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Cutler Cites Progress in Asia Trade Relations, but Warns of Ongoing Challenges

On the final day of the USMEF Strategic Planning Conference, members received an informative breakdown of the trade landscape in Asia from Wendy Cutler, vice president of the Asia Society Policy Institute. Cutler has a long history of helping the U.S. meat industry overcome barriers in the international marketplace. She had a very accomplished career with the Office of the U.S. Trade Representative (USTR), serving as USTR’s chief negotiator on the Korea-U.S. Free Trade Agreement (KORUS) and leading the bilateral negotiations with Japan under the Trans-Pacific Partnership (TPP).

Cutler opened by recalling how explosive the issue of beef trade became in South Korea when the U.S. was negotiating the reopening the market, which had closed several years earlier following the first U.S. case of BSE.

“I knew beef was a sensitive issue in some Asian countries, but to see a million people come out on the street opposing the import of U.S. beef – that’s something I don’t think anyone was prepared for,” she said. “But we worked closely with USDA and the White House, and closely with many of you, to come up with a strategy to help ease the tensions. I wanted to share this story not only to show the long-term partnership that the government has had with many of you in the audience, but also to demonstrate how tough trade negotiations are. Sometimes people on the outside think you can just pound the table and get what you want, but it doesn’t generally work like that. You need to come up with creative solutions in order to find common ground.”

Cutler said she sees three major trade challenges facing U.S. agriculture:

  • Counter-retaliation by trading partners targeting U.S. agriculture exports
  • Trade agreements being forged by other countries without U.S. participation
  • The bilateral approach, currently preferred by the U.S., being such a lengthy process

“I’m not against bilateral negotiations – I think there’s a time and place for them,” Cutler said. “But I think any strategy for opening markets should not preclude a regional approach. And in particular I would emphasize that most trade agreements, at the end of the day, need a congressional vote. And one of the beauties of the Trans-Pacific Partnership (TPP), even though it never got to Congress, it that it only would have required one vote to approve a U.S.-Japan free trade agreement, a U.S.-Vietnam free trade agreement, improvement of NAFTA and other general improvements among the 12 TPP countries.”

Wendy Cutler, vice president of the Asia Society Policy Institute, discusses current trade negotiations and other key issues at the USMEF Strategic Planning Conference

Wendy Cutler, vice president of the Asia Society Policy Institute, discusses current trade negotiations and other key issues at the USMEF Strategic Planning Conference

Cutler reviewed the events that have taken place since the U.S. withdrew from TPP, starting with Japanese Prime Minister Abe’s efforts to convince President Trump to return to the agreement. After initially resisting bilateral negotiations with the U.S., Japan eventually reconsidered and subsequent talks led to a preliminary U.S.-Japan trade agreement. This agreement was recently signed and is now under consideration by the Japanese Parliament.

“The great news for you is that this is largely an agricultural deal,” Cutler said. “Under this agreement we secured from Japan most of the agricultural market access that we forfeited when we lost TPP. And I think what’s really great for beef and pork is that when this deal goes into effect, which should be Jan. 1, we’re going to come into that deal ‘caught up’ with the other TPP countries, meaning that we’ll get the same tariff rates that they’re getting.”

Cutler said U.S. agriculture is understandably encouraged by progress in the U.S.-China negotiations, as the two sides are said to be close to completing a phase one agreement that will improve access for agricultural exports. But she cautioned that the situation remains very volatile, and that finalizing the details of such an agreement often proves difficult. She also emphasized that these are enormously high-stakes negotiations, with some experts predicting a global recession if an agreement cannot be reached.