Key Trade Agreements for Agricultural Products in the United States, China, and the United Kingdom

Trade agreement regulations provide governments with various tools—including sanitary and phytosanitary (SPS) and technical barriers to trade (TBT) measures. The main goal of regulation is to ensure product quality and prevent deceptive practices. Trade agreements are meant to further establish and ensure a stable supply of food and various goods for importing countries and increase economic ties between trading countries.

UK Trade Agreements

Since BREXIT, EU trade agreements are no longer valid in the UK. The first couple of years has focused on maintaining existing trade agreements. Furthermore, negotiations have started with the US, Australia, and New Zealand. Also, efforts are still being made to encourage trade with EU countries and access to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The UK and Australia signed a free trade agreement (FTA) in December 2021. This followed an Agreement in Principle in June 2021, where most of the deal had been agreed upon. The most significant changes to the UK and Australia agreement concern wine, meat, and dairy products, while the changes related to plant products are minimal and concern organic products. From January 1st, 2021, a Great Britain Certificate of Inspection (CoI) will be required for entry into Great Britain. For tariff-rate quotas, as of January 1st, 2021, the UK and EU 'split' existing agricultural WTO tariff-rate quotas (TRQs) between the UK and EU-27 for beef, buffalo, sheep and goat meat, cheese, sugar, and rice.

Although currently there are no trade agreements between the UK and India, India is expanding the signing of new trade agreements to reduce barriers, eliminate tariffs, and obtain preferential access to global markets. Negotiations with India started on January 17, 2022.

UK has an existing trade agreement with Canada, which replicates what Canada has with the EU. Negotiations for a new UK-Canada trade agreement were launched in March 2022. Other trade agreements underway are with Mexico (launched on May 22) and Gulf Co-operation Council (GCC), which started on June 22.

US Trade Agreements

As part of the Phase One agreement signed by the US and China in January 2020, China was obliged to purchase an additional USD 200B of US goods and services (agriculture, energy, and manufactured goods), as predicted in advance by the end of the agreement in 2022. According to the Peterson Institute for International Economics, in 2021, China's only sector fulfilled almost entirely was agriculture, with nearly 92% of the target of USD 27.5B.

On January 22, US revitalized trade with India regarding pork and pork by-products. The following month, on February 22, the US concluded a principle agreement with Japan on a revised beef safeguard mechanism under the US-Japan Trade agreement to meet Japan’s growing demand for US beef. The Biden administration’s trade policy agenda differs from the previous one in shifting focus away from tariff reduction and traditional trade tools to issues of workers and environment among trade partners, addressing sanitary and phytosanitary barriers to create a more sustainable trade environment.

As of May 22, the Biden administration announced Indo-Pacific Economic Framework or IPEF, which includes non-tariff-related measures to improve supply chains, trade technologies, environment, and labor standards. Countries that are included are Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Vietnam incorporating around 40% of the global economy. Combined, these countries represent 25% of US ag-exports, while it is expected to increase US exports of livestock, dairy, and grains volumes due to the removal of non-tariff measures.

China Trade Agreements

The Regional Comprehensive Economic Partnership (RCEP) was enacted in China on January 1, 2022. RCEP covers about one-third of the world’s population, with 15 Asia-Pacific countries- China, Japan, South Korea, New Zealand, Australia, and the 10 ASEAN member states – entered into force at the start of 2022. The agreement aims to remove tariffs on at least 90% of the goods traded among member countries. Of particular note is the free trade agreement with Japan, the first in history between the two countries. In the first quarter of 2022, China imported USD 6.79B worth of agricultural products from ASEAN countries, an increase of 14.1% YoY.

As of May 22, China and Brazil have agreed on the trade of corn, soybean meal, and peanuts, among other agricultural products needed for deeper agrarian processing. China General Administration of Customs (GAC) and the Brazilian Ministry of Agriculture signed the Protocol on SPS measures for exporting Brazilian corn to China. China used to import corn mainly from the US and Ukraine, with Brazil accounting for a small share for use as seeds.

China, the US, and the UK are considerable importers of agricultural goods. Global supply chain disruptions caused by COVID-19, the Russia-Ukraine war, and weather anomalies, including- droughts, floods, and other extreme weather events, have pushed for changes on the trade map.