The Trump administration is breaking with predecessors in the way it approaches trade negotiations, a senior U.S. trade representative official said Monday, describing a process in which officials seek more narrow arrangements for specific trading partners.
“The way we're looking at this now is very tailored to the particular training partner,” Julie Callahan, assistant U.S. trade representative for agricultural affairs and commodity policy, said during Agri-Pulse’s Ag and Food Policy Summit.
The goal under this administration, Callahan said, is to secure visible progress as quickly as possible. Accordingly, officials are looking at trade barriers in the U.S. agriculture industry and trying to determine whether they are best addressed through isolated bilateral negotiations on a specific trade issue, through a sectoral-specific agreement covering agriculture, or through a broader trade agreement.
“There's a focus on, ‘how can we do things just differently,’ and it doesn't have to look the same as what everyone's used to,” Callahan said.
Narrower agreements like sectoral trade deals covering a specific industry, Callahan argued, may be preferable to sweeping FTAs. Comprehensive FTAs, which reduce tariffs across a range of industries can be slow to negotiate. They require Congress to set procedures and requirements through a Trade Promotion Authority, and involve lengthy cross-sector negotiations.
A sector-specific trade deal, however, may not need congressional approval and could see swifter negotiations.
Making “tangible progress” that is “immediately” visible is “the emphasis at this point,” Callahan said. “That's why we're taking a look at, ‘should it be a sectoral agreement? Should it be a very narrow agreement to resolve a particular issue.’” With some partners, she added, there may be a myriad of issues that require broader negotiations.
Sectoral trade deals have received increased interest in recent years. Under the Biden administration, USTR undertook a year-long probe into U.S. supply chain resilience that pushed for a more tailored trade policy that addresses issues on a sector-by-sector basis. The Biden administration also negotiated a trade deal with Japan covering critical minerals, which never received congressional approval, but was considered a free trade agreement under the Inflation Reduction Act’s tax rules.
Trump’s new USTR Jamieson Greer has also previously expressed support for sectoral deals.
“I would say absolutely there's opportunities for ag-specific negotiations,” Callahan said.
Callahan also provided some details on how USTR is approaching securing more “reciprocity” in U.S. trade relationships. President Donald Trump doubled down on his threat to impose reciprocal tariffs on April 2, telling reporters aboard Air Force One on Sunday that the day will be “liberating” for the U.S.
“We’re getting back to some of the wealth that very, very foolish presidents gave away because they had no clue what they were doing,” Trump said.
Callahan said that the administration isn’t going to pursue reciprocity by looking at individual products and determining a reciprocal tariff rate for each one, however.
“It's more the overall fairness,” she said during Monday’s Q&A session. She said officials are looking at the average applied tariff rate on U.S. agricultural goods into a foreign market and assessing “who's treating us fairly and who's treating us in a really messy way.”
At least for now, Callahan said, “we're really looking at a very simple level.”
Callahan, whose office of agricultural affairs leads U.S. engagement with the World Trade Organization committees on agriculture and sanitary and phytosanitary measures, also had some choice words on the current role of the WTO in global trade.
“There is a steep hill for the WTO to climb in order to come back to being an organization of relevance,” Callahan said. “The WTO is in desperate need of reform.”
Long stalled discussions in the agriculture committee aiming to set limits on subsidies, food export restrictions and market access, among other issues, are emblematic of the paralysis and other challenges facing the organization, Callahan charged.
“This one committee has been paralyzed – round and round and round for years with these conversations,” Callahan said, as countries with high tariffs seek to preserve the status quo.
One path forward, Callahan said, could be for the organization to pursue more plurilateral agreements that involve groups of like-minded countries, instead of multilateral agreements that apply to all WTO members.
But “so far, we're not seeing signs from some WTO members that they're willing to make the changes necessary for a viable organization,” Callahan said. She added that the U.S. is not ready to abandon the WTO, but stressed that “a lot of hard work needs to happen.”
“We really have a rocky road ahead.”
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