Washington Insider- Monday

Raising Optimism on Trade and the Trump Administration

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

WOTUS Challenge May Need to Reach Supreme Court: Judge

Plaintiffs challenging the Environmental Protection Agency's waters of the US (WOTUS) rule appear to be arguing "the same case in a different jurisdiction" by bringing an appeal in the US Court of Appeals for the Tenth Circuit, a judge on the panel said, suggesting the issue may ultimately have to be resolved by the Supreme Court.

The plaintiffs originally filed the case in the U.S. District Court for the District of Northern Oklahoma. However, they may have to wait for the U.S. Supreme Court to decide whether to take up a ruling by the U.S. Court of Appeals for the Sixth Circuit that established itself as the appropriate venue to hear the nearly two dozen consolidated challenges to the rule, said Tenth Circuit Judge Nancy Moritz.

"If they are going to accept the case, we are going to hear about that in the next couple of months," said Moritz, a member of the three-judge panel that heard oral arguments in Denver on Nov. 17. If they accept the case, "it is going to resolve the issue of whether this case belongs in the district court or the circuit court," she noted.

Plaintiffs in the two consolidated Tenth Circuit cases include the Chamber of Commerce and the National Federation of Independent Business (NFIB). They appealed a district court's decision to dismiss their challenge of the WOTUS rule without considering the merits of their claims.

In dismissing the case, the district court relied upon a fractured Sixth Circuit decision finding that the courts of appeals have exclusive jurisdiction because the WOTUS rule has an "effluent limitation or other limitation" under Section 1369 of the Clean Water Act.

The question before the court in this case is whether the Tenth Circuit is entitled to say that the Sixth Circuit made an error on the jurisdictional issue. Michael Park of Consovoy, McCarthy & Park in New York, attorney for the Chamber of Commerce, said the Tenth Circuit does not need to wait for the Supreme Court to weigh in.

"Respectfully, if this circuit takes its jurisdictional authority seriously, it shouldn't wait," he argued. "It can issue a ruling, and create a split, which would make the case more ripe for Supreme Court review."

House Passes Legislation to Curb 'Midnight Regulations'

A bill to curb all regulations issued in the final months of a president's term, often called midnight regulations, passed the House November 17 by a vote of 240-179, after all amendments offered by Democrats were defeated.

The Midnight Rules Relief Act (HR 5982) was sponsored by Rep. Darrell Issa, R-Calif. It would amend the Congressional Review Act (CRA) to allow Congress to disapprove multiple regulations en bloc that had been issued in the last 60 legislative days of the final year of a president's term.

Given the number of legislative days in the current Congress, all regulations finalized since May would be subject to disapproval.

"On Election Day, the American people delivered a resounding message to Washington: Do not continue the Obama administration's policies; stop the regulatory, big-government onslaught that has been killing our jobs, strangling recovery and suffocating our futures," said House Judiciary Committee Chairman Bob Goodlatte, R-Va. "Passage of this bill is the way to say immediately we have heard you loud and clear."

The White House already said President Barack Obama would veto the bill if it were presented to him. Further, with few days remaining in the legislative session, the bill is unlikely to advance in the Senate.

Washington Insider: Raising Optimism on Trade and Trump

Well, you never know. One of the campaign verities has been Candidate Donald Trump's solid opposition to current trade deals. They were a bedrock villain in his outreach to "rust belt" supporters, in spite of the fact that the Democratic candidate also opposed trade deals.

Now, even before the inauguration, Bloomberg is reporting that Senate Finance Committee Chairman Orrin Hatch, R-Utah, is saying that the president-elect is "softening" his views on trade and urging pro-trade lawmakers to work harder to "make a case for trade."

Hatch told Bloomberg that he is basing his assessment on a recent conversation he had with the president-elect. And he told the U.S. Global Leadership Coalition in Salt Lake City that he will work in an effort to see that Trump "softens a lot more." Hatch's role in the success of past trade deals is sufficiently solid that his comments attracted significant attention, especially in ag circles. Whether it leads to progress on actual legislation remains to be seen.

Trump often said during the campaign that he wants to renegotiate the 1994 North American Free Trade Agreement with Canada and Mexico, abandon the pending 12-nation Trans-Pacific Partnership and take a tough stance on trade relations with China. Hatch said he understands the president-elect's desire to hold U.S. trading partners accountable, but added "there are definitely better ways to do that than some of the ideas that have been put forward so far."

Hatch said he thinks that the election provides an opportunity to convince the critics that US economic and security interests are closely tied to the ability to open markets.

"We have some work to do to make that case, including, it seems, with the incoming administration," Hatch said.

Of course, Hatch's comments are good news for agriculture, even though it still seems likely that he will have an uphill fight. Nowadays, the idea that "trade costs jobs" has deep roots in spite of the fact that it also seems well established that most "job impacts" have come from technology, not trade; and that the manufacturing industry, for example, that rust belt politicians have often pronounced dead is not only alive, but growing. However, it is doing so with many fewer workers.

In fact, the trade debate was never really focused on agriculture, even though ag imports are large and sugar and dairy and a few other ag sectors do work hard to limit impacts of imports on them. For the most part, though, agriculture has worked to grow markets for its soybeans, corn, meats and numerous other commodities and would like to see those trends continue.

In addition, many ag industry groups seem never to have fully believed that any administration would deliberately undercut such important markets for US products as those overseas, especially in developing countries—or, that the important trade development work being done by commodity groups and USDA overseas would be abandoned.

Still, the threats of sharply higher tariffs or other restrictive interventions were and are worrying for ag advocates and suggest higher tensions across the future Trump administration. Many of those remain as the president-elect continues to discuss the prospect of immediate discussions with major ag markets, both in Mexico and Asia.

However, Sen. Hatch is well respected and well connected to U.S. trade sponsors and to Republican politicians. His view that the current political dynamics provide an opportunity is not one that has been heard in Washington for some time and is certainly one that producers should watch as the transition and future political debates proceed, Washington Insider believes.

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