee, and other Members, on the critical challenges 
facing the supply chain, I really look at it in two categories: 
and that is; one, short-term things that we can do to remedy 
the situation; and long-term efforts. The legislation that we 
have referenced, and that you noted, that Congressman Garamendi 
is carrying I think is very important. I put that more in the 
longer-term, along with the President's signing of the 
infrastructure package that will allow us an opportunity to 
expand our ports and harbors.
    But there are other parts of the supply chain that more 
immediately need our addressing, in terms of the ability to 
make trucking available, and other efforts to get these goods 
to ports. So it is all of the above, both the short-term and 
the long-term, that we need to be focused on, and we are going 
to try everything we can to focus on those comments that you 
made. So thank you very much.
    I would like to now defer to my colleague, the Ranking 
Member here from South Dakota, to introduce our fifth and final 
witness, who happens to be a constituent of his. Mr. Johnson.
    Mr. Johnson. Thank you, Mr. Chairman, and yes, our next 
witness is a South Dakotan, and I want to just share two 
thoughts about him. First off, he has a tremendous legacy of 
leadership on the farm. He is the fourth generation on the 
farm, and he has done a good job of raising the fifth, and I 
have to say, I mention the sixth generation coming up behind 
him as well. I have been on his family's land, and he has 
taught me about the impacts of drought on soybeans, and on 
corn, there on his property, and it is a remarkable legacy of 
leadership on the farm.
    But there is also a remarkable family legacy in advocacy. 
He is appearing before you today as President of the American 
Soybean Association, and he has done a good job in the last 
year on that front, but you shouldn't be surprised when I 
mention that his son, Jordan, is the President of the South 
Dakota Soybean Association. I guess, clearly that acorn didn't 
fall very far from the tree. By the way, it is Jordan's 
birthday today, so thank you to our witness for taking time 
away from his son. So without any further ado, Mr. Chairman, I 
am happy to introduce Mr. Kevin Scott, the President of the 
American Soybean Association.
    The Chairman. Well, that is an excellent introduction, my 
friend, and obviously you can extend, from the entire 
Subcommittee, a happy birthday wish to your son.
    Mr. Scott. Thank you.
    The Chairman. Please begin.

     STATEMENT OF KEVIN SCOTT, PRESIDENT, AMERICAN SOYBEAN 
                   ASSOCIATION, ST. LOUIS, MO

    Mr. Scott. Chairman Costa, Ranking Member Johnson, and 
Members of the House Agriculture Committee Livestock and 
Foreign Agriculture Subcommittee, it is an honor to testify 
before you today on trade policy and priorities of American 
soybean growers. My name is Kevin Scott, and I am a soybean 
farmer from South Dakota. I also have the privilege of serving 
as President of the American Soybean Association, which 
represented U.S. soybean farmers on national policy matters.
    International trade is a pillar of the U.S. soybean 
industry. More than 50 percent of U.S. soy was exported to 
foreign markets last year. Continued access to existing 
markets, and new ones, is critical to our long-term success. We 
need your support, and the Administration's support, to assure 
the free, fair trade that will keep U.S. soy farmers 
competitive. In the time allowed, I would like to discuss a few 
of our key trade priorities, though a full account can be found 
in my written testimony.
    Let me begin with China. China is the largest importer of 
soybeans in the world, and by far the biggest export market for 
U.S. soy. In 2020 and 2021 China imported almost 32 million 
metric tons of soy from the U.S. Exports to Mexico, our second 
largest export market, was just under 5 million metric tons, by 
comparison. We represent more than 35 percent of China's soy 
imports, with one in three rows of beans grown in the U.S. 
shipped to China to fill that demand.
    However, as the Committee is aware, U.S. soybean exports to 
China came to a halt during the 2018 trade war. At the height 
of disruption, U.S. soy's footprint in the Chinese market 
reached a little over 12 percent. The same year, Brazilian 
imports captured nearly 75 percent of the China market. Soy 
growers began building the China market for U.S. beans more 
than 40 years ago. They are keenly aware of what it takes to 
establish new markets, and likewise that markets, once lost, 
are extremely difficult to rebuild.
    The China Phase One deal has been critical to providing 
relief from retaliatory tariffs levied by China on U.S. soybean 
imports, but the agreement expires after 2021. There is still 
work to be done, particularly regarding ag biotech, which has 
been a major barrier to bringing new soybean traits to U.S. 
producers. We encourage USTR to hold China accountable to its 
biotech commitments made under the Phase One agreements.
    U.S. soybean growers need predictability and certainty that 
we can retain market access in China. The past several years 
have been extremely difficult for our industry, and we are now 
forced to compete with Brazil and Argentina, who, recognizing 
our trade friction with China, increased soy production, and 
cut into global markets well beyond China.
    Turning to Mexico, and the importance of free trade 
agreements, under NAFTA, U.S. soybean exports to Mexico 
tripled, and again Mexico is now our number two export market. 
When President Trump announced his intent to renegotiate NAFTA, 
ASA's ask was do no harm. We were pleased USMCA maintained our 
existing market access, but recent events in Mexico are 
concerning. The government has not approved a new biotech 
product for import since 2018, and recently it rejected a 
pending biotech corn application without scientific 
justification. These actions are contrary to ag biotech 
provisions in USMCA to which Mexico committed, provisions we 
feel are the gold standard.
    Right now U.S. soybean exports to Mexico are unhindered, 
but the consequences of these actions, or lack thereof, could 
impact future trade. If new seed varieties cannot get approval 
in both Mexico and China, developers may decide not to 
commercialize new traits. We urge President Biden to address 
these issues directly with President Lopez Obrador. The U.S. 
was once a leader in establishing new free trade agreements, 
but our last new free trade agreement entered into force in 
2012, despite the U.S. having negotiated the Trans-Pacific 
Partnership. That is nearly 10 years of inactivity for codified 
market expansion that could have helped U.S. agriculture.
    While the U.S. remains idle, our international competitors 
forged ahead. Six new and significant regional trade agreements 
now include preferential tariff treatment for ag products from 
our competitors. We encourage the Administration to negotiate 
re-entry into CPTPP, and for USTR to use FTAs to maximize our 
strategic position in the global economy, and give U.S. 
agriculture much needed market access in emerging markets. 
Last, we would love to see a doubling of MAP and FMD funds.
    This only scratches the surface of ASA's trade priorities. 
Again, a full list is in my written testimony. Thank you 
sincerely for holding this hearing, and the opportunity to 
testify.
    [The prepared statement of Mr. Scott follows:]

    Prepared Statement of Kevin Scott, President, American Soybean 
                       Association, St. Louis, MO
Introduction
    Chairman Costa, Ranking Member Johnson, and Members of the House 
Agriculture Committee Livestock and Foreign Agriculture Subcommittee, 
it is an honor to testify before you today on trade policy and the 
priorities of American soybean growers. My name is Kevin Scott. I am a 
soybean farmer from Valley Springs, South Dakota, and I have the 
privilege of serving as President of the American Soybean Association 
(ASA). Our association, founded in 1920, represents all U.S. soybean 
farmers on domestic and international policy issues important to the 
soybean industry. ASA has 26 affiliated state associations representing 
more than 500,000 farmers in 30 soybean-producing states.
    The U.S. soy industry has a profound, positive impact on the U.S. 
economy. We have long been U.S. agriculture's #1 export crop, and a by-
the-numbers look demonstrates soy's value to our domestic economic 
health. USDA projects 86 million acres of soy will be harvested in 
2021, with a record production forecast of 4.4 billion bushels. Soybean 
production alone accounts for close to 150,000 jobs, more than $6 
billion in wages and $86.5 billion in revenues, according to a recent 
study\1\ by the United Soybean Board/Soy Checkoff and National Oilseeds 
Processors Association. This does not even include secondary soy 
markets and supporting industries like biodiesel, grain elevators, feed 
mills, ports, rail, refining, barges, etc., which bring soy's national 
revenue impacts to a significant $115.8 billion.
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    \1\ https://soygrowers.com/wp-content/uploads/2020/09/
1USB_QSSB_Economic_Impact_of_
Soybeans_National.pdf.
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    As that price tag would convey, international trade is one of the 
pillars of the U.S. soybean industry. Exports to foreign markets were 
more than 50% of U.S. soy production this last marketing year. 
Continued access to those existing markets, new markets, and 
international food aid markets are critical to sustaining U.S. soybean 
growers' success. To that end, ASA works to promote U.S. soy's quality 
and uses overseas through both its World Initiative for Soy in Human 
Health (WISHH)--ASA's long-term market development program--and partner 
organization, the U.S. Soybean Export Council (USSEC). Support from the 
Administration and Congress is vital to assure the free and fair trade 
needed to keep U.S. soybean growers competitive and bolster ASA's 
efforts with both WISHH and USSEC.
China
    China is the largest importer of soybeans in the world and is the 
biggest export market for U.S. soybeans. In marketing year (MY) 2020/
21, China imported 99.8 million metric tons (MMT). Comparatively, U.S. 
soybean exports to Mexico--our second largest export market--only 
totaled 4.9 MMT for that same year. Right now, U.S. soy represents more 
than 35% of China's soy imports, and one in three rows of beans grown 
in the U.S. is shipped to China to fill that great demand. Further, 
USDA expects China's demand for imported soybeans to increase to 100.0 
MMT in MY2021/22 because China's hog herd has now largely recovered 
African Swine Fever, which has plagued the country the last 3 years.
    It is critical to note that soy exports to China are still down 
compared to MY2016/17 levels. As the Committee is aware, U.S. soybean 
exports to China not only plummeted--but essentially halted--during the 
trade war with China that began in spring 2018 and escalated that 
summer. In 2017, China was a $14 billion+ market for U.S. soy. 
Contrarily, at the height of the disruption, U.S. soy's footprint in 
the Chinese market reached only 12.5%. That same year, Brazilian 
imports captured nearly 75% of the Chinese market. U.S. soy growers 
started building the China market for U.S. beans more than 40 years 
ago. Thus, soy growers are keenly aware of the time, financial and 
related investments it takes to establish new markets and are likewise 
aware that markets, once lost, are extremely difficult to rebuild.
    The China Phase One deal was instrumental in providing relief from 
the tit-for-tat, retaliatory tariffs levied on U.S. soybean imports by 
China in 2018, and that reprieve--while not yet permanent--has been 
beneficial for U.S. soybean growers. Now, the Phase One agreement will 
expire at the end of 2021. While soy and other trade has resumed to 
more normal levels, there is still work to be done, particularly 
regarding biotechnology, which has been a major barrier to bringing new 
soybean traits to U.S. producers.
    China continues to maintain an asynchronous approval process for 
biotech events, and there is often a backlog of unapproved traits. For 
reference, approvals typically take 6 years, and the regulatory 
procedures and timelines are opaque and unpredictable. ASA has for 
years implored our leaders insist China make real progress in 
establishing a more predictable, timely and transparent approval 
system.
    Under Annex 16 of the Phase One agreement, China is required to 
reform its agricultural biotechnology approval process. This includes a 
requirement to reduce the average approval time to 24 months, base its 
safety evaluation processes on international standards and 
recommendations, and implement new procedural steps designed to 
facilitate approval of biotechnology products considering the intended 
use.
    We encourage the Office of the U.S. Trade Representative to hold 
China accountable to its biotech commitments made under the Phase One 
agreement. The trait approval process should be a function of a 
consistent and efficient regulatory system. However, without the U.S. 
Government pressing the Chinese on this reform, it will take much 
longer for new seed varieties to be made available to U.S. soybean 
growers, which has implications for productivity, weed control, 
quality, environmental footprint and more. Compounding the situation, 
China's lack of willingness to quickly and efficiently approve traits 
can preclude seed manufacturers from being amenable to developing more 
new and improved seeds--a costly process--and those seeds from then 
being ready and available for approvals by other countries, which are 
proportionately smaller markets and not always ``worth the effort'' of 
those manufacturers if not approved for use by China.
    ASA remains concerned about the ongoing effects of Section 301 
tariffs on the trade environment. As noted, the Phase One agreement did 
not lift retaliatory tariffs on soybean exports but instead created a 
waiver process under which importers can request U.S. soy be imported 
at normal duty rates. While the waiver process is functional and 
resulted in near record levels of exports in the 2020/21MY, the waiver 
process is not guaranteed by China and could change at any time, 
resulting in elevated tariff levels that would again significantly 
impact U.S. exports.
    Regarding products imported into the U.S., several critical inputs 
from China are still subject to tariffs by the U.S. Government. These 
include fertilizer inputs such as phosphate, as well as several key 
chemistries on which soybean growers rely for crop protection. We 
encourage the Administration to closely reexamine the efficacy of these 
tariffs and expand the exclusion process for products widely used in 
agriculture to avoid compounding their negative impacts.
    The outlook for U.S.-China relations is unclear, and our global 
competitors are aware of this situation. ASA understands that there are 
myriad geopolitical issues facing the U.S. when it comes to negotiating 
with Beijing, and we are supportive of the U.S. Government finding a 
long-term solution to these longstanding issues.
    However, U.S. soybean growers need predictability and certainty 
that we will retain market access in China. The past several years have 
been extremely difficult for the U.S. soybean industry. While we have 
regained some market share in China, we now are forced to compete much 
harder with South American countries than before 2018, not just with 
their exports to China but with their increased soy sales around the 
world; those other countries, for instance Brazil and Argentina, have 
increased soy production as a result of our ongoing trade friction with 
China.
Mexico
    Mexico offers a great example of a non-tariff tool that can be 
highly effective: the free trade agreement (FTA). Under NAFTA, U.S. 
soybean exports to Mexico tripled, and Mexico is now the #2 market for 
whole U.S. soybeans, soybean oil and soybean meal. U.S. beans exported 
to Mexico have grown exponentially, and those market gains speak to the 
possibilities for American agriculture when utilizing these multi and 
bilateral agreements.
    Before the entry into force of the North American Free Trade 
Agreement (NAFTA), Mexico imposed a seasonal tariff of 15% on soybeans. 
Under NAFTA, Mexico immediately reduced this tariff to 10% and 
shortened the dutiable season from Aug. 1-Jan. 31 to Oct. 1-Dec. 31. 
This tariff was phased out by 2003. Mexico had tariffs of 15% on 
soybean meal, 10% on crude soybean oil, and 20% on refined soybean oil. 
These restrictions were also phased out over 10 years.
    When President Trump announced his intent to renegotiate NAFTA into 
what became the U.S.-Mexico-Canada Agreement (USMCA), ASA's topline 
message was ``do no harm.'' We were pleased to see the new agreement 
maintained our existing market access and included improved language 
around regulatory transparency, sanitary and phytosanitary issues, and 
other technical matters.
    Recent events in Mexico are, however, cause for concern. Under the 
Administration of President Lopez Obrador, Mexico has not maintained a 
science-based approval process for agricultural biotechnology. The 
government has not approved a new biotechnology product for import 
since 2018 and recently rejected a pending biotech corn application 
without any scientific justification. Currently, there is a backlog of 
25 biotechnology traits pending approval in Mexico. These actions are 
contrary to provisions Mexico committed to regarding agricultural 
biotechnology in USMCA, which we see as the ``gold star'' of 
biotechnology provisions in existing FTAs.
    I want to be clear: At this moment in time, U.S. soybean exports to 
Mexico are unhindered. Yet, we continue to sell our product to Mexico 
with a wary eye on the future. These actions, or lack thereof, 
regarding Mexico's approval process are concerning to ASA for two 
primary reasons.
    First, Mexico's current approach to biotechnology and seeming 
adoption of the ``precautionary principle'' model of regulation is the 
exact opposite of what Mexico committed to uphold when it ratified 
USMCA. If the U.S. does not hold our closest trading partner 
accountable to its commitments, what message does that send to the rest 
of the world?
    Second, while there are no soybean traits of note pending in 
Mexico, ASA is strongly concerned with the long-term consequences and 
lingering effects of this lack of regulatory approval. The longer this 
issue lingers in Mexico, the greater the odds are that this will have a 
trickle-down effect on the availability of new biotechnology products 
for U.S. soybean growers or increase the risk for trade disruption. If 
a new seed variety cannot get approval in Mexico, developers--as 
mentioned with China--may choose not to commercialize new traits, which 
would decrease the availability of new varieties for our farmers. In 
turn, this could have a negative effect on the sustainability of U.S. 
farmers.
    ASA strongly urges President Biden to address these issues directly 
with President Lopez Obrador, and we stand ready and willing to help in 
any way we can.
Bilateral and Multilateral Engagement
    Trade promotion and market access are major priorities for the U.S. 
soybean industry. Tariff and non-tariff barriers to trade are frequent 
problems for our exports, and these barriers limit the potential for 
predictable global market access for soybeans, soybean meal and soybean 
oil. Barriers facing U.S. soybeans and soy products include tariffs and 
quotas, unjustified or risk-unproportionate sanitary and phytosanitary 
measures, and rules and regulations not based in science. These 
obstacles distort markets and reduce the potential for U.S. soy 
exports.
    We have been heartened to see the Administration take actions with 
the European Union in resolving the longstanding dispute on aircraft 
subsidies, as well as resolution on the Section 232 tariffs on steel 
and aluminum from the EU. However, we remain greatly concerned with the 
current U.S. approach to bilateral and multilateral agreements. The 
U.S. was once a leader in establishing new free trade agreements. 
Nevertheless, the FTA landscape has changed considerably since the last 
new U.S.-based FTA with Columbia was signed. While the U.S. has engaged 
in negotiations of existing agreements such as USMCA and the updated 
U.S. Korean Free Trade Agreement (KORUS), our last new FTA entered into 
force in 2012, despite having negotiated the Trans-Pacific Partnership 
(TPP). That is nearly 10 years of stagnation for codified market 
expansion for U.S. agriculture.
    While the U.S. has remained idle, our international competitors 
have been extremely active in forging ahead with new multilateral 
agreements. Six large, regional trade agreements have recently 
concluded and include preferential tariff treatment for agriculture 
products. These agreements include the Comprehensive and Progressive 
Agreement for Trans-Pacific Partnership (CPTPP), the EU-Japan Economic 
Partnership Agreement, the EU-Canada Comprehensive Economic and Trade 
Agreement (CETA), the EU-Mercosur FTA, the EU-Ukraine Deep and 
Comprehensive FTA, and the Regional Comprehensive Economic Partnership 
(RCEP).
    American agriculture does not benefit from any of these agreements. 
Our competitors will see preferential market access for their products 
and increased market access while the U.S. sits on the sidelines.
    ASA recognizes that the international landscape has changed since 
the U.S. first negotiated the original TPP, and we are grateful for 
Ambassador Tai's leadership both during those negotiations and now in 
her role as the U.S. Trade Representative. Continued market access in 
the Indo-Pacific region is of critical importance to the continued 
success of U.S. soybean growers. Outside of China, several of U.S. 
soy's top ten export markets are in the region: Indonesia, Japan, 
Taiwan, Thailand and Bangladesh.
    The importance of expanded market access for U.S. soybean exports 
cannot be overstated, particularly if we are to diversify our export 
markets and decrease our reliance on the Chinese market. An original 
intent of TPP was to create a hedge around China, and ASA still 
believes that agreement holds tremendous potential for U.S. 
agriculture. We strongly encourage the Administration to reengage in 
negotiations for reentry into the CPTPP. Furthermore, we encourage USTR 
to look to multilateral free trade agreements to maximize the U.S.'s 
strategic position in the global economy and to give U.S. agriculture 
much-needed market access in emerging economies.
World Trade Organization Reform
    ASA is encouraged to see the U.S. reengaging with the World Trade 
Organization (WTO). The benefits of free and fair trade to U.S. 
agriculture are greatly enhanced by well-defined rules and functional 
international institutions. However, flaws in the WTO system have 
become apparent over the past several years, and reform is badly 
needed. It is up to the U.S. to lead our trading partners in reforming 
the WTO. We are under no illusions about the difficulty of this task. 
Success, however, would serve as a lasting achievement that would 
benefit U.S. agriculture for years to come.
    We understand there is skepticism toward the importance of the WTO. 
However, ASA and U.S. soybean growers are supportive of the WTO and 
want it to function well. ASA, alongside several other agricultural 
stakeholders, have come together with a set of policy recommendations 
for the U.S. in the leadup to the Twelfth Ministerial Conference of the 
WTO, to be held the week after U.S. Thanksgiving in Geneva, 
Switzerland.
    Ultimately, WTO reform needs to include: (1) an effective dispute 
settlement system, (2) compliance of WTO-member countries in 
implementing current commitments, and (3) more market-oriented support 
for farmers and reduced protection so U.S. agriculture can sell more 
product to our global customers.
Emerging Markets
    Last year, the U.S. formally launched negotiations for a 
comprehensive free trade agreement with Kenya. While those talks are 
currently paused while the Administration reviews its trade policy 
priorities, U.S. soy sees tremendous potential in expanded access to 
the African market. An FTA with Kenya would represent the U.S.' first 
FTA with a sub-Saharan African nation. Should we gain market access in 
that country, it could represent a shifting of the tide and present a 
counter to the prevailing skeptical European attitudes toward modern 
agriculture.
    In 2017, our partner organization, USSEC, embarked on a strategy to 
diversify U.S. soy's export markets and increase investments in 
emerging markets around the world. Many of those countries import 
relatively small amounts of U.S. soy or none at all (as is the case of 
Kenya). At the same time, some of those emerging markets represent good 
opportunities for growth in the medium to long-term future due to their 
growing populations and middle class.
    A 2019 report on U.S. soy export opportunities in Kenya found there 
is a demand for soybean meal as the preferred protein source for animal 
feed manufacturers. However, in-country production is limited, and 
Kenya imports around 200,000 MT of soy per annum from Uganda, Zambia 
and Malawi. With its growing population and economy, the demand for 
animal feed in Kenya is expected to grow further. However, there is 
currently a large obstacle facing U.S. soy. In 2012, Kenya implemented 
an import ban on genetically modified crops following the publication 
of an inflammatory--and since-retracted--report that claimed herbicide-
tolerant corn caused cancer in rats. This report, while responsible for 
a flurry of anti-biotechnology activity, has been widely discredited 
and, as mentioned, ultimately was retracted. However, the damage was 
done, and the ban remains in place.
    ASA strongly supports reengagement in bilateral talks with Kenya as 
a way to ease this ban on imports of genetically engineered crops. 
Furthermore, an FTA with Kenya could open the door to future 
partnership with other African nations.
    While Kenya may represent our current best hope for an FTA, U.S. 
soy has not been idle on the African continent. Through ASA's long-term 
market development program, WISHH, U.S. soy has been hard at work 
increasing the demand for high quality soy protein used as livestock 
feed to meet the world's protein needs. WISHH identifies markets that 
demonstrate growth potential. Working with key in-country stakeholders, 
WISHH then works within those systems to build resiliency in trade 
while positioning U.S. soy as a protein partner for the future.
    On the African continent, WISHH recently completed a 5 year project 
in Ghana that aims to improve the quality of poultry feed and its 
accessibility to poultry producers. Through working on the ground in-
market, WISHH worked with stakeholders at Kansas State University and 
the Adventist Development and Relief Agency to educate farmers about 
grain storage and quality. Through demonstrations, poultry farmers were 
taught to maximize the efficiency of feed to decrease production costs 
and increase flock health. This in turn showed the benefits of using 
soy as the primary protein source for Ghanian chickens. As a result, 
this project helps meet Ghana's protein needs through increased egg 
consumption.
    Looking outside the African continent, U.S. soy sees continued 
promise in emerging markets in Southeast Asia. In Cambodia, fish are an 
integral part of the diet, but wild-caught fish account for more than 
75% of the domestic market. Local officials recognize the unsustainable 
nature of the domestic fish market and have turned to aquaculture to 
meet demand for freshwater fish.
    Another WISHH project, CAST (Commercialization of Aquaculture for 
Sustainable Trade), is working in-country to address this challenge. 
The project is designed to accelerate production of high-demand fish 
species for the Cambodian market and develop a lasting aquaculture 
industry that recognizes the value of soy protein in feed. CAST will 
impact all aspects of the aquaculture value chain, including 600 
commercial fish farmers, input suppliers and the buyers of farmers' 
fish production.
    WISHH has also worked on aquaculture projects in Cambodia and 
Tanzania. Development of these emerging markets is part of U.S. soy's 
long-term market expansion vision. The in-country work done by WISHH 
today will, we hope, pave the way for deeper inroads for U.S. soy in 
these regions.
Congressional Action
    The long-term success of U.S. soy abroad would not be possible 
without the foresight of Congress to create programs at USDA to assist 
trade associations in promoting our products on a global stage. ASA is 
a longtime cooperator of these programs, particularly the Market Access 
Program (MAP) and the Foreign Market Development Program (FMD). 
Utilizing MAP and FMD funds, ASA--through WISHH and USSEC--has 
leveraged those dollars to increase market access, address technical 
barriers to entry, and create on-the-ground capacity and demand for 
U.S. soy. These cost-share programs are an excellent example of public-
private partnership.
    Over the life span of these programs, however, industry funds have 
risen dramatically while funding from the U.S. Government has remained 
stagnant. Seventy-seven percent of total annual spending on market 
development and promotion now comes from industry dollars, which are up 
from just 45% in 1996.
    While these programs have been greatly successful, it is concerning 
that government investment levels have remained mostly unchanged--even 
as the number of cooperators to these programs has increased. FMD has 
been funded at the same level--$34.5 million annually--for 18 years, or 
since 1997, and MAP funding has been level at $200 million since 2006. 
As we look toward the 2023 Farm Bill, ASA strongly support efforts to 
double these funding numbers to $400 million for MAP and $69 million 
for FMD.
    Finally, ASA strongly encourages Congress to reauthorize Trade 
Promotion Authority (TPA). TPA is an important tool in the toolbox for 
the U.S. to engage in FTA negotiations. Ensuring TPA is in place will 
not only allow the President a chance to codify both the priorities of 
his Administration and Congressional intent in negotiating procedures, 
but also it will give assurance to our trading partners that there will 
be a straightforward procedure in the U.S. Congress for consideration 
of a final deal. We urge Congress to begin discussions with the 
Administration to move TPA reauthorization forward when Congress 
reconvenes in the new year.
Conclusion
    Chairman Costa, Ranking Member Johnson, and Members of the House 
Agriculture Committee Livestock and Foreign Agriculture Subcommittee, 
thank you again for the opportunity to testify on behalf of U.S. 
soybean farmers regarding our industry's priorities for international 
trade policy. As you have read throughout my testimony, continued 
market access and expansion is the lifeblood of the American soybean 
grower. Through sound trade policy and actions by the U.S. Government, 
U.S. soy farmers will continue to grow high-quality soybeans to meet 
the increasing demands of the global economy and remain a positive 
contributor to our U.S. economy.
    The soy industry stands ready to work with the Committee and 
Subcommittee, Congress, and the Biden Administration to implement a 
trade policy that is beneficial to American workers, consumers and 
farmers. Thank you.

    The Chairman. Thank you very much, Mr. Scott, for your 
focused testimony, and, as we begin to set the table next year 
for the reauthorization of the farm bill, your comments, and 
Mr. Stenderup's comments, as it relates to the Market Access 
Program, and the success that we have had, I remember back in 
2008 and 2010, as we try to expand its efforts. And so 
certainly I think there are opportunities here, and I think it 
was timely for you to note them in your testimony.
    We have now gotten to that part of the hearing where 
Members will be allocated 5 minutes, as I said earlier, 
alternating between Republicans and Democrats, to make comments 
and ask questions. And I will take the prerogative of the Chair 
to begin, and to use my time to ask some questions and make 
comments that I think you posed by the testimony you have 
given.
    Mr. Stenderup, you talked about the unique challenges of 
specialty crops, which we in California, as you know, like to 
think we do as well as anyone in the world, but what unique 
challenges do you see, in terms of trade, that we can better 
focus our efforts to maintain a competitive edge? Mr. Kent, are 
you there?
    Mr. Stenderup. Yes, I am, Chairman Costa, and thank you for 
the question. Specialty crops have a unique challenge, and they 
are--I am not going to say up against the program commodities, 
but that is basically what it is, particularly when it comes to 
MAP funding. And since you almost asked me, I too believe we 
should double the MAP funding from the--I believe it is at $200 
million now, and it should be easily--it could be utilized at 
$400 million, and I truly believe that.
    The unique challenges for specialty crops are there are 
just so many specialty crops. They don't have the 
infrastructure themselves to promote and distribute like the 
program crops, the larger commodities. So we have had, with 
Sonny Perdue, and then we have had good experience now also 
with the current Administration as far as recognition of 
specialty crops.
    The Chairman. Let us keep that thought in mind as we 
proceed with the reauthorization next year, and build a 
coalition of support for that effort. Mr. Vander Woude, you 
have, in your testimony, talked about the importance of our 
trade agreements, not just with our neighbor to the south, 
Mexico, but also with Canada, the challenges we have had with 
dairy exports. Mexico, of course, is one of the larger 
importers of white cheese, and of course as was noted, our 
periodic problems with Canada. I am thinking there is an 
opportunity here, though, and it has always been a challenge, 
with European Union. How do we get past the inclusion of 
geographical indicators in trade agreements between the EU and 
other trading partners that impact our dairy industry?
    Mr. Vander Woude. So, yes, it has been a common practice of 
the EU to use GIs in a lot of their free trade agreements, 
which, in effect, just locks us out by the products that we 
produce here in the U.S. with what we consider to be common 
food names. They get those locked out in so many other 
countries that we lose access to those countries with those 
products. And if you take gouda, and you try to sell it as a 
garma cheese or something, nobody is going to know what it is. 
They all know it is gouda. They all know that it is brie, or 
whatever. And so it has been a common practice of the EU to 
slap those into their free trade agreements with other 
countries.
    The Chairman. Well, in another capacity I work with members 
of the European Union, and I am suggesting that maybe we look 
at getting their--our counterpart of the committee jurisdiction 
in the European Parliament to meet with ours to really see if 
we can get past the politics, and work through some of this.
    Ms. Redhouse, you mentioned in your testimony that some 
longstanding policy and administrative problems need to be 
remedied for Native producers to be able to have access to 
international markets. I assume that is why you are in Doha. Do 
you have anything specific you want to talk about to that 
access?
    Ms. Redhouse. Yes, definitely. So one of the biggest 
hurdles--but I also should start off with echoing Kent's and 
Simon's deep appreciation for the Market Access Program. As a 
recipient of MAP, it has been really helpful in increasing our 
visibility with different international markets. But, what we 
are trying to advocate on behalf of our constituents is to 
increase Tribal producers' presence on the world ag stage, and 
some of our producers do have trouble with meeting different 
regulation requirements, or different labeling requirements. It 
is a huge hurdle to cover costs for a lot of those specific 
activities, and so I think most often our producers find that 
as just one of the biggest challenges to enter the 
international marketplace.
    The Chairman. Thank you. Two of the previous witnesses made 
reference to the Trans-Pacific Partnership, and I think that 
was a missed opportunity, and suggested that we reconsider re-
engaging with the TPP. Are your organizations prepared to 
support that effort formally?
    Mr. Vander Woude. Dairy is willing to support that, 
definitely.
    The Chairman. Mr. Stenderup?
    Mr. Stenderup. Yes, I agree with the re-inventing of the 
TPP also.
    The Chairman. Thank you. Well, my time has expired, and I 
will recognize my colleague from South Dakota, Mr. Dusty 
Johnson, for 5 minutes.
    Mr. Johnson. Yes. I will ask the same question to Mr. 
Scott, Ms. Sorenson, and Ms. Vander Woude, and they can respond 
in that order with about 45 seconds or less apiece, if they 
could. First off, I just want to know, for your products, where 
do you think the best opportunity for expanding market access 
via free trade agreements would be? And then secondarily, if 
there is a particular marketplace where you feel like producers 
have been disadvantaged because countries in Europe or Asia 
have not stood still, they have advanced free trade agreements 
with other marketplaces, and as a result, America is at a 
relative disadvantage, talk to us about what those marketplaces 
would be. So, Mr. Scott?
    Mr. Scott. Well, yes, expanding those markets is critical, 
and we kind of figured that out when the tariffs hit from 
China, shut us down in that market, which was taking a huge 
portion of our export. We decided then that diversifying our 
basket, putting all our eggs in all--not in that one all--all 
one basket we are--was important, and--so we had been pushing 
hard to develop other economies and markets in the Asian 
continent, all over, African continent, even some of the 
European markets that we had been shut out of previously, we 
want to continue to push for those. So market access and 
development is critical for us.
    Mr. Johnson. Is there one top priority you think USTR 
should be most focused on, relative to soybeans?
    Mr. Scott. Well, soybeans are a fantastic supply of protein 
for especially protein-deficient countries, and so where there 
is a need for building human health, those are critical issues 
for us, and we want to supply that need.
    Mr. Johnson. Ms. Sorenson?
    Ms. Sorenson. Yes, thank you. I would start off by saying 
our U.S. exports into China are still faced with a 25 percent 
retaliatory duty, when our competitors are faced with only 
eight percent. Second, we support entering TPP, or CPTPP, if 
tariffs are reduced. So we are very passionate about entering 
into this trade agreement. It has significant market potential 
for U.S. pork producers, especially given the number of 
countries at the table, and the 50 million consumers that are 
part of the agreement.
    So, yesterday's announcement on Vietnam was progress. That 
tariff will be reduced to ten percent, but CPTPP countries are 
at 7.5 percent, and will be reduced to 5.6 percent in 2022, 
putting U.S. pork at a disadvantage.
    Mr. Johnson. Very good, thank you. Mr. Vander Woude?
    Mr. Vander Woude. Yes. I will say, for us, China is 
definitely--it is everyone's market. We have a 30 percent 
tariff rate quota there, compared to New Zealand at zero, so 
that is a big one. Vietnam used to be our largest customer for 
milk powders. Today we have been locked out of that country due 
to tariff rate quotas. Southeast Asia is our target, especially 
coming from the West Coast, for California dairies and American 
dairies, Asia is our target for trade agreements, and we have 
been--the TPP was something we worked very hard on, and we hope 
that can be resurrected at some point to at least gain access 
to some of those countries.
    Mr. Johnson. So Southeast Asia is the most key market, Mr. 
Vander Woude, from a dairy perspective. Do we feel like the 
Administration has been proactive enough in advancing FTAs in 
that region?
    Mr. Vander Woude. No. No, not at this point.
    Mr. Johnson. And then doubling back to Ms. Sorenson, I 
think you gave a great answer about China, and the disparate 
tariffs there. Are you getting much of a sense that we are 
making progress vis-a-vis reducing those retaliatory tariffs 
from China on pork?
    Ms. Sorenson. The Phase One agreement and ASF has created a 
really large demand for pork around the world, but I continue 
to say the problem that needs a resolution is our trade 
retaliatory tariff of 25 percent on U.S. pork. Again, we face a 
33 percent tariff, where our competitors face eight, and that 
is our biggest setback right now, as we look at the opportunity 
that we have in China.
    Mr. Johnson. And so when pork talks to the Administration, 
do you get a sense that they have some urgency behind resolving 
that issue, ma'am?
    Ms. Sorenson. No.
    Mr. Johnson. Very good. Thanks, Mr. Chairman. I yield back.
    The Chairman. The gentleman's time has expired. The Chair 
will now recognize the gentlewoman from Virginia, Abigail Davis 
Spanberger.
    Ms. Spanberger. Thank you very much, Mr. Chairman, and 
thank you so much to our witnesses for being here today. This 
hearing is a very timely one, and so I am grateful for your 
testimony, and the answers to our questions. Across central 
Virginia I have heard from dairy farmers, cattlemen, livestock 
producers, small business owners, and families trying to buy a 
gallon of milk, and about the challenges that they are facing, 
day to day related to so many of the disruptions that we have 
seen in the supply chain.
    One way that we know we can reduce supply chain bottlenecks 
is by supporting free and fair trade policies that protect 
American workers and businesses, and reduce the barriers of the 
flow of goods across the globe. That is why I was proud to work 
alongside my House colleagues, and the former Administration, 
to help secure bipartisan support, ultimately, for the passage 
of the USMCA last Congress. And so, as this deal continues to 
be implemented, I want to make sure that we are working to 
confirm that all parties are upholding their end of the deal.
    And to that end, Mr. Vander Woude, I would ask a question 
of you first. Central Virginia is home to many dairy farms, and 
certainly they are facing significant challenges, as the 
industry is across the board. And I share your concerns related 
to the enforcement of the dairy provisions in that deal, and so 
my question for you is what more could Congress be doing to 
support the industry, and ensure that all parties live up to 
their commitments in that deal?
    Mr. Vander Woude. Yes, thank you for the question. The 
decision to--have a big impact, but for my counterparts in the 
Northeast and the Upper Midwest, it is a big deal. We strongly 
support the dispute settlement process, and we appreciate the 
bipartisan Congressional backing that ultimately led to that 
step. It is not only the enforcement area that we need to see 
action on, though. For instance, in Mexico, overly burdensome 
regulatory proposals threaten to disrupt trade. In Colombia 
they are weighing imposing higher tariffs that would derail our 
free trade agreement on milk powder exports, so this happens 
not just with Canada and Mexico, it is happening all over the 
place, and we appreciate the support we have gotten from the 
USTR office thus far, but we continue to need not only support, 
but action.
    Ms. Spanberger. Okay. Thank you for that, and certainly I 
would love to follow up in the future if there are any other 
priorities or suggestions that your organization has into the 
future. I do have a second question for you, and ultimately for 
Ms. Sorenson. Mr. Vander Woude, in your testimony you mentioned 
supply chain challenges, and the need to pass the Ocean 
Shipping Reform Act. I am proud to cosponsor this bill. I 
believe, and I think broadly people agree, that it will do a 
lot to reduce port congestion. But beyond this bill, are there 
other actions that you would suggest that Congress be attuned 
to, or actions that Congress should be taking to contend with 
these supply chain bottlenecks? And, Ms. Sorenson, I would love 
to have your opinion on this question as well.
    Mr. Vander Woude. Yes. So there are some things that the 
Administration is considering, such as extending the--truck 
drivers----
    Ms. Spanberger. Sir, you paused for a moment. You--heard 
extending.
    Mr. Vander Woude. That is all you got? Okay. Sorry, I am on 
hotel WiFi, extending the hours of operation for truck drivers 
extending the age limit for truck drivers down to 18----
    Ms. Spanberger. Okay.
    Mr. Vander Woude.--if possible, extending weight limits----
    Ms. Spanberger. From our infrastructure bill package----
    Mr. Vander Woude. Okay. Yes.
    Ms. Spanberger.--and that pilot program. Yes.
    Mr. Vander Woude. Yes. Weight limits, and just a lot of--
and then, here in California, we also have environmental 
restrictions at our ports that maybe could just be loosened for 
a little while, as we have lost access to a lot of equipment 
due to cancellations and that sort of stuff. We have had 60 
percent cancellations in the last month. We are the largest 
exporter of milk powders in the world, and 60 percent of our 
loads got canceled last month, which strands equipment. So we 
have run out of people and equipment to export the products 
that we need to export.
    Ms. Spanberger. Wow. Okay. Thank you. Ms. Sorenson?
    Ms. Sorenson. Yes, thank you for the question. The supply 
chain disruptions, in particular the ports, are of grave 
concern to us. We do not want to be potentially viewed as 
unreliable trading partners. Trading relationships take a long 
time to form, and we want to deliver a product that has been 
ordered. So when we are shipping chilled pork, we do not want 
to have to freeze it down because of a backlog at the ports. I 
think it goes well beyond the port issues as well.
    We are also seeing labor challenges throughout our farms, 
our packing industry, and transportation, and we continue to 
ask Members of Congress for an H-2A program that allows for 
year-round uncapped labor. So the challenges definitely extend 
beyond the ports, through the entire food supply chain.
    Ms. Spanberger. Thank you so much, and Mr. Chairman, thank 
you for letting me go over a little bit. Thank you to our 
witnesses. And certainly, Ms. Sorenson, I hear you loud and 
clear on the H-2A visa portion. I think many of us on this 
Committee were strong supporters of the Farm Workforce 
Modernization Act (H.R. 1603), and will continue to advocate 
for that bill's passage into the future, so thank you so much. 
Mr. Chairman, I yield back.
    The Chairman. Thank you, Congresswoman Spanberger. The next 
Member will be Congressman Rouzer, the next Democratic Member 
will be Congressman Harder.
    Mr. Rouzer. Well, thank you much. I have a million things 
on my mind that I could ask about and limited time, but let me 
bring up the subject that we have not talked a great deal about 
this morning, but I think is very important, trade promotion 
authority. Are all of our witnesses in favor of trade promotion 
authority?
    Mr. Scott. Absolutely.
    Mr. Rouzer. Anyone opposed? Let me ask you that way. So, 
that being the case, what priorities do you think should be 
voiced in the discussions between Congress and the 
Administration, assuming that those conversations are commenced 
at some point? Is there anything about the last trade promotion 
authority that needs to be modified or changed?
    Mr. Scott. In my opinion, trade promotion authority is a 
critical thing that the President has in his back pocket, 
basically, and can further these free trade agreements. The 
Soybean Association has fought for TPA for many years, and for 
every Administration we do the same, so it is just something 
that is good for free trade.
    Mr. Rouzer. Any other witness have a comment?
    Mr. Vander Woude. Yes. I think we would like to encourage 
that there is maybe a little more interaction between Congress 
and the Administration, that way nothing gets missed in the 
process.
    Mr. Stenderup. And also--possibly add that the positions 
that are still not filled, to get them filled, and certified, 
ratified, whatever you have, so we can get going on some of 
these things, particularly the supply chain challenges right 
now, and tariffs. Thank you.
    Mr. Rouzer. Anyone else?
    Ms. Sorenson. I would just say--I would agree with my 
fellow soybean, milk, and almond farmers on their statements. 
Thank you.
    Mr. Rouzer. Thank you. Kevin, I am curious, what is the 
relative number of soybeans that go to China, as compared to 
other markets, such as Mexico and Europe?
    Mr. Scott. So, 60 percent of the world's soybeans go to 
China, and from the U.S. it is 30 percent of our--one in three 
rows of our soybeans goes there, so it depends on how much they 
are getting, but Brazil is also the competitor, and they would 
supply that much also, or more. And so one in three rows is 
what we kind of consider.
    Mr. Rouzer. I am curious, what is the potential of the 
African market for soybean exports? How much growth opportunity 
is there?
    Mr. Scott. Well, we are working in Africa. WISHH, which is 
World Initiative for Soy and Human Health, is a group that 
works with ASA, and they are in Ghana currently, and there had 
been a 5 year project there developing their soy aquaculture, 
and poultry mission there. And we are--basically, WISHH starts 
the program. They get the country ready for actually knowing 
what a soybean is, how to use it, and how to improve their 
protein production, and ag production. Those kinds of things 
are all fantastic for human health, and that is where we start, 
and then we have another marketing organization that takes over 
when it is a commercially viable business.
    Mr. Rouzer. Ms. Sorenson, what has been your level--excuse 
me. What has been your level of involvement in USDA discussions 
as to how the Department plans to use the CCC funding set aside 
for African Swine Fever prevention and preparedness, and are 
you confident the funds will be put to the highest priority 
use? Bring us up to date on anything you may know there.
    Ms. Sorenson. Yes. Thank you for the question. USDA has 
indeed shared their preliminary plans on how they plan to 
utilize the funds. We understand their top priority is to 
minimize the risk of African Swine Fever from moving into the 
mainland, which definitely aligns with the top priority of the 
industry, grave concern of African Swine Fever landing on our 
shores. We support utilizing those funds to enhance the 
capability of our National Animal Health Laboratory Network, 
increase the inventory of equipment for large animal 
depopulation and disposal in the National Veterinary Stockpile. 
This is a critical need for the industry. And we are confident 
that USDA priorities align with our priorities.
    Mr. Rouzer. That is good to hear. Mr. Scott, real quick one 
back. When China cut everything off for soybeans, were there 
any other markets that you really made some headway with, or 
began to get a foothold in? And then my time has expired.
    Mr. Scott. Well, sure. Thank you for the question. When 
China shut down our imports, it, of course, crashed our market, 
and so people become very interested in a cheap source of 
protein. And at that time, our prices were not very good, it 
wasn't great for U.S. soy farmers, but Egypt developed a 
fantastic soy aquaculture, so feeding fish. They would feed 
fish, and they were a big improvement in market. But also all 
the Asian countries, Taiwan, also Vietnam, just many others, 
took advantage, actually, of the supply of soybeans, and it 
developed a great market, and we have tried to foster those 
markets, and continue in them.
    Mr. Rouzer. Thank you, I yield back.
    The Chairman. Mr. Harder, your 5 minutes.
    Mr. Harder. Terrific. Thank you so much, Mr. Johnson, and 
thank you, Chairman Costa, for holding this hearing. It is 
great to see all our witnesses here today on such an important 
issue. As Chairman Costa knows well, the Central Valley that we 
both represent, our ag relies heavily on trade and exports to 
thrive. I mean, we are the fruit and nut basket not just of 
California, and not just of the whole nation, but of the world, 
and so we need to make sure that we are getting our products to 
market in order to make sure that we can continue to succeed.
    I really appreciated the testimony from Mr. Vander Woude, 
that he shared. These supply chain challenges that we are 
facing right now just in the dairy industry are costing $1 
billion in additional expenses just in the first 7 months of 
this year. The neighbors that we have in the Valley simply 
can't afford that. So huge excitement to have this hearing 
talking about some of the situations at our ports, and I know 
we are working hard to make sure that we resolve those.
    I would love just to hear a little bit more from Mr. Vander 
Woude. It is wonderful having California dairies represented, 
and it is great to see you, sir. I appreciated the tour of your 
dairy a few weeks or months ago, and walked away very impressed 
by your operation. I am very grateful for your hospitality, and 
thank you so much for your testimony today. I would love to 
hear a little bit more about some of the markets that you think 
Congress and this Administration could be focused on that were 
not focused on today. I know you mentioned a little bit in that 
testimony. What are the top priority markets for you and the 
dairy industry at this moment?
    Mr. Vander Woude. Yes. So I think once we pulled out of TPP 
last, recently we did make a deal with Japan last year, and we, 
as California, felt we got short suited in that one. We are 
large producers of butter and dried milk powder. When you have 
milk, you can either turn it into cheese, or you can turn it 
into butter and milk powder, and we make butter and milk 
powder, and we were locked out of that Japan free trade 
agreement. We want to make sure that as those--if those one-on-
one agreements happen, all milk is included, and Japan was very 
strategic in blocking us. We didn't think that was a very fair 
way to go about it, so we need the full bucket of milk in any 
free trade agreement.
    Obviously Southeast Asia from western ports makes a lot of 
sense. China's kind of the 500 pound gorilla in the room. We 
all know they are hard to deal with, but we need to keep 
working with them to try to find some way to get our products 
in there, and try to get at least closer to the advantages that 
New Zealand--where most of our products go today, and there is 
a lot more access for us there, if we can get some better 
access.
    Mr. Harder. Just to dive deeper on Japan, I saw a few hours 
ago that the Administration announced a framework for those 
discussions. I guess it is still a little early to see how that 
will develop, but what are your concerns if we do not continue 
to develop our dairy trade with Japan? What do you think are 
the implications, and are there things that we could be doing 
to be helpful, especially in light of this new framework?
    Mr. Vander Woude. Implications are just--I mean, it is all 
market access. For everybody around the world, we are all 
fighting for the same markets. Japan is one that makes a lot of 
sense for us, so obviously we want more access to that market. 
They can afford our products, they want our products, we would 
like to sell them our products. We are really good at making 
these things sustainably and efficiently. We need to get access 
to those--we have done everything we can at home. We need some 
help from our legislators, and trade ambassadors, and that sort 
of stuff. We have worked with--and we have been actively 
engaged in trade negotiations throughout the years, so we would 
like to continue to be there.
    Mr. Harder. Terrific. Well, thank you. Mr. Stenderup, same 
question to you. For our almond industry, what do you think are 
some of the biggest barriers that our almond industry is facing 
when it comes to market access, and how do you think 
Congressional programs, like the Market Access Program, or 
others, can help or achieve some of the trade objectives that 
you have?
    Mr. Stenderup. Well, you have heard that--by the way, 
Member Harder, you see I am wearing a red and blue tie today. 
You and I had that discussion a few----
    Mr. Harder. I love it. Absolutely.
    Mr. Stenderup. And that is very important today. I tried to 
interject a little earlier, almonds are faced with a 55 percent 
tariff into China. That is overwhelming. Our number one 
competitor, Australia, as a zero percent tariff. They have 
somewhat of a free trade agreement, and we are facing that, and 
China's a burgeoning market. As far as market access, their 
middle class is coming up, and what a great area for us to 
continue towards with our friends at USTR, and Congress 
themselves, working towards reducing something as ridiculous as 
a 55 percent tariff. Thank you.
    Mr. Harder. Thank you. I see I am out of time, but thank 
you so much for your comments, and I yield back to the Chair.
    The Chairman. We thank Representative Harder for his good 
line of questioning, and the good job that he does representing 
the folks in the San Joaquin Valley. Kent, I am glad you noted 
the 55 percent surcharge with regards to almonds, or as we say 
amonds, because, given the current prices for almonds, that 
would make a big difference. I believe our next Member to be 
recognized is Representative Barry Moore from Alabama. Mr. 
Moore, are you there?
    Mr. Moore. Yes, Mr. Chairman, thank you, and Ranking Member 
Johnson, thank you for having this hearing today. Following up 
on Ms. Spanberger's question, there have been serious concerns 
with supply chain stability across multiple industries since 
the COVID-19 pandemic began. For any witnesses, what is the 
Administration doing that is working, and maybe even not 
working? If the Administration was represented here today, what 
would you suggest?
    Mr. Stenderup. I am sorry, who was the question directed 
at?
    Mr. Moore. Any of the--anyone.
    Mr. Stenderup. Okay.
    Mr. Moore. Any of the panelists. I just kind of wanted to 
open it----
    Mr. Stenderup. I would like to make one succinct comment. 
We don't want the foreign markets accustomed to functioning 
without U.S. products, whether it is just for a couple months 
or a part of a year. Now we are talking 2023 before things may 
return to normal? My goodness. They can forget about us 
quickly, and these--that--it is just that simple.
    Mr. Moore. So, Kent, what do you think--how do we get--how 
do we make our presence felt? In other words--I understand what 
you are saying. Once they get used to using another supplier, 
and they get the logistics worked out, it is tough to go back 
and use--and kind of re-establish those logistic chains. What 
do you suggest we do in the immediate to help you?
    Mr. Stenderup. We are faced with these demurrage charges 
and such, and these ships are going back empty. They are 
deadheading back because it is quicker and more profitable for 
them. Well, aren't we the United States of America? Let us pull 
the hammer on these people and fill those things. If we have 
available commodities, let us fill them up.
    Mr. Moore. Makes sense. Anybody else want to address what 
they would mention to the Administration if they were present 
today, kind of how we could--what we could do in Congress--the 
Administration to help?
    Mr. Vander Woude. Yes, I would follow up on Kent's 
comments, we can't wait. These are immediate needs. We need 
Congress to act, we need the Federal Maritime Commission to 
act. We need this Ocean Shipping Reform Act. We need to get 
creative. We need to think outside the box, and do things we 
haven't done before, whether that is mandating something with 
these international carriers. We all understand these are 
international carriers coming into our ports. We only have so 
much control over them, but let us exert any control we can to 
get our products on those ships, heading back to the Middle 
East, and heading back to those other countries.
    Mr. Moore. Thank you, son. Anybody else want to comment on 
that?
    Mr. Scott. Well we certainly--excuse me.
    Mr. Moore. Go ahead.
    Mr. Scott. Yes, currently, we ship about five percent of 
the soybeans we produce in the U.S. and export go in 
containers, and those containers fit the smaller markets that 
don't have the deep ports, so the large ships can't make it in 
with their bulk commodities, so it fits quite well that those 
containers can go to these smaller ports. And we have plenty of 
soybeans to fill those containers, so if we can get it figured 
out, that would be a fantastic--just go to along with the rest 
of your comments, that would be a fantastic way to fill those 
ships.
    Mr. Moore. Thank you. And with that, Mr. Chairman, I will 
yield back the balance of my time.
    The Chairman. The gentleman yields back, and we thank him 
for his line of questioning, and the Chair will now recognize 
the gentleman from Illinois, Representative Bobby Rush.
    Mr. Rush. I want to thank you, Mr. Chairman. My question is 
directed to Mr. Stenderup. Mr. Stenderup, I was delighted to 
learn that Blue Diamond Growers is a co-op, with over 6,000 
members in California. In your testimony you also mentioned 
that 90 percent of California's almond farms are multi-
generational family farms, and I had an opportunity to discuss, 
in yesterday's hearing on the renewable economy--I, for one, 
believe that co-ops are critical for putting resources directly 
into the hands of overlooked populations, and are a critical 
way of stopping, and even reversing, the rapid decline in Black 
farmers. How many of the Blue Diamond growers are minorities? 
Can you discuss how Blue Diamond Growers have been able to help 
Black and Brown farmers?
    Mr. Stenderup. Thank you, Congressman Rush. I believe, as 
far as the minority aspect, and--majority of our membership are 
Caucasian. We do have numerous Indian Sikh farmers and Latinos. 
Not too many in the Black sector, but we are an open co-op for 
all membership, and that just happens to be the type of 
person--the family farms that grow for there. I appreciate you 
asking the question. Anything else?
    Mr. Rush. Yes. Will you please discuss the best practices 
Blue Diamond Growers use to help their members succeed, and 
specifically their multi-generational family farmers? I am also 
interested in whether or not using co-ops more in urban areas 
can [inaudible]--your best practices be applied to urban 
cooperatives.
    Mr. Stenderup. Well, the difference between an urban 
cooperative and a rural? Is that your question? We don't 
discriminate, as far as that goes.
    Mr. Rush. Specifically, you have a model, [inaudible]--and 
I am going to think outside the box in terms of your model. The 
co-op model, I believe, has some benefits to urban ag and rural 
ag, and I want to know do you agree? And urban farming is in 
its nascent stage--and should we be more interested in using 
the co-op model?
    Mr. Stenderup. I am a strong advocate of urban farming and 
urban co-op models, yes, whether it is neighborhood or to a 
larger extent. I am a strong advocate of that. We spend--we 
give our share of money, as far as urban ag education, on an 
annual basis too, bringing the farm to the urban areas. And, 
yes, a true advocate for that. And the co-op business model 
works well for families, and--whether it be urban or rural.
    Mr. Rush. Thank you. I want to switch my line of 
questioning, I have introduced H.R. 3625, the United States-
Cuba Relations Normalization Act. Ms. Sorenson, do you believe 
that U.S. pork producers would benefit from increases in trade 
with Cuba? My state is a state that had a robust trade 
relationship with Cuba. Cuba contributed much to our trade 
negotiations--trade affairs, and I am interested in what is 
your opinion on normalizing the trade relationship with Cuba?
    Ms. Sorenson. As an industry that exports to over 100 
countries, and exporting nearly 25 percent of our production, 
broadening our export portfolio through FTAs and more market 
access into countries is a top priority for us, and we want 
access to as many markets as we can get. Without having read 
the language of your bill and your proposal, I would like to 
refrain from comment, but if it grows our export market in 
countries like Cuba, and in countries where the consumers love 
pork, and so many do outside of our shores, then we would be in 
support of that.
    Mr. Rush. Well, I have heard from a number of Illinois 
farmers, and they said that they are being hurt because of the 
restriction from trade with Cuba, that they are actually 
hurting, and their farmers are hurting, and their bottom line 
is suffering because of the restriction on trade with Cuba.
    The Chairman. We thank the gentleman from Chicago for your 
comments. And I can't speak outside of California, but I know 
in various efforts in the past there has been an interest by 
California producers trying to participate in the Cuban market, 
and clearly it is a question that is well raised, and we thank 
you for, always, your participation. The next Member that the 
Chair will recognize is Mr. Randy Feenstra, the gentleman from 
Iowa.
    Mr. Feenstra. Thank you, Chairman Costa, and Ranking Member 
Johnson. Trade is obviously a very key driver in Iowa's 
economy. As one of the top agricultural producing states in the 
U.S., it is important that Iowa's productive farmers have 
access to export markets. According to the data from the USDA, 
Iowa agriculture exports totaled more than $11 billion in 2020. 
My constituents understand that trade is a lifeblood for U.S. 
farmers.
    Ms. Sorenson, it is great to have you, as a fellow Iowan, 
before our Committee today. As you well know, my district 
represents one of the most productive hog productions in all of 
the nation. Your testimony speaks to the point that trade 
access is important not only for our producers in Iowa, but 
across our country. The top export markets in U.S. agriculture, 
Canada, Mexico, China, the European Union, Japan, account for 
about 60 percent of the total value of our trade exports. 
Agreements negotiated by the Trump Administration, such as the 
U.S.-Japan Trade Agreement and the U.S.-China Phase One 
Agreement sought to update the trade policies in these export 
markets. Ms. Sorenson, can you share how these agreements have 
benefitted the U.S. pork market, and then also, are there any 
outstanding issues that we would like to bring forward to see 
from the Biden Administration?
    Ms. Sorenson. Yes. Thank you for the question. The 
ratification of USMCA, the agreement with Japan, the Phase One 
deal with China, despite still having a 25 percent retaliatory 
tariff, have all been really helpful, getting the U.S. pork 
industry back on its feet after 3 years of trade retaliatory 
tariffs, and a COVID pandemic that disrupted the global food 
supply chain.
    Circling back to our top priorities, we want in to CPTPP. 
There is huge opportunity for us to be a part of that, given 
the 500 million consumers that are part of those countries, and 
the number of countries that want to be a part of that trade 
agreement. We want a level playing field, and we also think it 
is important to be a part of setting agricultural base 
standards across the world. Growing market access through--and 
free trade agreements in a large portfolio of countries is what 
Iowa and U.S. pork producers need to survive and grow our rural 
and U.S. economy.
    Mr. Feenstra. Right. Thanks for those comments. When I met 
with a representative from Taiwan, I heard that China is 
spreading disinformation about the U.S. pork products, such as 
ractopamine in the pork. Ms. Sorenson, can you share how these 
non-tariff barriers prohibit market access, and any updates on 
the U.S. efforts to explain the safety of ractopamine's use?
    Ms. Sorenson. Yes. I mean, I ractopamine is a FDA approved 
feed additive that producers have been using for decades. It is 
a technology, production management tool, and innovation, like 
many, that U.S. pork producers utilize on their farms. I think 
this circles back to the key point about that we need to be at 
the table as part of these agreements--to be engaged in the 
conversation, be able to set agriculture science-based 
standards for exports and trade agreements across the world. 
Things like banning an approved feed ingredient are not good 
for the competitiveness of U.S. farmers, in particular pork 
producers.
    Mr. Feenstra. Thank you. And one more question. I am so 
passionate about the fear of African Swine Fever in the U.S., 
and especially in the hog market, because I think this would 
decimate our export market. Do you see--is there anything that 
we can do? Because this would be catastrophic economically to 
our nation, and to, obviously, the State of Iowa. Is there 
anything that you see from the export side, or anything that we 
should do from policy side to address or be stronger when it 
comes to African Swine Fever?
    Ms. Sorenson. Absolutely. A third of our hogs are tied to 
exports, and if we had ASF in the U.S., our exports would stop 
on day one. It would be absolutely devastating. We have to have 
Congress, working with the Administration, to support and fully 
fund the NAHLNs Lab. Our APHIS veterinary staff needs strength, 
needs funding. Our CBP agents, and our K9 teams, protecting our 
borders, and things like investing dollars for more signage at 
passenger terminals. Anything we can do to support our ports 
and our borders.
    Mr. Feenstra. Thank you, thank you, and I yield back.
    The Chairman. One moment. Let us go now to Mr. Bacon from 
Nebraska.
    Mr. Bacon. Thank you, Mr. Chairman, and thanks to the 
Ranking Member. I appreciate the spirit of which both of you 
lead this Subcommittee. But, I would like to highlight, and it 
may have been highlighted--by the way, I had an ambassador 
visit, so I had to turn off for a bit. I had to speak on the 
floor, so I hope I am not duplicating comments here, but I may. 
But I did want to point out that, when it comes to the 
oversight within the Agriculture Committee, I don't know that 
we have done any oversight with anybody from the Agriculture 
Department. I would like to encourage the Majority to do so. 
And almost all of the committees have not done that in 
Congress, with the exception of the HASC, the Armed Services 
Committee, and the Intelligence Committee, and so I just 
respectfully request that our Committee do that. There is--I 
mean, there are things that we need to get the Agriculture 
Department--the leadership here and ask them about.
    Second, I would like to point out too that, up until last 
month, the President has not mentioned trade at all. He has 
been silent on this. In the last month he has started to, but I 
think it should be a higher priority for this Administration. 
Nebraska is an export state, and we need President Biden to 
open up doors for our protein and grain products there, so I 
wanted to point that out as well.
    So my first question is really to Ms. Sorenson and Mr. 
Scott. How are we doing with the Phase One deal with China? Is 
China meeting their agreement? We will start off with Ms. 
Sorenson.
    Ms. Sorenson. I was going to say, I guess I will take a run 
at that. The China Phase One, and having ASF sadly ravage the 
pork industry in China, has indeed created a very large demand 
for pork around the world, and an opportunity for the U.S. pork 
industry. The problem remains that we need a resolution to the 
trade retaliatory disputes with China, so we are still faced 
with a 25 percent retaliatory tariff, totaling 33 percent 
tariff. Eight percent for the most favored nations, an 
additional 25 percent placed on U.S. pork producers. We need to 
have a level playing field, and be able to take advantage of 
the opportunity that we have with China.
    As long as those tariffs remain in place, we are at a 
significant disadvantage to other nations supplying pork into 
the country. And, they are increasingly seeking pork imports, 
because at least \1/3\ of its production has been impacted by 
African Swine Fever.
    Mr. Bacon. Thank you. Mr. Scott, what about the soybean 
side of this?
    Mr. Scott. Yes, it--of course, Jen's comments are 
appropriate. Most of our soybean imports into China go to feed 
hogs, and when they had African Swine Fever, there was not a 
big need for them to import soy. So they put tariffs on, and it 
was basically an artificial tariff for us, because they were 
not going to import soybeans anyway, and--but when they did 
start to--it--when there was a demand for soybean and hog feed 
in China, they somehow allowed those tariffs to go away on the 
soybean side. And we in the American Soybean Association would 
prefer to feed our chickens, and our hogs, and animals here, 
and then ship the meat to China, and so removing tariffs on the 
pork side would be fantastic for soybeans, and so we are for 
those reduced tariffs also.
    Mr. Bacon. Thank you. And, Ms. Sorenson, you mentioned a 
little bit about African Swine Fever, and the impact on the 
pork industry if it broke out here. Are we doing enough in the 
research area? What more should we be doing to fund research 
when it comes to combating this?
    Ms. Sorenson. We will never turn down funding and a focus 
on agriculture research if it helps us strengthen our borders, 
and helps producers prevent and plan for an ASF outbreak, or 
any FAD outbreak in the United States. Again, it would be 
devastating to farmers in the entire rural economy if we were 
faced with a foreign animal disease, including our friends in 
corn and soybean that supplied us--supply us feedstuffs.
    Again, would be devastating, and prevention, planning, 
preparation, and research would tie into being able to help 
producers seek the best methods, including depopulation, and 
funding our veterinary stockpiles, and funding our 
veterinarians over at APHIS--is also critical.
    Mr. Bacon. Thank you. I would like to ask you about foot-
and-mouth disease vaccine, but I--it was my initiative, but I 
am going to be out of time, and I hope this--becomes 
operational this year and that we could see the positive 
results of this vaccine bank.
    Ms. Sorenson. Yes.
    Mr. Bacon. But with that, I yield back.
    The Chairman. The gentleman yields back, his time has 
expired, and the Chair will recognize the next Member on the 
Subcommittee, but I want to let those Members and staff members 
that are participating remotely--that we are about to conclude 
the hearing, so, for Members who have maybe missed their 
opportunity, this is going to be near your time. I want to 
recognize Representative Jim Hagedorn from Minnesota for your 5 
minutes.
    Mr. Hagedorn. Thank you, Mr. Chairman, Ranking Member, I 
appreciate it. I thank the witnesses for being here. Under 
President Trump, I thought some of the things we did right for 
agriculture--we would try to reset some of the basic principles 
to help our farmers. Lower taxes, get rid of some regulations 
that lowered cost of production, have energy independence, 
which kept the price of fuel, and electricity, fertilizer, 
everything down, and then trying to reset some of these trade 
deals that for a while maybe had gone too far, USMCA is a very 
good example. I think one of the trade deals that was very 
excellent. And, of course, China Phase One, and trying to do 
what we could there to reset that, when they were manipulating 
currency, and they were forcing technology transfers, stealing 
our intellectual property, and things like that.
    I think for the main point of that, it was going the right 
direction. COVID hit, and there was a little bit of an issue 
there, but we are on the right track. What concerns me about 
the Biden Administration, and I think my colleague just 
mentioned it. I mean, up until just recently, the word trade 
hasn't even been in their vocabulary. They are really not 
working on this at all, and I am not sure exactly when they are 
going to get to it. Our Republican Members on this Committee 
have asked the Trade Rep, Kathleen Tai, to come by and talk to 
us about it, give us an update. She says she is not available 
until sometime next year. Well, \1/4\ of the Administration 
will be over by the time she wants to come up and even talk a 
little bit about trade.
    So I will open this up to Mr. Scott and Ms. Sorenson. What 
do you think the Administration could be doing more right now 
to be a little bit more active in the trade area?
    Mr. Scott. Excellent question. Of course, talking about MAP 
and FMD would be great. I think those things are critical to 
our success in other countries, but trade--needing to get the 
people in place that can actively work for ag's interest. And 
we need those positions so that we have something to bounce off 
of, as far as our conversations with the Administration, so 
that they can go out and forward the needs of trade.
    I mean, critically, soybean industry focuses on trade. We 
have to, and that--we are pretty good doing it ourselves. We 
work in other countries, but there is also a definite need for 
the Administration's help in getting access to certain markets, 
and playing fair. And I know Jen has brought up the scientific 
data that is used, or the non-scientific data, basically to put 
up artificial barriers to us, and those things need to be 
addressed constantly, because there is considerably a lot of 
time spent in foreign countries coming up with ways to inhibit 
our exports from the U.S. So we definitely need an engaged 
Administration.
    Mr. Hagedorn. Before Ms. Sorenson answers--and a lot of 
that takes--it takes a lot of work. They have to get together, 
and negotiate, and we have to pound on them and make those 
agreements, and I am just not seeing the work. That is the sad 
thing. Ms. Sorenson, what is your perspective on trade, and 
what the Administration has been up to so far?
    Ms. Sorenson. I would start off by saying we are thankful 
for the Administration's engagement in Vietnam and the 
Philippines. We have had our eyes on these markets for years, 
and so increasing market access into those countries will be 
very beneficial for U.S. pork producers. Consumers in those 
countries love pork.
    I go back to the need to join CPTPP. That would be an 
immediate opportunity to look at for U.S. agriculture and U.S. 
pork. Again, 500 million consumers, part of those agreements, 
and we need a level playing field getting into those countries. 
Protection against African Swine Fever, and just always growing 
our portfolio through free trade agreements, and more market 
access to countries across the globe. I think we could do--we 
can produce pork sustainably here in the United States. We can 
produce a quality product, and a safe product, at a great cost, 
and we need to take advantage of that to grow our rural and 
U.S. economy.
    Mr. Hagedorn. I appreciate that. I mean, our farmers are 
the most productive and efficient in the world. I grew up on a 
family farm in southern Minnesota. Farming has changed a lot 
since then, you do terrific work, but we have to find these 
markets, and we have to have these agreements, in order to make 
sure that our independent and other farmers are going to remain 
in business, and our communities can remain vibrant. With that, 
Mr. Chairman, I will yield back. Thank you.
    The Chairman. The gentleman yields back, and I think from 
the testimony we have received this morning, there seems to be 
a consensus that we ought to take another look at rejoining the 
Trans-Pacific Partnership. And, for those of us who felt we 
shouldn't have left in the first place, I think we ought to do 
what we can on a bipartisan basis to urge that to happen under 
conditions that would be acceptable to us, obviously.
    And, I am just reminded that China--that the President had 
an extensive discussion yesterday with President Xi. For this 
Administration, like the previous Administration, like the 
Administration before us is always a challenge, because China 
is an adversary, China is a competitor, and China is also an 
immense market opportunity. Every Administration that has had 
to deal with China, that likes to be a part of the world trade 
effort, but not always follow the rules required, makes it 
perplexing for any Administration to do so, but we must, for 
all the reasons that I just described. I think the welcome news 
today, with this new initiative with Japan, will create more 
opportunities.
    With that said, our next Member is Representative Jahana 
Hayes from Connecticut, and then followed by Delegate Plaskett 
from the U.S. Virgin Islands, and, if the Chair does not hear 
any other Members that are in queue, we will bring the hearing 
to a close. So, Representative Hayes from Connecticut?
    Mrs. Hayes. Thank you, Mr. Chairman, for holding this 
hearing. I have been hearing from Connecticut producers about 
cost increases and operation impediments caused by global 
supply chain disruptions. For some, this has become so 
burdensome that they are contemplating closing their doors 
permanently. That outcome, if widespread, would be disastrous 
for my state, because we have many small family farmers. I am 
glad we have a chance to explore this further today.
    Generally, trade policy is extremely important to 
Connecticut agricultural producers. According to the latest 
available data from the United States Trade Representatives, 
Connecticut exported about $248 million in agricultural goods, 
mainly to Asia and Europe, in 2017. Given that my state has a 
substantial dairy industry, I am extremely concerned about this 
issue.
    So, Mr. Vander Woude, I was pleased to support the USMCA in 
last Congress, and was particularly glad to see that the deal 
opened Canada to U.S. dairy exports. Since its implementation 
last year, how has USMCA affected dairy trade with Canada, and 
is Canada adhering to the dairy access agreement in the USMCA?
    Mr. Vander Woude. Well, as I said before, I don't think--
they have changed their actions a little bit, but they have not 
fully acted on the agreements that were put forth in the USMCA, 
so we do ask that Ambassador Tai and the Administration call 
them to the table, and ask for the hearing on getting 
resolution to that problem.
    Mrs. Hayes. And I think this kind of ties together what Ms. 
Sorenson said, and the Chairman said. What export opportunities 
might U.S. producers be missing out on because the United 
States withdrew from the Trans-Pacific Partnership, and to what 
extent, if at all, would meat and dairy producers benefit if 
the U.S. were to join the CPTPP?
    Mr. Vander Woude. So, again, Japan obviously is a key 
market for us, but it needs to be a fully accessible market for 
dairy. As I said before, Vietnam used to be our largest 
customer, and we have been--we virtually haven't shipped--been 
able to ship anything to Vietnam because someone else got a 
free trade agreement there, and we had tariffs imposed on us, 
and that story just gets told over, and over, and over 
throughout the Middle East. We have done what we can to access 
those markets, but TPP would definitely be very, very big for 
the dairy industry.
    Mrs. Hayes. And last, Mr. Vander Woude, you mentioned that 
exports drive growth and create jobs in the dairy industry. Can 
an increase in exports help strengthen the fluid milk supply 
chain?
    Mr. Vander Woude. Absolutely. I mean a rising tide lifts 
all boats, in dairy, we have faced the same labor issues that 
any other industry out there has faced. We have had a really 
hard time finding enough labor over the last couple years, and 
I am sure I am not alone with--as I talked to farmers across 
the U.S., they had the same issue, yes. I think we have a 
fairly secure dairy market here in the U.S., and our domestic 
supply chain is in very good shape. There were small issues 
last year, but, for the most part, we have the product. It was 
just a matter of getting it into a package, or getting it to a 
store. That was the problem. So I think our supply chain here 
in America is very good, and any export opportunities will only 
enhance that.
    Mrs. Hayes. Thank you. And I will conclude my time the way 
I always do, just reminding everyone on this Committee, and all 
the stakeholders that, when we look at the challenges in the 
industry on a large corporate scale, just imagine how those 
challenges are amplified and exacerbated for small family 
farmers, or people who this is their only source of income, who 
don't have the revenue or the capital to continue through 
several bad years or bad seasons. So I just will continue to 
push on this Committee to make sure that any solutions to these 
problems that we develop does not leave any of those small 
farmers behind. With that, Mr. Chairman, I yield back.
    The Chairman. I thank our colleague, the Representative 
from Connecticut, for her well-spoken comments as it relates to 
America's challenge, in terms of maintaining our agricultural 
competitiveness for farmers of all sizes, and I think that is 
an important note. And the Chair will now recognize I think our 
final Member to be participating today, and that is Delegate 
Stacey Plaskett from the U.S. Virgin Islands. Delegate 
Plaskett?
    Mr. Plaskett. Thank you very much, Mr. Chairman, and thank 
you to the witnesses for being here today, and having this 
conversation with us. This is a very important issue to me. I 
think that trade--it is interesting, being a Member of the 
Agriculture Committee, but also being a Member of the Ways and 
Means Committee, trade policy and priority is something that I 
think quite often about, and so I wanted to ask some real 
questions with regard to that.
    Ms. Latashia Redhouse, I have a question for you. In my 
home district of the U.S. Virgin Islands, we are particularly 
cognizant of climate change, given our vulnerability to the 
devastating environmental impacts that it has. Do you have any 
recommendations on how to implement sustainable agricultural 
policies, while ensuring we provide support to our small 
business professionals?
    Ms. Redhouse. Yes, definitely. As you mentioned--and I 
appreciate the question. As you mentioned, the smaller farmers 
and producers--raising (inaudible] capital--has been one thing 
that we have been exploring, and really trying to advocate on 
behalf of our constituents, and we have been trying to really 
push the--share the whole aspect of regenerative agriculture, 
and then also inclusion of the traditional ecological knowledge 
to help support our land stewardship. That has actually played 
very well in our communication with the EU, Japan, the Middle 
East, in the way we are telling the story of the producers we 
represent.
    And so, I think if there is a way that we can continue to 
elevate and support the producers on the ground that are really 
pushing for more sustainable and regenerative farming 
production type of methods, I think that is really important, 
and a good conversation we can have.
    Mr. Plaskett. Ms. Redhouse, I think that that is really 
fascinating. In the Virgin Islands, our small farmers have been 
utilizing methods for resiliency, combating drought, combating 
hurricanes, et cetera, for some centuries now, and I am sure, 
being Tribal lands as well, farmers are doing that.
    I think it is important that we, as members of the larger 
agricultural community, Department of Agriculture, even 
Commerce gives them tools so that they can replicate this on a 
larger scale to farmers in other areas who may have similar 
issues, similar challenges, to utilize those skillsets as 
trading, exporting those skillsets to other farmers in other 
areas. I would be happy to work with you on that, and look to 
my staff reaching out to you to provide some support on that. 
Thank you very much.
    As Chair of the House Agriculture Biotechnology, 
Horticulture, and Research Subcommittee, I am interested in 
ensuring that U.S. agricultural producers have those tools and 
innovations needed to farm successfully and sustainably, 
however, I understand discriminatory trade practices from our 
trade partners can limit exports of U.S. grown goods, which in 
turn limit growers' ability to adopt those innovations. Excuse 
me. I wanted to know if one of our witnesses would like to talk 
about the underlying problems, potentially, with China's 
regulatory process, and any recommendations to U.S. 
policymakers on how to address that?
    Mr. Scott. I can attempt to----
    Mr. Plaskett. --answer that?
    Mr. Scott. Sure, I can attempt to answer that. So the 
American Soybean Association, we talk to the people who are 
developing those new technologies in the seed area, and we 
discourage them from bringing anything to the market that has 
not been okayed in our primary export markets. So the Chinese, 
the Europeans, the Mexicans, if they do not okay these new 
technologies that we use to further our sustainability on the 
farm, we encourage them not to put them on the market, because 
that would be a disruptive figure if they made it to market, 
and then got into the export channel.
    So it is critical that we get some regulatory sanity in 
other countries based on science around our new technology. And 
that would help us greatly on the farm become more sustainable, 
and that is--that is what I am after on my farm. I want to 
continue my generational move towards maybe my grandkids, and 
their kids, having the ability to farm. And those new 
technologies are important to us.
    Mr. Plaskett. Thank you very much, Mr. Chairman, for the 
opportunity, and I yield back.
    The Chairman. We thank the representative for her 
participation and her questions. And, Mr. Scott, having myself 
a third generation family farm from California, these non-trade 
tariff barriers that we find, in my view, raising itself 
through phytosanitary standards and others oftentimes are more 
of an excuse, or an attempt to leverage markets to limit the 
kind of fair, level playing field that we ought to be having 
with our trading partners is always seemingly an issue with 
different countries that we have to stay on top of, and focus, 
and try to make sure that we proceed with enforcement efforts 
when needed, so I appreciate your comment.
    Before I make my final comments, I will recognize my 
colleague and friend, the gentleman from South Dakota, for any 
closing statement that he wishes to make.
    Mr. Johnson. Mr. Chairman, this has been excellent, and I 
think we have seen tremendous common ground from the witnesses, 
as well as from Members on the Subcommittee on both sides of 
the aisle. Just to recap, I think we have heard about the 
tremendous importance of market access for all of these 
commodities we have been talking about. That is number one. 
Number two, we have heard that CPTPP would have a tremendous 
positive impact on American ag producers. Number three, we have 
heard that a more robust approach toward free trade agreements 
from this Administration would be helpful in advancing the 
cause of removing tariff barriers, as well as non-tariff 
barriers, which are so often--as you and Mr. Scott are talking 
about, are not science-based, and are flimsy pretenses toward 
protectionism.
    The Chairman. Right.
    Mr. Johnson. And then, finally, how important it will be to 
get Ambassador Tai here. Mr. Chairman, I know you are working 
on that, but if we are going to get a more robust push toward 
free trade agreements, this has to be something that will be 
done with Congress and the Administration working together, and 
I think Ambassador Tai's presence will be tremendously helpful. 
So thanks for your leadership in these areas, sir, and I yield 
back.
    The Chairman. I thank the gentleman for his comments, and I 
think you did a good job in summarizing it. We are working to 
have Ambassador Tai address the House Agriculture Committee, 
certainly--or Subcommittee, but probably--I know the Chairman 
and the Ranking Member would probably prefer she address the 
entire Agriculture Committee, and that is fine. But we need her 
engagement with us to determine how we can work together. We 
also need the Senate to confirm Elaine Trevino, who has been 
nominated almost 2 months ago, to make sure that the USDA has 
that person in place to represent American agriculture, in 
terms of these trade issues. I have worked with her for many 
years in the past, and know her to be a very strong advocate on 
behalf of agriculture.
    And, as I have said before, this Subcommittee on Livestock 
and Foreign Agriculture will continue to focus on all of the 
above. This is but one of a continuing series of hearings that 
we will have on the issues of trade and the supply chain crisis 
that we are facing today. I think we have to really work on a 
bipartisan basis to do all of the above, both the short-term 
remedies to the problems with our supply chain challenges, that 
is impacting American agriculture, as well as other American 
industries, and also the longer-term issues that we can deal 
with, such as the legislation that our colleague and friend 
Congressman Garamendi is carrying that many of us are principal 
cosponsors of. And then, finally, obviously, the infrastructure 
package that the President signed earlier this week, I think, 
in the long-term as well, is going to expand capacity for our 
ability to move goods and products to markets where we can 
certainly compete, if it is a level playing field.
    The situation, as I noted at the outset with Long Beach and 
Los Angeles, who would have thought that 40 percent of the 
container packages go through that one port? But they also--and 
I work with them--are having a higher utilization of traffic in 
the last 6 months than they had pre-pandemic, so you have to 
keep that in mind too, because there is a built-up demand. 
There has been a lot of savings by Americans over this pandemic 
period, and that pent-up demand is--we see resulting in part 
for a very--expansion of American consumers, which creates more 
demand, which also has other relation effects to the inflation 
that we are dealing with.
    So it is a challenge, a challenge on multiple fronts. This 
Subcommittee has a responsibility to play a part, and a 
constructive part, helping to deal with the challenges that we 
are facing, and we will continue that work. So I want to thank 
the witnesses. I think your testimony was on point, and focused 
the Committee Members in areas where we can be constructive now 
in the near-term, as well as in the longer-term, when we look 
at the reauthorization of the farm bill. There were good 
comments as it related to the Market Access Program, and some 
of the other areas, and then we will continue to work with all 
of you.
    And I want to thank the Members of the Committee, I want to 
thank the witnesses, and we have a lot of work to continue to 
do, but this brings this Subcommittee hearing to an 
adjournment, and I want to thank everybody. The Committee is 
now--oops, one moment. Under the Rules of the Committee, the 
record of today's hearing will remain open for 10 calendar 
days--I must say this, the magic words--to receive additional 
material and supplementary written responses from any witness 
to any question by a Member, as it is appropriate. So, without 
any objections, so moved. The Subcommittee is now adjourned.
    [Whereupon, at 12:13 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
   Submitted Letter by Sarah Gallo, Vice President, Agriculture and 
           Environment, Biotechnology Innovation Organization
November 17, 2021

 
 
 
Hon. Jim Costa,                      Hon. Dusty Johnson,
Chairman,                            Ranking Minority Member,
Subcommittee on Livestock and        Subcommittee on Livestock and
 Foreign Agriculture,                 Foreign Agriculture,
House Committee on Agriculture,      House Committee on Agriculture,
Washington, D.C.;                    Washington, D.C.
 

    Dear Chairman Costa, Ranking Member Johnson, and Members of the 
Subcommittee:

    The Biotechnology Innovation Organization (BIO) is pleased to 
submit a statement for the record to the United States House of 
Representatives Committee on Agriculture Subcommittee on Livestock and 
Foreign Agriculture hearing entitled, Trade Policy and Priorities.
Introduction
    BIO \1\ represents over 1,000 members in a biotech ecosystem with a 
central mission--to advance public policy that supports a wide range of 
companies and academic research centers that are working to apply 
biology and technology in the agriculture, energy, health, and 
manufacturing sectors to improve the lives of people and the health of 
the planet. BIO is committed to speaking up for the millions of 
families around the globe who depend upon our success. We will drive a 
revolution that aims to cure patients, protect our climate, and nourish 
humanity.
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    \1\ https://www.bio.org/.
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Trade Policy and Priorities
    BIO applauds the Subcommittee for examining trade policy and 
priorities to support agricultural producers, promote innovation, 
protect the environment and enable agriculture to combat climate 
change.
    Because of bipartisan support, for over twenty years, the United 
States has successfully and safely led the world in the 
commercialization of biotechnology to enable more sustainable farming 
and industrial practices. These innovations reduce greenhouse gas 
emissions throughout agricultural supply chains, delivering 
environmentally friendly products and processes to the market and more 
nutritious offerings to all tables.\2\
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    \2\ https://www.bio.org/letters-testimony-comments/bio-submits-
comments-usda-highlighting-biotechs-role-tackling-climate.
    Editor's note: references annotated with  are retained in 
Committee file.
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    Unfortunately, when major trading partners such as China, the 
European Union (EU), or Mexico, delay biotechnology risk assessments 
and approvals or intentionally malign technology, the global 
marketplace is reluctant to accept new technology due to potential 
impacts on global trade. The results are unfortunate, as producers in 
the United States and around the world are denied innovative tools to 
reduce emissions, sustainably increase production, and deploy climate-
resilient technologies.
China
    For more than a decade biotechnology regulatory policy in China has 
effectively limited U.S. farmer access to new biotechnology traits, and 
by extension worked counter to the interests of American farmers and 
American businesses. In response to these practices, the U.S. 
Government (USG) has repeatedly intervened with the Chinese Government. 
As a result, China has made multiple commitments to implement a 
transparent, predictable, and science-based biotechnology risk 
assessment system, both informally during multiple bilateral meetings 
and formally through the Phase One Economic and Trade Agreement (Phase 
One Trade Agreement) signed by both countries in January 2020. To date, 
however, there is no evidence that China has followed through on these 
commitments, as the system continues to be opaque and protracted, 
averaging over 8 years to secure an import approval for a biotech 
trait.
    Chief among China's Phase One provisions is a commitment from China 
to complete regulatory review of biotechnology products within 2 years, 
on average, and to limit the scope of the regulatory review to the 
product's intended use, i.e., feed or further processing. Of particular 
concern is the fact that nearly 2 years following the signing of the 
Phase One Agreement, Chinese authorities have yet to articulate how 
they intend to implement commitments made to the USG. While there is 
anecdotal evidence to suggest that process changes may have been 
enacted, there has been no official communication to seed technology 
companies or the USG regarding China's path to compliance.
European Union
    For the first time in decades, there appear to be opportunities 
emerging within Europe to enable innovation. Both the Farm to Fork 
strategy and the European Commission's recent study on New Genomic 
Techniques \3\ point to the importance of innovation to achieving a 
more sustainable food system. However, significant risks remain as 
Europe's regulatory processes are fundamentally prejudiced to 
agricultural biotechnology. Nevertheless, we believe it is critical for 
the United States Government to proactively engage with like-minded 
countries and chart a path forward with the EU to enable science-based 
regulations for biotechnology tools and expand sustainable agricultural 
practices to achieve our shared climate goals. We applaud Secretary 
Vilsack's efforts to work with like-minded countries around the UN Food 
Systems Summit to launch the Coalition for Sustainable Productivity 
Growth.\4\ However, it is critical to also engage the European 
Commission to ensure that concrete measures are taken to enable a 
timely, predictable, and science-based approval process to enable 
innovation to fully address climate and food system challenges.
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    \3\ https://ec.europa.eu/commission/presscorner/detail/en/
ip_21_1985.
    \4\ https://www.usda.gov/oce/sustainability/spg-coalition.
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Mexico
    More recent, but particularly worrisome, is Mexico's rapid 
dismantling of regulatory institutions and international commitments 
with respect to agricultural biotechnology. Despite recently confirming 
its commitment to North American trade through the U.S.-Mexico-Canada 
Agreement (USMCA), Mexico has become a major barrier to introducing new 
agricultural biotechnology products within North America.
    At issue is the fact that COFEPRIS, Mexico's food and drug 
regulator, has been not maintained a science-based process for over 3 
years. During this time, the queue of biotech products has grown to 25, 
with nearly all products far exceeding Mexico's 6 month statutory time 
limit. The Government of Mexico has offered no explanation for the 
delays nor provided any guidance to developers. We question Mexico's 
commitments to the USMCA and are highly concerned about the Government 
of Mexico's rejection of technology that has been proven to enhance the 
sustainability of agriculture.
    Compounding matters, the Government of Mexico continues to make a 
series of troubling statements regarding imports of corn produced with 
biotechnology--explicitly stating that imports will be prohibited by 
2024 and future approvals will be denied, and existing approvals will 
be revoked. The most recent example being a recent letter from Mexican 
President Andres Manuel Lopez Obrador to President Joe Biden \5\ that 
tied Mexico's actions on biotechnology to climate change commitments.
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    \5\ https://www.gob.mx/presidencia/documentos/carta-al-presidente-
de-estados-unidos-joseph-biden?idiom=es.
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    We appreciate U.S. Trade Representative Ambassador Katherine Tai 
and U.S. Department of Agriculture Secretary Tom Vilsack have actively 
engaged with the Mexican Government on these issues, however, we are 
increasingly alarmed as the Government of Mexico has yet to acknowledge 
U.S. Government intervention and articulate a path to compliance.
    These actions are highly concerning and must be addressed at the 
highest levels of government.
Conclusion
    A proactive trade agenda is needed to harness the latest science, 
enable U.S. producers to be competitive in a global market, sustainably 
increase production, and combat climate change. U.S. trade policy must 
be aimed at addressing existing barriers to biotechnology and 
facilitating regulatory approvals for critical technologies.
    BIO is committed to working with the Subcommittee to address these 
barriers to foster the rapid development and deployment of agricultural 
biotechnology to help American agriculture meet the challenges of the 
21st Century. We look forward to our continued partnership in this 
critical endeavor.
            Sincerely,
            [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
            
Sarah Gallo,
Vice President, Agriculture and Environment,
Biotechnology Innovation Organization.

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