By Ambassador Darci Vetter, Former Chief Agriculture Negotiator, USTR
Editor's Note: Agri-Pulse and The Chicago Council on Global Affairs are teaming up to host a monthly column to explore how the U.S. agriculture and food sector can maintain its competitive edge and advance food security in an increasingly integrated and dynamic world.
There has been a lot of discussion lately about borders and what to do with them. The Chicago Council on Global Affairs released a paper recently that provides one of the best suggestions I’ve heard yet--invest in making borders more efficient. Farmers of all sizes, from countries around the globe, face high costs and great uncertainty when they choose to export. Uncoordinated, bureaucratic procedures and delays often make imported products uncompetitive, and can even result in products being spoiled or unsafe by the time they reach their destination. The Chicago Council’s paper, “Growing Markets, Growing Incomes: Leveraging Trade Facilitation for Farmers” by Andrea Durkin, highlights the ways that investing in trade facilitation can help solve these problems and boost the livelihoods of farmers in the United States and around the globe.
Last month, the WTO Trade Facilitation Agreement (TFA) entered into force. TFA calls on countries to expedite the movement, release and clearance of goods, and establishes measures to provide effective cooperation between customs and other authorities that operate at ports and on borders. Recognizing that making border procedures more efficient will require significant resources, TFA also contains provisions for technical assistance and capacity building. The OECD estimates that, when fully implemented, FTA will reduce the cost of trading good worldwide by 12.5-17.4 percent.
Trade in agricultural products, particularly perishable items such as meats, dairy products and fresh fruits and vegetables is growing rapidly, particularly in emerging economies, where rising incomes are spurring demand for higher-value imports. Yet emerging and low-income economies tend to have border conditions and policies, such as lengthy inspection procedures, poor storage and infrastructure, and paper-based documentation that is prone to being misplaced, destroyed or altered, that add costs and stifle trade growth. Border requirements are also more complicated for agricultural products, which often require additional scrutiny to ensure that they comply with food safety and plant and animal health protocols.
Faster, more streamlined border procedures would provide significant benefits for US agriculture. Emerging economies already consume 20 percent of US agricultural exports, and this figure will grow as their populations and incomes rise. As U.S. producers become more productive, further outstripping domestic demand, export markets will need to absorb more of our bounty. If US exports can reach their destination faster, while maintaining quality and safety, US farmers will see a higher return on each acre planted or animal fed.
Producers and consumers in emerging and low-income countries have much to gain as well. We shouldn’t forget that farmers in the developing world are also exporters, and will reap benefits from more efficient borders. Consumers in emerging economies will be big winners, too. More efficient borders allow consumers to access and more easily afford a variety of foods important for good nutrition, including meat, dairy and fresh produce. Better port infrastructure and reduced clearance times will also improve food safety and reduce food waste and loss.
Despite the significant opportunity to improve outcomes for producers of all sizes, neither of the entities created to fund TFA implementation projects (the WTO’s Trade Facilitation Agreement Facility and the Global Alliance for Trade Facilitation) is focused on assessments, training or projects related to trade in food. To ensure that the TFA delivers needed results for U.S. agriculture, the entire U.S. agricultural community needs to work together to ensure that a significant investment will be made to facilitate trade in the products we produce. This will require both the public and private sectors, including USDA, USAID and the Millennium Challenge Corporation, as well as industry and trade associations, to commit resources and share data to identify partner countries and the issues that should be addressed. The private sector should also work with foreign governments to participate in National Trade Facilitation Committees that will guide countries’ implementation of TFA and the shape the trade facilitation projects they undertake.
The current low-price environment should remind us that now is the time to develop and invest in strategies that will make US agriculture more resilient in the future. Trade facilitation programs are one such strategy to reduce the cost and risk of exporting—for U.S. producers and their counterparts around the globe.
About the Author: Darci Vetter served as Chief Agricultural Negotiator with the rank of Ambassador at the Office of the U.S. Trade Representative from 2014 until January of this year. She was responsible for bilateral and multilateral negotiations and trade policy coordination regarding agricultural trade, including negotiating the Trans Pacific Partnership agricultural package.
Before returning to USTR, Ambassador Vetter served as Deputy Under Secretary for Farm and Foreign Agricultural Services at USDA, where she oversaw the department's international activities. She had key responsibilities in international trade negotiations and export assistance programs, and coordinated USDA's role in international food aid and trade capacity building activities.
Ambassador Vetter also served as an International Trade Advisor on the Democratic Staff of the U.S. Senate Committee on Finance, where she advised Chairman Max Baucus and other Committee members on trade issues relating to agriculture, the environment and labor, including the 2008 Farm Bill. She began her career as a civil servant at the Office of the U.S. Trade Representative (USTR), where she worked on both agricultural and environmental issues, including the WTO Doha Round and NAFTA implementation.
Ambassador Vetter received her Master of Public Affairs degree and a Certificate in Science, Technology and Environmental Policy from the Woodrow Wilson School at Princeton, and her undergraduate degree from Drake University in Des Moines. She grew up in Nebraska on a family farm, and lives in Washington, DC with her husband and two small children.