Senators Praise Ag Negotiator Nominee, Question Adminstration's FTA Stance

Senate Finance Committee members praised the experience of Doug McKalip, the administration's nominee to be chief agricultural negotiator in the Office of the U.S. Trade Representative. McKalip, a senior adviser on international trade policy and other matters to the agriculture secretary, is a career staffer at USDA.

But Republicans on the committee criticized the administration's reluctance to negotiate free trade agreements, instead opting for "economic frameworks" that do not change tariffs but can address non-tariff barriers to agricultural exports, such as sanitary and phytosanitary rules.

McKalip said that even if there aren't FTAs under consideration, "I promise you, I will fight for full access for American agriculture." He made the analogy that if free trade agreements are Eagle Scout level, specific access agreements like Japan loosening its safeguard calculations for American beef (see 2206030006), or India opening up to American pork (see 2201100063) are like merit badges on the uniform sash.

Committee ranking member Mike Crapo, R-Idaho, said during a July 28 hearing on the nomination that one-third of U.S. crops are exported, but with the right trade policy, more could be sold outside the U.S. "What is holding us back is, again, a misplaced Biden Administration policy: a moratorium on new trade agreements, and limited enforcement of existing agreements," he said. "A lot of our potential trading partners maintain high agricultural tariffs and regulatory measures that are essentially a guise for protectionism. We need to tear them down.

“For example, India applies an average agricultural tariff of 36 percent. It also applies a number of non-science-based restrictions on U.S. agriculture, such as unreasonable GMO certifications on apples, potatoes, soybeans, wheat and other crops."

McKalip assured Crapo that the Indo-Pacific Economic Framework would be talking about SPS, but when pressed about whether any promises to change biotech approvals could be enforced, he said, "Whether there are enforcement measures in IPEF, or what those look like, is yet to be determined. I would push for actual enforcement mechanisms. Having that lever in the toolbox is important."

Sen. Rob Portman, R-Ohio, a former USTR, expressed doubt that IPEF countries would be interested in lowering barriers to U.S. agriculture without the U.S. lowering tariffs on manufactured goods those countries export.

He also pushed McKalip on why the U.S. is not continuing to work on an FTA with the U.K. begun under the previous administration. "U.K., we’re about 4/5 of the way toward an agreement," he said. "They’ve made huge concessions on agriculture to New Zealand and Australia in the last year, as you know. Are you willing to sit down with the U.K. and finish that agreement?"

McKalip, even if confirmed, would not have the authority to make that decision. He told Portman, "You’re absolutely correct. There’s a tremendous opportunity."

Finance Chairman Ron Wyden, D-Ore., and Sen. Debbie Stabenow, D-Mich., both noted that Canada has not fulfilled its USMCA promises on dairy. McKalip said Canada fell far short of the mark in its changes to its tariff rate quotas.

"We will fight fully for full retail access to the market for our dairy products," he said. "The kind of tenacity we showed on potatoes [in Mexico], we will utilize on dairy. This is not something we will let rest."