THE TTALK QUOTES


On Global Trade & Investment
Published Three Times a Week (with occasional bonus quotes) by
The Global Business Dialogue, Inc.
Washington, DC  Tel: 202-559-9316
No.19 of 2020
SATURDAY, MARCH 21, 2020

Click HERE for Wednesday's quote on Covid-19 and
the Nation State.
WHEN YOU NEGOTIATE, PUT CHICKEN ON THE AGENDA

  "With the imminent launch of trade talks between the U.K. and the U.S., we the undersigned stress the importance of including U.S. poultry products in the agricultural chapter of any new trade agreement with the U.K."

Rep. Steve Womack (R-Arkansas) et. al.
March 10, 2020
CONTEXT
Congressman Steve Womack represents Arkansas’s 3rd Congressional District. Located in the northwest corner of the state, the 3rd is home to Bentonville (of Walmart fame), Smithville, and lots of chickens. Among the 50 states, Arkansas ranks number 2 in the production of chickens and number 3 for turkeys. Rep. Womack is Co-Chair of the Congressional Chicken Caucus, and on March 10, he, together with 46 other members of Congress , sent a letter to U.S. Trade Representative Robert Lighthizer, urging him to include poultry products in any trade negotiation with the United Kingdom. 

Today, of course, both the United States and the United Kingdom are wholly focused on the Covid-19 pandemic. But at some point, more routine issues, issues like the long-discussed trade agreement between the United States and the United Kingdom, will come back into focus. When that happens, trade in poultry products will be something the negotiators will need to thrash out. More specifically they will need to talk about the famous chlorine wash of processed American chicken.

As the Congressional letter explains, the EU set standards in 1997 that effectively precluded the importation of American poultry products into EU countries, including, of course, the United Kingdom. Why? The short answer is that some American producers use a chlorine wash, which the EU regulations prohibit. The letter from the 47 members of Congress addresses that issue in this key paragraph:

U.S.-produced poultry is safe, and inspections throughout the entire poultry production process ensure consumer safety. Antimicrobial spray washes are used in the production process to improve food safety. All rinses, including chlorine, must be approved by the U.S. Department of Agriculture (USDA) and their use is limited to specific amounts. This is just one step in the process -the USDA also inspects all poultry produced in the U.S. Additionally, only an estimated 10% of the processing plants in the U.S. use chlorine throughout production. Scientific research, including that of the European Food Safety Authority, confirms using chlorine-washed poultry does not pose any human health concerns, nor is it present in the final product. The U.S. food safety system is second to none, and it is built on extensive scientific research to assure safety of the product and the process.

COMMENT
Chlorine etc. There is a lot at play here, but for a moment let’s stick with the question of why the Europeans (and possibly the British) are so concerned with the above mentioned chlorine wash, especially if the chlorine is not present in the final product. Even the shortest acquaintance with this subject suggests that the regulations in question are focused not so much on the imported products but on the processes by which they are made – or, in this case, how the poultry is raised. 

To our way of thinking, there are instances in which such concerns are more than appropriate. U.S. law for example forbids the importation of products made with slave labor or child labor. That’s a good thing. In general, however, efforts by governments to control the production processes of specific imports is a form of extraterritoriality that benefits no one. More to the point, if people in the UK can get away from the wrong-headed notion that somehow the imported product – U.S. chicken, for example – is inferior, this Brussels diktat respecting poultry production ought to be just the kind of burden from which the UK might wish to escape.

Other Complicating Issues.  Of course, America’s production processes for poultry are hardly the only obstacles to a U.S.-UK trade deal. The UK’s decision to allow Huawei’s participation in the building of Britain’s 5G network may loom even larger in the months ahead than it does today, especially if the U.S.-China relationship continues to deteriorate. And then there is the UK’s planned digital tax which is an anathema both to U.S. companies and to the Trump administration. 

An Upbeat Perspective . Could those (and the inevitable other) obstacles block a U.S.-UK deal? Yes. Will they? We don’t think so. Both sides see significant potential benefits to such an agreement. At the moment, both countries are – for good reason – consciously inflicting enormous harm on their respective economies. When the Covid-19 crises has passed, however, they will both be desperate for any and all measures that can help with the recovery. If a bilateral trade deal is one of those, it shouldn’t take too long to get it done.  

Chicken Today . Later America will need the added exports that an open-for-business UK market might offer. Not today, though. Chicken is flying off the shelves of American grocery stores and producers are struggling to meet domestic demand. As one Reuters reporter put it, “Chicken don’t grow any faster during a crisis.”
SOURCES & LINKS
Chicken and U.S.-UK Trade is a link to the March 10 letter to USTR Robert Lighthizer from Rep. Steve Womack and 46 other Members of Congress. This was the source for today’s featured quote.

Womack, Arkansas and Poultry takes you to a page on the website of Representative Womak with information both on poultry production in Arkansas and on the March 10 letter mentioned above.

The Signatories a link to a list of the signatories of the March 10 letter to Ambassador Lighthizer, arranged by state.

U.S. Negotiating Objectives is the document on this issue published by the Office of the U.S. Trade Representative in February 2019.

A UK Assessment takes you to the analysis of the hoped for U.S.-UK free trade agreement that was published by the UK Department for International Trade.

Flying Off the Shelves is a link to the Reuters article on chicken sales in the United States referred to Comment section above.

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