For more than 20 years NCA has advocated for free trade. The U.S. currently has free trade agreements with 20 nations, which open markets through the elimination of tariff and non-tariff barriers. These agreements allow for U.S. exports from both large and small confectionery companies and allow them to compete globally. With 95 percent of the world's consumers living outside of the United States, it is critical for NCA's members to reach those consumers in order to grow and create jobs.
NCA is currently actively lobbying on behalf of its members on several trade policies, with a heavy focus on Trade Promotion Authority, the Trans-Pacific Partnership, Country-of-Origin-Labeling and the Trans-Atlantic Trade and Investment Partnership.
Trade Promotion Authority is a partnership between Congress and the president that facilitates the shaping, development and approval of trade agreements and ensures Congress’ influence and input in all agreements. Last renewed in 2002, it recently expired in 2007. Every U.S. president since Franklin Roosevelt has had this authority while negotiating trade agreements, and it is critical that TPA is again approved by Congress this year. NCA supports the swift passage of the Trade Promotion Authority through Congress this spring.
The Trans-Pacific Partnership is being heralded as the largest free-trade agreement in history. Currently being negotiated between the U.S. and 11 different nations--Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam--this region represents some of the world’s most robust economies and more than 40 percent of the world’s trade. Congress and the Administration hopes to complete negotiations on TPP in spring 2014.
According to the Office of the United States Trade Representative, “U.S. goods exports to the broader Asia-Pacific totaled $942 billion in 2012, representing 61 percent of total U.S. goods exports. U.S. exports of agricultural products to the region totaled $106 billion in 2012, 75 percent of total U.S. agricultural exports.” Additionally, the U.S. confectionery industry currently exports more than $1.42 billion worth of product to the TPP region.
The U.S. confectionery industry will benefit from the TPP if it accomplishes the following goals:
In 2009, the U.S. passed legislation requiring country-of-origin labeling on meat and meat products to better inform consumers of the supply chain origins. In 2011 Canada and Mexico brought a dispute before the World Trade Organization against U.S. COOL requirements. The WTO twice found that COOL violated U.S. international trade obligations because the labeling requirements treated imported Canadian and Mexican livestock less favorably than American livestock. In May of 2013 the U.S. implemented new regulations in an effort to comply with WTO obligations; Canada and Mexico contend the new requirements are now even more onerous than before.
The WTO is expected to form a panel in early 2014 to determine whether current U.S. measures are WTO-compliant. Retaliatory tariffs are expected to be implemented in early 2015, only if the WTO (a) finds the U.S. is not in compliance, and (b) authorizes Canada to retaliate.
Possible impact of retaliation on U.S. chocolate and confectionery industries:
In June 2013 Canada published its proposed retaliation list; to date, Mexico has not published a proposed list. The following chocolate products and materials are included on Canada’s proposed retaliation list—boxed and bite-size chocolates, bulk chocolate, sweet biscuits and wafers.
If Canada retaliates against the United States in the country-of-origin labeling dispute, a 100 percent surtax on U.S.-origin chocolate and confectionery goods exported to Canada will be enacted. Canada is the U.S. confectionery industry’s top export market with more than 65 percent of all Canadian chocolate imports coming from the United States. If Canada retaliates, more than $663 million of U.S. exports of chocolate and confectionery goods to Canada may cease.
NCA and its members support a final resolution of the ongoing COOL dispute so that the United States fully complies with WTO commitments and Canada does not implement retaliatory actions against U.S. imports.
The Trans-Atlantic Trade and Investment Partnership is a comprehensive and ambitious agreement between the United States and the European Union. As the U.S.’s largest trading partner, the goal of the Trans-Atlantic Trade and Investment Partnership is to create and add more than 13 million American and European jobs. Together, the United States and European Union already account for more than half of world’s economic output with each producing more than $16 trillion in GDP.
NCA hopes to have an agreement that will boost economic and job growth globally for confectionery companies. Because many NCA companies sell their products in both the U.S. and E.U., they suffer from high costs due to varying regulatory standards. A comprehensive and successful TTIP will allow for standard regulations on both sides of the Atlantic on all confectionery goods.