The Office of the U.S. Trade Representative released its National Trade Estimate Report on Foreign Trade Barriers earlier this month, outlining trade issues which are unresolved and deemed detrimental to U.S. companies and interests.

“The United States has observed a growing trend among our trading partners to impose localization barriers to trade – measures designed to protect, favor, or stimulate domestic industries, service providers, or intellectual property at the expense of imported goods, services, or foreign-owned or developed intellectual property,” the report said in the introduction.

These actions can distort trade, discourage foreign direct investment, and encourage other trading partners to impose similar measures, the USTR report warned.

Diary and liquor restrictions still a problem

Canada is one of the U.S.’ most important trade partner, accounting for $312.1 billion in U.S. exports. The U.S. imported $346.1 billion worth of Canadian goods in 2014.

However, agricultural barriers still remain, including restrictions on the export of U.S. seeds, as well as the Canadian regulations for cheese compositions.

Tariff-rate quotas, particularly in the dairy sector, impose high duties on U.S. goods which exceed yearly tariffs.

The U.S. also sees the Canadian liquor sale system – where each province is in charge of all liquor sold – as a problem for U.S. exporters, as this system results in cost-of-service markups and restrictions on what provinces decide they will sell.

Problems also remain with Canada’s government procurement, in that the U.S. feels American firms are not fully able to compete for government service contracts.

TTIP may take down barriers but issues remain in trade with EU

With the European Union, the U.S. is actively trying to overcome existing trade barriers through the negotiation of the Transatlantic Trade and Investment Partnership (TTIP). These trade barriers exist in several sectors, from automobiles to agriculture to pharmaceuticals.

The U.S. maintains that its transport trucks are at a commercial disadvantage because of differences in how the EU and the U.S. measure the length of their vehicles (the EU measures tractors from the front bumper to the rear, while the U.S. measures trucks on the trailer alone).

The U.S. maintains that due to EU restrictions on the length of truck-trailer combos, U.S. trucks are only able to pull shorter semi-trailers, which makes these trucks uncompetitive in the EU market.

Food labeling is another area of contention.

The EU will force food companies to display nutrition labeling on all products starting in December 2016, but have yet to finalize these requirements.

Additionally, member states have been given significant leeway to set their own requirements, which the U.S. government contends will add to the cost of selling in these markets.

The U.S. is also unhappy with the lack of transparency and uncertain legislation of EU member states in regards to pharmaceutical products. The USTR has further issues with lack of consideration in government procurement contracts across the trading bloc.

China remains unpredictable

Of all of the U.S.’ major trading partners, it has by far the longest laundry list of issues with China, its third-largest export market.

China still blocks exports of American beef, and has maintained restrictions on exports from several U.S. states over the export of poultry, due to prior concerns about avian flu.

The USTR is also unhappy with the Chinese government’s lengthy approval process for agricultural products derived from biotechnology, notably corn and dried distillers’ grains.

China’s excess capacity, particularly in steel, is also damaging the U.S. economy, the USTR said. China’s steel overproduction has wrought havoc on worldwide steel operations, depressing prices and making it nearly impossible for foreign and American steelmakers to recoup their costs and turn a profit on the metal.

The U.S. is also concerned by the nature of China’s agricultural regulations, which the report terms as among the least transparent and most unpredictable in the world market. The report stated:

Capricious practices by Chinese customs and quarantine agencies delay or halt shipments of agricultural products to China.

The majority of difficulties lie with China’s failure to abide by intellectual property restrictions, such as the protection of trade secrets, pirating of technological goods, and copying of manufacturing goods.

Thefts of trade secrets are “commonplace,” the report said, with both the Chinese government and military successfully hacking into computers of U.S. firms and stealing terabytes of information.

Software piracy remains a major issue, while the online piracy of movies, books, and games continues unabated.

Counterfeiting of goods – from designer handbags to medications – is also an issue that has yet to be resolved, the report stated.

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Barack Obama became the first U.S. president to visit Argentina in 20 years last week, another landmark trip on the heels of his recent visit to Cuba.

The trip marks a significant turning point in bilateral relations between the two countries. Under the previous 15 years of Kirchner rule – first President Nestor Kirchner from May 2003 to December 2007, and then his widow Cristina Fernandez de Kirchner from December 2007 to December 2015 – the bilateral relationship suffered.

U.S.-Argentine relationship breakdown

Following the Argentine fiscal crisis of 2001-02, the U.S. supported the decision of the International Monetary Fund to cut off assistance to Argentina until the Argentinian government agreed to an economic recovery plan.

Anti-American sentiment in Argentina increased in 2011 when the White House neglected to visit Argentina during Obama’s first trip to South America.

Tensions between the two states mounted in August 2014, when a U.S. court declared Argentina’s plan to address its debt default to be illegal.

The Argentine government under Fernandez de Kirchner had planned to ask investors to swap roughly $100 billion in defaulted bonds for new, locally issued debt.

However, the U.S. court instead labelled the plan as a “violation of the current orders” of the court.

Fernandez de Kirchner fired back, telling Argentinians the next month that “if anything happens to me…look North.”

Bilateral trade deteriorated between the two countries. In 2014, only 5.9% of Argentine exports were purchased by the U.S., down from 11% in 2005. American imports in Argentina also fell from 18% in 2001 to 12.7% in 2014, according to the Clarin newspaper in Argentina.

New Argentine leadership signs TIFA

Fernandez de Kirchner left office in December 2015 after completing maximum term limits, while opposition candidate Mauricio Macri, the staunchly pro-business outgoing mayor of Buenos Aires, won the presidency.

Macri moved quickly to resolve Argentina’s outstanding debt to creditors, reaching a US$4.65 billion settlement which would see the largest remaining holdout creditors get 75% of the outstanding amount on their full judgments.

The move also allowed Argentina, Latin America’s third-largest economy after Brazil and Mexico, to return to international capital markets for the first time in over a decade.

That set the stage for renewed talks with the U.S., and resulted in the signing of the bilateral Trade and Investment Framework Agreement (TIFA) on March 23. The agreement gives the two countries a framework under which to advance economic cooperation.

A renewed commitment to bilateral trade relationship

Included in the trade agreement is a commitment to work together to increase their cooperation in the World Trade Organization, improve market access on both sides, and strengthen Argentina’s capacity to combat organized crime.

The agreement also sets plans in motion for the U.S. to send six trade delegations to the Latin American country.

The first will take place in April and be led by U.S. Small Business Administrator Maria Contreras-Sweet, who will then sign a Memorandum of Understanding with Argentina’s Ministry of Production. The focus of this delegation will be on supporting and promoting women entrepreneurs.

The bilateral pact will also help the Argentine government establish a network of business assistance centers, and help connect existing Argentine businesses to international partners via the Small Business Network of the Americas.

The U.S. also expressed support for Macri’s economic reforms, and vowed to provide assistance. Reforms include devaluing the peso, slashing export taxes, and cutting the red tape previously required to import parts and equipment.

U.S. Trade Representative Michael Froman said:

The agreement provides a vehicle for strengthening U.S.-Argentina trade and investment relations at an important time.

“It reflects President Obama’s strong interest in improved bilateral relations with one of the most important economies in the western hemisphere, and to promoting increased economic opportunities between us.”

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Negotiations of the EU-U.S. trade deal, known as the Transatlantic Trade and Investment Partnership, or TTIP, may have hit a snag after a leaked document appears to give the U.S. and large corporations disproportionate weight in future trade decisions.

The leak was obtained by Great Britain’s The Independent working with campaign organization Corporate Europe Observatory (CEO).

Giving the U.S. first access

The document indicates that the unelected European Commission has agreed to consult with the U.S. government prior to adopting new trade legislation, according to a new EU proposal on horizontal regulatory cooperation published March 21.

Under this process, the CEO argues that the U.S. firms and major corporations could have outsize influence on future EU trade policy. The leaked document pertains to the chapter on regulatory cooperation with the United States.

According to CEO:

The proposal provides big business groups with the tools to influence legislation that they have been demanding, including a mechanism by which transatlantic business coalitions can include their own preferences in the regulatory cooperation working program.

The new structure would also expand the role of the Commission, which is an unaccountable EU body, CEO said.

Under these suggested structures, the U.S. government could potentially question and demand changes to regulation before member states of the European Union have the opportunity to debate them.

EU Commission claims false analysis, French not amused

The organization argues that EU citizens and their governments will be sidelined in the trade process.

A spokesperson for the EU Commission flatly denied that the proposed structure for the deal would give more weight to concerns from the U.S. and big business more than those from member states.

The text on regulatory cooperation will be published soon for everyone to see that this so-called analysis is completely false, presents a biased view of the European Commission’s work, and ignores the reality of EU texts.

“Regulators – not trade negotiators – will continue to lead regulatory cooperation initiatives.”

However, a top French official is taking a quite different view of the power struggle between the two sides.  French Trade Minister Matthias Fekl said last week that the U.S. will have to concede more if the trade deal is to go through.

The deal is contingent on the U.S. relaxing some of its demands, he argued.

“If there are no concessions on access to public markets in the United States, on the protection of geographical indications and on the investment court system, then the question is why we’re even still negotiating,” Fekl said.

Talks to continue as the players change

The TTIP is aiming to coordinate regulation on a number of products in the EU and the U.S., including financial services and banking, environmental protection, and food and product safety.

Other sensitive topics include public procurement. Officials on both sides of the negotiating table met in early March to discuss the topic, and are expected to meet for two additional rounds of talks on the issue before the start of summer.

The two sides made some progress on the controversial investor-state dispute settlement (ISDS) in early March. However, it remains unlikely that the TTIP agreement will be completed before the U.S. presidential election is decided this November.

The agreement may not, in the end, apply to the United Kingdom; the UK is scheduled to hold a referendum on its EU membership on June 23.

Do you think the TTIP presents a good opportunity for all countries involved?

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Having long been on the outside of global movements for cleaner technologies and methods to address climate change, India made a landmark decision during the Paris climate change negotiations late last year to put its support behind renewable energy.

The Indian government vowed that by 2022, the country would increase its renewable energy generation five-fold, producing 100 gigawatts of solar power, 60 GW of wind-powered energy and 15 GW generated by other forms of renewable energy.

With these increases, renewable energy would account for nearly 40% of India’s installed capacity by 2030.

Renewable energy currently accounts for 13% of installed capacity.

U.S. dispute over sourcing

However, a decision by the World Trade Organization on Feb. 24 may derail, or at least temporarily delay, parts of India’s implementation of this renewable energy plan.

The WTO ruled against India, instead siding with the U.S. over India’s National Solar Mission directive to source solar panels domestically.

The U.S. brought the case to the WTO in February 2013, and lodged a second challenge to the plan in February 2014.

In the Feb. 24 ruling, the WTO found that the requirement violated key terms of the General Agreement on Tariffs and Trade of 1994, as well as the Agreement on Trade-Related Investment Measures, agreed in that same year. The TRIMS agreement stipulates that domestic regulations apply to foreign investors.

Support from Greenpeace

India has protested, arguing that aiding the growth of its own renewable industries will aid global competition and improve services and pricing.

Greenpeace USA has also announced it is supporting India in the dispute.

Greenpeace India campaigner Pujarini Sen said in a statement issued by the organization:

The WTO ruling – and the U.S. decision to pursue it – is a setback to India’s renewable energy ambitions.

“The Indian government is demonstrating commitment to India’s fledgling solar manufacturing sector, which needs initial support to enable it to compete with the price of imported products and to its own roadmap for a green economy solution to global climate change.”

The U.S., however, argues that Indian solar panel manufacturers are receiving benefits from the Indian government that are not available to foreign manufacturers, thus violating trade law.

“The United States strongly supports the rapid deployment of solar energy around the world – including in India,” U.S. Trade Representative Michael Froman said in a statement.

“But discriminatory policies in the clean energy space in fact undermine our efforts to promote clean energy by requiring the use of more expensive and less efficient equipment, raising the cost of generating clean energy and making it more difficult for clean energy sources to be competitive.”

Setback won’t stop renewable energy plan

India had said in late January that it would modify its solar program to assuage U.S. concerns as a means to avoiding an unfavourable WTO ruling. This appears to have been unsuccessful.

However, one analyst pointed out that the National Solar Mission was but a bit part in an otherwise massive program to get India’s renewable strategy up and running.

The NSM only accounted for 5,000 megawatts (5 GW) of power in total, a mere 5% of the total 100 GW plan.

“What was isolated in this was an industrial policy instrument,” Ilaria Espa, a senior research fellow at the Bern-based World Trade Institute, told Climate Change News.

India has said it will appeal the ruling.

Do you think the WTO ruling is fair?

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Rice producers in the U.S. will now be able to export their product to China, the USA Rice trade organization reported in late January.

This would mark the first time in recent history that American-produced rice is allowed into the Chinese economy, the trade organization said. Negotiation of the deal took 15 years; China was admitted into the World Trade Organization in 2001.

The agreement is “a long time coming,” USA Rice Chairman and rice farmer Dow Brantley said.

Overcoming complicated import regulations

He noted that the phytosanitary regulations are “more complicated and detailed than any other rice protocol in the world,” but was thrilled that the Chinese market is now open to American rice farmers.

Before a rice producer can market its products in China, it must first be inspected separately by the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service and the organization’s Chinese counterpart, the General Administration of Quality Supervision.

Chinese officials must also provide a list of Chinese ports which are authorized to receive American-grown rice. The Chinese government must then issue a decree to authorize the import of the foreign-grown rice.

The agreement between the two economic powers are unlike any other rice agreement the U.S. has signed, one executive at a rice mill in California said. He added that the agreement was years in the making.

Though the agreement has been reached, shipments are not expected straightaway. Once inspections are completed, shipments to China could begin by early spring.

This agreement comes after a deal fell through a year ago, another industry report said. The negotiations reportedly failed over Chinese demands for American rice mills to set traps for beetles and other insects that can destroy stocks.

This round of talks was nearly sidelined when the Chinese side wanted American rice growers to label each variety of rice in its shipments.

However, the American side sidestepped the issue, saying that it was a business matter and should not be considered as part of the health and safety discussions. American rice producers must still list all the rice varieties which may be contained in shipments.

Incredible opportunity for American rice producers

The USDA projects that China will import 4.7 million tons of rice in the 2015-16 year, an increase from 4.3 million tons of rice in the previous year.

Though the U.S. has yet to export rice to China, China has a quota of 2.7 million tons of rice that can be imported from the U.S. which was decided when it secured WTO membership. The U.S. expected to export approximately 3.1 million tons of rice in 2015.

The opening of the Chinese market to U.S. producers is warmly welcomed by farmers.

We wouldn’t have to have much of that market to make a material difference for our industry here,

Arkansas firm Producers Rice Mill Inc. President and CEO Keith Glover said.

China is the world’s largest rice market in the world, with Vietnam and Myanmar providing a substantial chunk of its imported rice. Pakistan and Thailand also provide substantial amounts of rice consumed in China.

China has steadily increased the amount of rice it has imported in the past few years, though it used to be self-sufficient. According to the USDA, China became the world’s top rice importer in 2012, surpassing Nigeria.

How do you think this new lucrative market will affect US agriculture? Do you think China will open its doors to more agricultural imports like this?

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In January, the Canadian dollar fell to the lowest level seen since spring of 2003, settling at around 70 Canadian cents to the U.S. dollar.

The Bank of Canada has continuously lowered the interest rate, as part of a bid to redistribute the economic pain from low oil prices and bottom-level commodity prices to other regions and sectors of the economy.

The sharp drop in the dollar’s value has had a demonstrable impact on the Canadian economy, most notably in international trade.

Natural resources benefiting from payment in U.S. dollars

Broadly speaking, any product manufactured or produced in Canadian dollars and sold abroad, especially in the U.S. market, has benefitted.  However, industries relying on U.S. imports at any point in their business have been stung by unfriendly economics.

At the moment, natural resources being exported to the U.S. are receiving an unexpected boon.

This includes forestry products, energy products – including oil – and minerals and metals products.

The economics are easy to grasp: if natural resources are produced, excavated, and refined in Canada, using Canadian equipment and employees, the costs of production remain the same.

Once these are sold in U.S. dollars – which all metal commodities are priced in, as a default – then the economic rewards for Canadian producers are higher.

Another unexpected boon from the low loonie is the sale of used Canadian cars to U.S. buyers. According to a report from Desrosiers Automotive Consultants, nearly 200,000 used cars were exported from Canada to the U.S. in 2015.

Sales of used Canadian vehicles to American consumers are at their highest levels since 2002, and are substantially higher than the roughly 75,000 used cars sent to the American market in 2014, the report said.

However, the focus on the American market is constraining the availability of used vehicles for Canadian consumers, which drive up prices for used cars in the Canadian market.

Cooling dollar makes Canada a hot destination

Another winning industry in the loonie downturn is travel, with foreigners, particularly Americans, flocking to Canadian tourist attractions to take advantage of a favorable foreign exchange rate.

Because the Canadian dollar is so weak, many Canadians are opting to forego international travel – and may increase the amount of travelers to these Canadian sites.

Canada’s geographic position is a major boost for its economy, as it sits atop the country which arguably has the best performing economy in the developed world at the moment. This reality has softened the blow of the falling dollar, and made it possible for export-oriented industries to continue to thrive.

Canadian manufacturers urged to source locally

Canadian companies suffering from the shift in the Canadian dollar are those which rely on U.S. imports for any part of their supply chain, either in securing parts for their manufactured products or relying on raw materials only available from the U.S.

Canadian economists have advised Canadian companies to aim for all their value chain to be based in Canada as much as possible.

One major drawback for Canadian households as the loonie drops is the cost of fresh fruits of vegetables, largely sourced from California, Florida, and other warm-weather climes.

The price of fruits and vegetables climbed by roughly 10% in 2015, and are slated to go up by as much as 4.5% this year, according to a report from the University of Guelph’s Food Institute.

Headlines in the last few weeks have focused on the increases to cauliflower prices in particular, which are driven skyward not only by the poor exchange rate, but also because of the shortage in the cauliflower crop this year.

High food prices will cut into the budgets of Canadian households, and even more so for those living in the north – where food prices were already sky-high due to high transport costs.

Canadian officials warn that the working poor, students, and senior citizens are likely to suffer most from these price changes.

Has the drooping Canadian dollar affected your business? What are you doing to protect from currency fluctuations like this?

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The Trans-Pacific Partnership was finalized in October, and has since been a topic of intense debate.

However, due to the size of the final document and its many specifics concerning tariff liberalization, customs, trade facilitation, competition, and other critical topics, it’s understandably taking time for all of the new stipulations to be digested by the larger public.

As environmental groups and analysts make headway with reading through and analyzing the agreement, some groups have come out resolutely against the agreement, arguing that tying these economies together more tightly will make it harder to pass more stringent environmental regulations in the future.

Environmental regulations don’t go far enough

One U.S. law professor pointed out that this is the first multilateral treaty in recent years which required the adoption of only one multilateral environmental agreement, the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

Previous trade treaties required constituent parties to abide by seven of these types of agreements.

Moreover, environmental groups point out that according to the terms of the trade agreement, a state will not be in violation of these regulations if it fails to comply with the stipulations set out in the agreement.

Violating an environmental aspect of the TPP requires proof that the measures taken by the country in question not only go against the environmental rules, but also affect trade and investment with other signatory states.

Complete silence on climate change

Environmentalists are also upset by the treaty’s lack of regulations on Japan’s whaling trade or Singapore’s trade in shark fins, and are particularly concerned that the trade agreement fails to mention climate change or global warming at all.

“Beyond making no effort to combat climate disruption, the TPP would actually fuel the climate crisis,” the Sierra Club said in its report, “A Dirty Deal,” released earlier in December.

If approved, the pact would increase greenhouse gas emissions and undermine efforts to transition to clean energy.

The organization also maintains that the deal would open up avenues for oil and gas firms to overturn energy policies in trade dispute tribunals, and increase greenhouse gas emissions by spurring companies to move their manufacturing hubs to less environmentally friendly economies.

Overfishing provisions the one bright spot

It’s not all doom and gloom for the environment, however, with specific regulations attached to try to stem overfishing.

The environmental chapter includes provisions that prohibit signatory nations from providing subsidies to fishing practices which promote or support overfishing of marine species deemed to be in danger by national governments, regional fishery management organizations, or scientific evidence.

Moreover, TPP participant nations are now prohibited from extending existing subsidies that would endanger low stocks of endangered fish.

Countries are also required to notify trade partners of fishing subsidies which are part of their policies, as well as additional information about the state of the fish population.

The measure is significant, as participants in the TPP trade agreement – which encompasses 12 nations, or an estimated 40% of the world’s economy – account for eight of the top 20 global fishing nations.

Mixed opinions sparking conversations about next steps

Though the Sierra Club is decidedly disappointed in the agreement, the World Wildlife Fund is encouraged.

“No major trade agreement before this one has gone so far to address growing pressures on natural resources like overexploited fish, wildlife, and forests,” WWF-US President and CEO Carter Roberts said in October, shortly after the talks were completed.

With the right implementation and compliance procedures, the conservation commitments in this trade agreement could be game-changers.

Roberts added that each nation will have to individually undertake the appropriate policies to comply with the regulations.

While some environmental groups claim the TPP agreement will make it harder to implement new, more ambitious environmental regulations, one lawyer pointed out that the agreement is an important step to ensure that countries which fail to comply with existing environmental regulations will catch up to their peers.

Furthermore, making it harder for participant nations to introduce new economic policies is not as dangerous as some environmental groups make it seem.

Governments have used environmental policies to limit foreign competition, which has led to protectionist policies, resulting in domestic industries continuing to violate existing environmental protocols.

Do you think the TPP agreement goes far enough to address environmental issues?

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It’s been a long and winding road for the U.S. and South Africa over the issue of poultry, one that may even cause the U.S. to exclude South Africa from the African Growth and Opportunity Act (AGOA), a trade deal between the U.S. and 40 African nations.

On November 5, U.S. President Barack Obama issued a letter to South Africa, saying the U.S. would suspend duty-free treatment of South African agricultural goods exported to the U.S. should South Africa fail to address what the U.S. government saw as barriers to American products.

Obama handed South Africa an ultimatum

“I am taking this step because South Africa continues to impose several longstanding barriers to U.S. trade, including barriers affecting certain U.S. agricultural exports, and thus I have determined that South Africa is not making continual progress toward the elimination of barriers to United States trade and investment as required by Section 104 of AGOA,” he said in the letter, published on the White House’s official web site.

Simply put, if South Africa does not remove the anti-dumping duties it put on U.S. poultry exporters for flooding the market, the country will be excluded from the trade deal.

One commentator asserted that this was a marked digression from previous practice.

Cyril Prinsloo, a researcher at the South African Institute of International Affair’s Economic Diplomacy Program, noted that “The suspension of AGOA preferences to sub-Saharan African countries in the past depended on their commitment to democratic principles and respect for basic human and workers’ rights.”

Obama gave South Africa 60 days to resolve all the issues surrounding the AGOA conditions.

Preserving duty-free access to a top trade market

South Africa has responded, successfully negotiating a veterinary trade agreement that would restrict exported American chicken to poultry which had only been raised in states which did not experience a bird flu outbreak in the past year.

In 2014, 21 U.S. states reported incidences of bird flu, which has concerned South Africans.

Losing duty-free access to the U.S. market would have repercussions beyond the poultry industry.

Though the U.S. is no longer the country’s top trade partner – that post has been held by China since 2014 – it is South Africa’s third largest trade partner, with South Africa exporting more than US$8 billion in 2014.

South African critics of the trade arrangement argue that South African chicken farmers stand to lose from the influx of American-bred poultry.

But there are important reasons why South Africa benefits from being a part of this trade agreement, for reasons that are not related to poultry.

Protecting non-poultry farmers

AGOA inclusion has provided a boon for firms producing other agricultural producers, such as wine, nuts, and avocados.

The opportunity to actively participate in a globally competitive market, unhindered by trade barriers, is an important one for South Africa.

Participating in mature markets presents a bevy of benefits for South African firms, increasing their efficiency, strengthening their marketing, and honing their market research skills.

South African agricultural producers also get a major stamp of approval when their products are allowed into U.S. markets. It sets off a trigger effect, encouraging other developed economies to import similar goods from South Africa.

As it stands, it appears U.S.-bred poultry will be allowed into the South African market early next year.

It remains unlikely that the U.S. will exclude South Africa, sub-Saharan Africa’s second-largest economy after Nigeria, from the AGOA.

But South Africa will have to make substantial progress in meeting U.S. demands and dismantling what the U.S. sees as trade barriers to ensure it’s not left out in the cold.

Do you think the U.S.’s demands on South Africa are fair and warranted?

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A long-running trade dispute between the United States and Mexico over the American sugar market has been resolved by the U.S. International Trade Commission (U.S. ITC), which ruled in late October that Mexican imports of the commodity had hurt U.S. sugar producers.

Though the two states had reached an agreement in December 2014 to reduce Mexican imports of raw sugar to the U.S., the American Sugar Alliance – which represents the interests of American sugar farmers and producers – kept up the pressure for an independent investigation to determine whether Mexican exports counted as “dumping”.

Harmful drop in sugar prices attributed to Mexican imports

The alliance pointed to a significant drop in sugar prices, which fell by more than US 40 cents per pound, as a reason for the investigation.

The U.S. ITC found in favor of U.S. sugar producers, saying that the American industry is “materially injured” by Mexican sugar imports.

The full report from the trade body will be available soon.

The decision will impact sugar producers in 10 U.S. states which produce sugar beet, and four states which produce sugar cane.

Mexican imports account for a significant proportion of the U.S. sugar market. According to the U.S. Department of Agriculture, U.S. sugar producers are expected to produce 8.8 million tons this year, of which 5.1 million tons will be beet sugar, and 3.7 million tons will be cane sugar.

The U.S. is also expected to import 3.4 million tons of sugar, of which 1.5 million tons will be imported from Mexico.

In 2013, total U.S. sugar production amounted to 8.5 million tons. Imported sugar amounted to 3.6 million tons, 2.1 million tons of which were imported from Mexico.

Opinion split on ITC ruling

One U.S. legislator from Louisiana wholeheartedly supported the decision.

The “unanimous ITC decision confirms what we already know – Mexico’s sugar industry has been cheating on our agreements for some time, hurting sugar producers across South Louisiana,

Representative Charles Boustany said in an Oct. 20 statement.

“If other countries want to sell in the U.S. market, they need to play by the rules.”

The Sugar Alliance insists that it is open to free trade, as long as all participants compete fairly.

The ruling “helps accomplish that goal by upholding the governments’ agreement and addressing the unfair trade practices that were injuring American farmers, workers, and taxpayers,” spokesman Phillip Hayes said in the statement.

Not everyone in the U.S. is thrilled with the ITC decision, however. The Sweetener Users Association – which represents the interests of companies who use sugar in their products – said the ruling is a ‘missed opportunity’.

Sugar policy reform badly needed according to SUA

“The idea that domestic producers were suffering at a time when they made record profits is confounding,” the SUA said in an Oct. 20 statement.

“What is clear, however, is that the temporary decline in U.S. sugar prices in the 2012/13 and 2013/14 crop year was attributable to the United States’ failed sugar policy, excess supply in the combined U.S.-Mexican sugar sector, and the normal working of commodity markets – not by imports from Mexico.”

The sugar policy criticized by the SUA was first implemented in 1981 with the Farm Bill, and rests on a combination of price supports, tariff-rate quotas, and a domestic marketing allotment overseen by the U.S. Department of Agriculture.

These measures are used to keep the price of sugar artificially high.

The SUA vowed to step up its efforts to knock down the sugar program in a bid to lower prices for its members.

The SUA said in the statement:

Changes made to the sugar program in the 2008 farm bill caused U.S. sugar prices to soar well above the already high world price between 2009 and 2012,”

“SUA and sugar-using industry representatives will redouble our efforts to work with Congress to enact meaningful sugar program reform.”

Do you think this ruling will benefit sugar production in the U.S.? Or is it the U.S. sugar policy that needs to be updated?

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Newly elected Prime Minister Justin Trudeau made a litany of campaign promises to Canadian voters over the course of his election campaign, one of them being to improve relations with Canada’s southern neighbor.

Relations between Canada and the U.S. had grown testy under the outgoing Harper regime, largely due to differences in opinion over the XL Keystone pipeline.

Harper was insistent on the project, going so far as to call it a ‘no-brainer,’ while U.S. President Barack Obama was lukewarm on the project, before officially rejecting the project in early November.

But now that Trudeau has assumed his new role, he will first have to contend with a long-burning trade issue between the two countries: that of softwood lumber.

Softwood lumber trade put a sliver in US-Canada relations

Disputes over the softwood lumber trade – which applies to wood originating from conifers, about 80% of the global lumber industry – have plagued bilateral relations between the two states since the 1980s, and have most recently been addressed by the 2006 agreement.

Under this agreement, which was scheduled to expire in 2012 until being extended for another two years, the U.S. agreed to lift antidumping duties so long as lumber prices remained above a certain level.

Canada was responsible for enforcing lumber restrictions, while provincial governments were expected to make reforms to remove any form of subsidies on the good.

The 2006 agreement expired Oct. 12.

Reuters reported,

A Canadian group representing the industry is calling for a simple extension of the 2006 deal, while U.S. industry representatives are calling for changes to the agreement.

“The 2006 agreement is now outdated,” Reuters quoted U.S. Lumber Coalition chairman Charlie Thomas on Oct. 26.

“If Canada continues to stay away from the negotiating table, the U.S. industry will eventually have no choice but to use our rights under U.S. trade laws to offset the unfair advantages provided to the Canadian industry.”

The U.S. is impatient for an update to the dated agreement

A report from the Canada West Foundation, a nonpartisan think tank, argues that U.S. market share of lumber is unlikely to decrease under the current agreement.

The foundation points to the fact that the U.S. timber supply outstrips the Canadian supply, and underlines that this decrease in supply has already hit the industry in British Columbia, where the industry is largest.

Since 2005, the report contends, 24 mills have shut down; of these, 21 remain shuttered. U.S. production of timber continues to increase, Canada West stated.

BC timber exports to the U.S. amount to C$3 billion, annually, while critics argue that the U.S. desperately needs Canadian timber for its housing needs.

Canada West expects another court battle before the World Trade Organization for the issue to be resolved, once again.

B.C. paper industry also under fire from the U.S.

A smaller trade dispute, also affecting British Columbia firms, is coming to light.

Two companies, Catalyst Paper and Irving Paper, have been on the receiving end of high duties of up to 19% from the U.S. over the export of its specialty paper.

U.S. customs officials maintain that Canadian companies are subsidized and are “dumping” the product in the U.S., where producers of the same product cannot afford to sell at equally cut-rate prices.

The duties were fixed after the U.S. Department of Commerce followed up on a complaint made in February 2014 by a U.S. group representing the paper industry.

The department investigated two Canadian firms, Hawkesbury Paper and Resolute Paper, before making its decision.

Catalyst told the Vancouver Sun that it has had to pay C$1.3 million to the U.S. Treasury Department for shipping 17,000 tonnes of its products. Catalyst expects to pay more once another ruling from the Treasury Department is made.

Do you think these issues will quickly be resolved under the new Canadian government? What do you think a new lumber agreement will look like?

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