U.S. Trade Policy by Congressional Earmarks


China recently filed a complaint at the WTO against the U.S. because of legislative language considered to be discriminatory toward Chinese poultry imports. This was in response to the Omnibus Appropriations Act of 2009 that specifically prohibits USDA from spending money for rulemaking to allow cooked chicken imports from China. This is not a new issue, but does compromise U.S. efforts to argue that trade restrictions should be science based.

In 2004 when avian flu was an issue in the U.S., China and other countries the U.S. suspended trade with China and China with the U.S. In 2006 the Food Safety and Inspection Service (FSIS) of USDA began the regulatory process of clearing Chinese cooked poultry for import to the U.S. Congress blocked funding for that effort in the fiscal year 2008 appropriations bill for USDA (the year beginning October 1, 2007) and extended that prohibition in early March in the omnibus spending bill that funded USDA and other agencies through September 30 of this year. The bill states, “none of the funds made available in this Act may be used to establish or implement a rule allowing poultry products to be imported into the United States from the People’s Republic of China.”

Representative Rosa DeLauro (D-CT) has led the effort to stop imports of Chinese chicken meat. As Chairwomen of the agriculture subcommittee of the U.S. House of Representatives Appropriations Committee, she has substantial influence on legislative language that comes out of the subcommittee. She argues that poultry products from China are a potential health risk because of poor sanitary conditions at processing plants. Under the WTO Agreement on Sanitary and Phytosanitary Measures decisions about food safety are to be based on science and made by veterinarians and scientists with the country’s food safety regulators. The European Union, Japan and Switzerland accept cooked Chinese poultry meat as meeting international standards.

The U.S. poultry industry is in general agreement with the assessment made by FSIS. Since 17 percent of U.S. young chicken meat production and 10 percent of turkey meat production are exported, they have a major stake in seeing that food safety regulations are a two-way street. China is the second largest importer of U.S. poultry meat at $442 million in calendar year 2008, including a market for chicken feet that are unwanted in the U.S. and most of the rest of the world. Jim Summers, President of USA Poultry and Egg Export Council, is quoted in the April 2009 edition of Watt Poultry USA, “Frankly, we are not opposed to China seeking relief from the WTO, and we wish them success. We feel that China is not being treated fairly on this.” Total U.S. agricultural exports to China were $12.2 billion in calendar year 2008 and exporters of other products to China are concerned that the Chinese government will respond by raising food safety issues with those products.

China had been voicing concern about this issue for months before it officially complained at a WTO Agriculture Committee meeting on March 12. After bilateral discussions did not resolve the issue, China took the next steps on April 17 by filing the WTO case and asking for formal consultations on the issue. If no progress is made within 60 days, China can request the establishment of a WTO trade dispute resolution panel to review the facts in the case and make a decision.

This is the second trade dispute to arise from the omnibus appropriations bill. A pilot program under NAFTA to allow Mexican trucks to operate in the U.S. beyond a border commercial area was also denied funding. As a result, Mexico has imposed tariffs on $2.4 billion worth of 36 agricultural and 53 industrial products imported from 40 states. Most tariffs are 10-20 percent, but fresh grapes have a 45 percent tariff. The tariffs are designed to equal the trade lost by banning Mexican trucks.

In early February Congress also approved a “buy American” provision in its $787 billion economic stimulus plan that applies to, “…all of the iron and steel and the relevant manufactured goods used in the project.” A few exceptions were provided and language was included for it to be “applied in a manner consistent with United States obligations under international agreements.”

There is a basic conflict between a rules-based system under the WTO, NAFTA or a bilateral trade agreement and the power of individual members of the House and Senate to influence legislation that impacts producers and consumers around the world. Trade agreements resulting from complex tradeoffs can be overturned by votes on appropriations bills that few Senators and Representatives will risk voting against because they include spending for other important programs.

It is this tendency for politicians to take a narrow view on trade policy that led to agreements for five decades between Presidents and Congresses for “fast track” or “Trade Promotion Authority” to offer trade agreements for an up or down vote in the House and Senate with no amendments. No country will negotiate complex trade agreements with the U.S. or other countries if an agreement can be undone one provision at a time. Recent actions by Congress are simply a new version of past special interest trade policy votes. These actions are particularly damaging during tough economic times when the tendency to protect industries is heightened and political leaders in other countries want to pursue protectionist trade policies.

USTR and U.S. embassy staff are also put in the difficult position of defending actions that cannot be defended based on rules agreed to the U.S. government. U.S. producers and consumers are the big losers as trade agreements are further compromised and economic opportunities are lost.

Based on recent history it is illogical to expect members of the House and Senate with concentrated power to not use it to pursue personal or special interest group agendas. The only solution is for President Obama, House Speaker Pelosi, Senate Majority Leader Reid, Senate Minority Leader McConnell and House Minority Leader Boehner to stop trade policy earmarks that they would give bold speeches about if politicians in other countries did the same to U.S. products.

Ross Korves

Ross Korves

Ross Korves served Truth about Trade & Technology, before it became Global Farmer Network, from 2004 – 2015 as the Economic and Trade Policy Analyst.

Researching and analyzing economic issues important to agricultural producers, Ross provided an intimate understanding regarding the interface of economic policy analysis and the political process.

Mr. Korves served the American Farm Bureau Federation as an Economist from 1980-2004. He served as Chief Economist from April 2001 through September 2003 and held the title of Senior Economist from September 2003 through August 2004.

Born and raised on a southern Illinois hog farm and educated at Southern Illinois University, Ross holds a Masters Degree in Agribusiness Economics. His studies and research expanded internationally through his work in Germany as a 1984 McCloy Agricultural Fellow and study travel to Japan in 1982, Zambia and Kenya in 1985 and Germany in 1987.

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