Exporters Need Better Ag Tech Controls, Market Access, China Select Committee Hears

The U.S. needs to better protect agricultural technology from Chinese theft and push Beijing to reduce tariffs on U.S. crops, American farmers told lawmakers last week. Speaking during a panel in Iowa organized by the House Select Committee on China, at least one farmer said U.S. trade policy should focus more on securing free trade deals, which would help exporters become less reliant on China.

Many of the farmers’ comments were echoed by the two committee leaders, including Chair Rep. Mike Gallagher, R-Wis., who called for stronger export controls, investment restrictions and intellectual property protections for the American agricultural industry. He equated the administration’s current U.S. trade policy to a burglar robbing a home “dozens of times,” and “he told you that he's coming back tonight, and you still leave your front door unlocked and your valuables lying around in plain sight.”

The U.S has a “duty to protect all our technology, whether it's in Silicon Valley or in a cornfield here in Iowa,” Gallagher said. “We could do it with export controls, research security, outbound capital restrictions. But for whatever reason, we've chosen not to.”

The committee’s top Democrat, Rep. Raja Krishnamoorthi of Illinois, said the current U.S. approach isn’t sustainable. “We can't have a situation where we're constantly developing secrets and research and doing the hard work of innovating, and then all of a sudden having that getting stolen from us,” he said, “especially when agricultural exports, especially from your district and others, are so vital to our economy.”

Suzanne Shirbroun, president of the Iowa Soybean Association, called for “targeted export controls of sensitive technologies,” as well as "critical data and information," that are important for the agricultural industry. She also said the U.S. should better lobby China to reduce retaliatory tariffs on U.S. agricultural goods that were put in place in response to Trump-era tariffs on Chinese goods. She noted that U.S. soybeans still face a 25% Chinese tariff.

Gallagher pointed out that under the U.S.-China phase one trade deal, negotiated by the Trump administration, China “pledged to increase their purchases of US exports by about $200 billion. That didn't happen.” As a result, he said, “I think a lot of farmers are suffering.”

Shirbroun said she would ask the current field of presidential candidates to prioritize other free trade agreements. “When you have free trade, you're moving, cash is flowing, moving back and forth,” she said. “That opens up everything else as being a possibility.” She specifically said higher revenue from new free trade deals could be used to improve U.S. agricultural infrastructure, especially American river systems, which would in turn boost U.S. exports.

Shirbroun said she operates a farm four miles from the Mississippi River, which she uses to transport all her soybeans destined for international markets. “Our river system needs help,” she said, noting that some dams are being renovated but more need to be addressed. “We need to keep them moving.”

While Shirbroun said the U.S. needs to better target its trade restrictions against China, she also urged the lawmakers to “proceed cautiously,” adding that “there is not another market that can completely replace the Chinese market for the American soybean farmer.” She also disagreed with suggestions that the U.S. revoke permanent normal trade relations with China, which would “decimate agriculture exports, and could deal a great blow to the American farmer.” Republican presidential candidate Nikki Haley has said she would revoke China’s status if elected (see 2306270070).

Instead, the U.S. should diversify its export markets elsewhere, Shirbroun said. Gallagher asked whether any countries are “low-hanging fruit,” adding that it’s “tricky” to expand exports because “we just don't have a proactive” trade agenda. “How do we revitalize that if we don't think there's a big multilateral agreement in the offing?”

Shirbroun said she believes Southeast Asia is “a region of the world that's quite promising, and increasing food and agricultural exports to other countries also boosts our farm economy and lessens our dependence on China as a buyer of our products and lessens their global influence.”

But Gallagher stressed the need for more trade and investment controls, including to the Committee on Foreign Investment in the U.S., which may receive new jurisdiction to review a broader range of foreign agricultural purchases of American land. “We've had some reform of the CFIUS process, we're starting to pay attention to things like suspicious land purchases,” he said, adding that American businesses face a host of “obstacles” operating in China, and the U.S. should impose similar restrictions on Chinese firms. “There should be a level playing field,” he said. “And so if they're going to impose restrictions on us, we can do the same to them.”