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Horses, Asses, Mules and Hinnies Atop the Tariff Schedule

Unless you’re a farmer or animal breeder, the first item in Chapter 1 of the Harmonized Tariff Schedule is one we may think about the least – Live Animals. For most Americans, live animals are a long supply chain away from the supermarket.

At over $21 billion in 2017, global trade in live animals has increased 140 percent over the last two decades. Some 45 million hogs, 16 million sheep, 11 million head of cattle, 5 million goats and 1.9 million poultry (mainly chickens) were transported around the globe, some for breeding and about 80 percent intended for consumption.

A specialized segment within the transportation sector is dedicated to transporting live animals by air, land and sea – from air cargo, tractor trailers and trains, to ocean container shipping.

HTS snippet 0101

Shifting Resource Burdens

The world will be home to 9.7 billion people by 2050. With more mouths to feed, agriculture production must become more efficient against the challenges of limited arable land, energy and water resources, especially in developing countries. International development agencies promote raising livestock as a way to increase income for smallholder farmers (owners can sell products and/or offspring) and to achieve greater food security in rural areas through access to high quality proteins. Importing livestock in the last few months of their life can reduce expenses associated with animal feed and veterinary care while conserving limited water resources.

The water-stressed Middle East region has become a major importer of live animals. Demand for meat and dairy products has grown steeply in Egypt, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar and Saudi Arabia. Importing mature live animals avoids the need to rear animals from birth, shifting the water burden while meeting demand for animals freshly slaughtered in adherence to religious requirements.

Trade in live animals 3x increase

Trade in Genetics, No Goats No Glory

Countries are investing in improving their livestock by either importing live animals or importing frozen semen and embryos for artificial insemination, a process that is achieving higher success rates as costs are coming down. Global trade in purebred animals for breeding in 2017 was a $780 million industry. The animal genetic market is projected to grow from $4.2 billion in 2018 to $5.8 billion by 2023.

In November last year, 1,503 U.S.-origin Holstein heifers valued at $3 million were sold out of Statesville, North Carolina and shipped to Egypt aboard a livestock carrier in an effort by the Government of Egypt to improve the country’s dairy operations supporting output of milk for yogurt and cheese. Qatar is importing American-born dairy cows to surmount trade bans by neighboring countries.

Chickens are by far the largest category of live animals traded globally with hogs coming in second. But it’s dairy goats that could prove key to achieving the United Nations’ 2030 Agenda for Sustainable Development. Goats consume fewer resource inputs than cows, goat milk is nutritious, and women often have strong roles in dairy goat ownership and management.

Caprikorn Farms is the oldest goat dairy in Maryland. Raising some of the best dairy goats in the United States and the world, their genetics are in demand. They have worked with Russian authorities to not only send several live animal shipments to Russia but also improve Russia’s health protocol for international shipment. Ten of their goats even flew to Qatar on a private jet.

Bees also get in on the global trade act. Not only do bees circulate throughout the United States to pollinate our many crops, $48.1 million worth of live bees – including Queen bees and semen — were exported globally in 2018. Europe shipped $26.5 million or 55.2 percent of the global total.

Live animal trade routes 2017

Protecting Livestock on the Journey

While North American cattle and hogs have a short truck ride or may even live on ranches along the borders, many animals face a long ocean journey during which their health can be compromised. They are sometimes relegated to older vessels that may be converted from general cargo and not purpose-built to transport the animals in safe conditions. Often on journeys for weeks at a time, animals are at risk for fatigue, heat stress, overcrowding, injury and the spread of disease in close quarters.

The World Organization for Animal Health (OIE) issued the Terrestrial Animal Health Code in 2019 that provides standards for transporting animals by land, sea and air to protect the health and welfare of the animals and prevent the transfer of pathogens via international trade in animals.

As the global population increases and agricultural producers seek to maximize the resources available to them while improving output, global trade in live animals is likely to continue to grow. Standards and cooperation in international trade practices will need to evolve along with that trend.

Contributor Sarah Smiley lives on her family farm in Appalachia where they have raised fainting (myotonic) goats and Charolais cattle for more than 20 years.


Sarah Smiley is a strategic communications and policy expert with over 20 years in international trade and government affairs, working in the U.S. Government, private sector and international organizations.

This article originally appeared on Republished with permission.


From A to QI: The Global Rise of Traditional Chinese Medicine

Find Your Qi

Maintaining balanced Qi (many of us know it as “chi”) – the body’s vital energy level — is a bedrock of Traditional Chinese Medicine (TCM). To help your Qi flow, TCM offers herbal supplements and treatments like acupuncture and cupping.

Strongly promoted by the Chinese government, TCM has become a global industry and an economic driver for China. The sector grossed $130 billion in 2016. According to World Finance, China exported $526 million worth of TCM to the United States alone, making up 15 percent of China’s TCM exports in 2016, while China’s overall TCM exports grew 54 percent between 2016 and 2017.

Recalling the ancient spice routes, TCM is sprouting up as a traded item all along China’s modern Belt and Road routes. The Belt and Road initiative set a goal to register 100 TCM products and establish 30 TCM centers in Belt and Road countries by 2020.

Taking Root but Germinating Concerns

Meeting a goal of Chinese President Xi, TCM got a big boost in legitimacy in 2019 when the World Health Organization (WHO) included TCM for the first time in its global compendium of health conditions and treatments.

But many in the medical field have expressed concern over the move. TCM treatments may lack rigorous scientific study. Testing has revealed the presence of heavy metals, pesticides and toxins in plants grown and harvested in China, and standardization of natural ingredients is not well regulated.

Stats on Traditional Chinese Medicine

Chinese Ginseng in Wisconsin?

In part to remedy quality concerns, China’s TCM producers are partnering to establishing growing sites overseas. They include operations in Wisconsin, which produces over 90 percent of total U.S. cultivated ginseng. Global ginseng production is between 4.5 million and 5.9 million kilos per year. The United States produces roughly half a million kilos. Last year, U.S. ginseng exports were valued at about $30 million, with China the biggest buyer, though ginseng shipments were significantly dampened by 25 percent tariffs applied by China as part of the ongoing trade war.

As ginseng’s health benefits have become popularized in the United States, import demand for Asian ginseng has increased in recent years. The Asian variety is considered “hot,” versus American ginseng which has a “cooling” effect on the body, so trade may flow in accordance with the flow of consumers’ Qi.

Beyond ginseng, more small farms around the United States are producing a variety of Chinese herbs both for export and domestic use in response to concerns with the age and potency of imports, possible contamination, and over-harvesting of wild herbs in China.

The Side Effects of TCM

Africa has become the largest regional TCM export market for China. In 2015, Chinese researcher Tu Youyou won the Nobel Prize for Medicine for discovering the antimalarial properties of the Asian plant Artemisia annua. That validation increased confidence in the use of TCM, particularly in countries that suffer shortages of biomedical healthcare practitioners and in remote, rural areas that lack access to healthcare facilities. But many in the healthcare sector worry that the limitations or risks of TCM are not well understood and that patients turning to TCM may be less likely to seek proven treatments, causing a worsening of their conditions. Quality control and counterfeit medicines prevalent in Africa are also serious concerns.

WHO listing of TCM text

Another side effect is increased demand for African wildlife, already a serious problem. The plight of endangered species such as pangolins are well known, but common farm animals such as donkeys are now in high demand as well. Sought after for gelatin, TCM has driven demand to over four million donkeys per year and growing. Donkeys are being poached from small farmers and landowners and smuggled to such an extent that illegal donkey trade is being compared in severity to rhino poaching.

TCM is also spawning an increase in crocodile farming in Kenya, Zambia, Zimbabwe and South Africa. Eighty-five percent of African crocodile exports go to China, Hong Kong and Taiwan, which gives rise to yet another major concern. TCM can include the practice of eating of exotic wild animals. Wild animals can carry diseases transmitted to humans, as was the case with the SARS outbreak in 2002, traced to consumption of wild civet cat. Exotic species available in a wet market in China may also be the origin of the current strain of Coronavirus affecting thousands. Out of caution, China recently announced a temporary ban on wild animal trade.

Deep Trade Roots

It could be that the U.S.-China trade relationship is founded on traditional Chinese medicine. In February 1784, a cargo ship named Empress of China set sail for China loaded with nearly 30 tons of American ginseng. The profits from that trade prompted a congressional resolution encouraging further trade with China. President George Washington is said to have had Daniel Boone search forests for ginseng in an effort to help fund the fledgling U.S. government through trade with China.

Such is the storied history of TCM. But as TCM is traded globally in the modern age, the industry will need to find its own Qi for a balanced approach to quality, safety, and the sustainability of precious resources.


Sarah Smiley

Sarah Smiley is a strategic communications and policy expert with over 20 years in international trade and government affairs, working in the U.S. Government, private sector and international organizations.

This article originally appeared on Republished with permission.


A Grand Gesture

As evidence that Valentine’s Day is here, roses are everywhere – grocery and drug stores, gas stations, and sidewalk vendors offering a bunch for the last-minute Romeo. Until the late 1980s, most roses sold in the United States came from California. A dozen roses would have set you back around $150, which is why the tradition was a grand gesture and a symbol of the seriousness of your relationship. Not really so much today – a dozen roses can be purchased for less than $20.

Why are roses so affordable? The explanation is years of U.S. Government trade, development, and drug eradication policies designed to move South American growers away from cultivating the coca plant used to make cocaine, by substituting commercially profitable production of cut flowers.

Flower Power

Americans will give each other 200 million roses over the Valentine season. The majority were grown in Colombia. Over the course of a year, Colombia exports around 4 billion roses to the United States and supplies 60 percent of U.S. imports of fresh cut flowers overall. Production and shipping are so efficient and cost-effective that roses from Colombia can reach the U.S. East Coast ahead of a similar shipment from California.

The competition from South American suppliers, particularly Colombia, has caused California production to plummet by 95 percent since 1991. The year 1991 is significant. It was the year Congress passed the Andean Trade Preference Act (ATPA, later expanded and renamed the Andean Trade Promotion and Drug Eradication Act).

ATPA represented a tool in the U.S. policy toolkit to disrupt the drug trade and cartels in Bolivia, Colombia, Ecuador and Peru, and slow the flow of drugs into the United States. Reducing or eliminating tariffs on imports from the region was intended to incentivize farmers to replace illicit coca production with legitimate (and safer) alternatives.

Thorny Issues

The reduction in tariffs gave Colombian growers a boost, but the seeds to grow the Latin American rose industry were really planted back in the 1960s under President Kennedy through economic development programs implemented by the U.S. Agency for International Development (USAID) to combat the spread of Communism in Latin America. Over decades, U.S. funding supported the infrastructure critical to developing an industry that could offer employment, education and empowerment to hundreds of thousands – predominantly female – workers.

The program’s successes came at the expense of U.S. growers. The U.S. florist industry petitioned for a series of anti-dumping investigations that resulted in negligible penalties on importers, and little tangible relief for U.S. industry. As imports grew, the number of U.S. rose farms dwindled from several hundred to fewer than 20 large-scale rose producers today.

Not Everything is Coming Up Roses

The savanna near Bogotá, Colombia’s capital city, is ideal for flower cultivation. It sits 8,700 feet above sea level about 320 miles north of the equator and possess clay-rich soil. Since the 2016 peace accords between the Colombian government and the Revolutionary Armed Forces of Colombia (FARC) rebels, many of the coca farms in this area have been replaced with flower production.

But Colombia’s blessings are also a curse. FARC offshoots and other guerrilla groups have been able to move coca production from central highlands to the country’s coastal deltas and frontier areas where it is thriving.

Aerial fumigation to wipe out coca plots was discontinued due to concerns about the effects on human health and damage to local soil and water systems. As well, crop substitution programs have lapsed, leaving a lack of economic alternatives for poor communities where cocaine traffickers have moved in ( though the government has announced plans to replace around 50,000 hectares of illegal crops with the growing of cacao and fruit trees).

As a result, coca production is on the rise. With somewhere between 150,000 and 180,000 hectares of coca under cultivation, according to United Nations and U.S. estimates, Colombia produced its largest crop of coca in 2016 in nearly two decades.

A Rose by Any Other Name

Trade preference programs played some role in helping to provide a safer livelihood for hundreds of thousands of South Americans while making roses accessible to most everyone and for all occasions. Walmart buys so many roses that its purchases are actively monitored by the industry as an economic indicator.

Back in California, the remaining growers still produce around 30 million roses each year. Rather than cultivate mass-produced roses (the red, long stemmed, no scent, durable variety), these growers are working with universities and research centers to create new and specialty cut rose varieties to serve niche segments of the markets such as weddings and other high-end celebrations.

More reading: Archived reports by the Office of the U.S. Trade Representative on the operation and impact of the Andean Trade Preferences Act can be accessed here.

Sarah Smiley

Sarah Smiley is a strategic communications and policy expert with over 20 years in international trade and government affairs, working in the U.S. Government, private sector and international organizations.

This article originally appeared on Republished with permission.