Washington Insider -- Tuesday

By DTN's Washington Insider

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

US, Japan Agree on 'Framework' for Trade, Investment Dialogue

Agreement on a "framework for dialogue" on trade and investment relations was announced by President Donald Trump and Japanese Prime Minister Shinzo Abe after a White House meeting.

The cross-sector dialogue will be led by Vice President Mike Pence and Japanese Finance Minister Taro Aso, Trump and Abe said at a joint press conference. Abe noted the high level of Japanese investment in the U.S., citing the auto sector, and he said Japan would like to bring its high-speed, magnetic-levitation trains to the U.S.

"Now, with the birth of the Trump administration, a new genesis will be built between Japan and U.S. in economic relations," Abe noted. "In order to put forward such a strong message, I have proposed to launch a new framework for economic dialogue, and we were able to agree on this."

From the U.S. side, Trump said trade relations between the two countries would be "free, fair and reciprocal." While Abe noted the purpose of the 12-nation Trans-Pacific Partnership (TPP) pact -- which has been abandoned by Trump -- was to create "a free and fair common set of rules" for trade, adding that for him the importance of the deal "has not changed."

TPP could serve as a template for a US-Japan bilateral trade deal, analysts told Bloomberg BNA. It includes a legal chapter establishing competition policies for state-owned enterprises and an extensive chapter — the longest in the pact — on intellectual property rights.

Abe noted trade and investment cannot be conducted in a "fair manner" when state-owned enterprises are backed by state capital and when companies get a "free ride" on intellectual property.

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NAFTA Re-Write Prospects Already Impacting Mexico Economy

President Donald Trump's threats to rewrite the North American Free Trade Agreement (NAFTA) are already impacting the Mexican economy. Mexican output growth is projected to slow to a near halt in 2017, the Wall Street Journal reported, with business investment tumbling amid long-term concern over Mexico's dependence on exports.

Exports account for a third of the country's economic activity, and some 80% of those go to the United States.

Mexico's leaders are speeding up negotiations for expanded trade deals with the European Union and opened talks with Argentina and Brazil aimed at easing the country's dependence on U.S. grain, the article added.

One possible silver lining is the decline of the peso, which has lost 16% of its value against the dollar since May. That may help the country's bid to diversity its exports while officials try to revive the investment they need to push domestic growth, the article concluded.

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Washington Insider: More Details Emerge on USDA's Animal Welfare Data

It seems the disappearance of animal welfare data from USDA's web site is a story with something for everyone. Now, the Washington Post says it thinks it all traces back to a decision the agency made several years ago to cite a Tennessee walking horse owner after the horse placed third in its class at an important show.

The USDA veterinarian present at the time found that the horse's gait was aided by "soring" which is outlawed under the federal Horse Protection Act.

The finding resulted in one of several official warnings between 2013 and 2016 that identified the horse owners as "violators" on the public USDA database. This led to litigation involving USDA, which was accused of lack of due process to those accused and violations of privacy laws.

This litigation is being hailed by some Tennessee walking horse activists as the reason the USDA data were removed its public website data. "This move is a direct result of the lawsuit," according to a post on the Facebook page of TWH Facts, which is run by a prominent advocate.

The records removal has prompted broad outcry from animal protection groups, some of which characterized it as an assault on transparency by the Trump administration. Industries regulated by the USDA, including groups representing zoos and research labs, have also been critical. So, too, have some prominent conservatives, such as Laura Ingraham.

The agency has offered little explanation for its action, except to say that it is the result of a review that began last year. However, the Post says that the recent lawsuit and interviews with former agency officials and animal protection advocates suggest that changes had partially begun several months before.

Former Agriculture Secretary Tom Vilsack told the Post that his senior staff informed him that the unit responsible for enforcing the Horse Protection and Animal Welfare acts was recommending pulling the records from the website and instead making them available via Freedom of Information Act requests in order to reduce staff time spent on the documents. Litigation was also a factor, he added, though he could not recall a specific court case.

But Vilsack did not sign off on the recommendation — not because he disagreed with it but because he believed it had major implications that he didn't have time to consider fully, he said.

Under the Trump administration, the USDA, which does not yet have a secretary, took less than three weeks to approve the removal of records that had been available for at least seven years. "I think it was probably easier to make this wholesale shutdown under the new administration," said Delcianna Winders, a fellow at Harvard University's Animal Law & Policy Program, who is familiar with the database.

Yet animal advocacy groups say access had already begun to be reduced last fall. The USDA last posted enforcement records in August, according to Eric Kleiman, a researcher at the Animal Welfare Institute who shared information about the lawsuit with The Washington Post. Other records were retroactively redacted, he said.

Some involved SNBL, a Washington state-based company that imports primates for research. In September USDA filed a complaint accusing the company of violations associated with the deaths — including by thirst and strangulation — of 38 monkeys imported from Asia. Kleiman obtained the unredacted complaint through a FOIA request, and it was published on the websites of the Seattle Times and the Animal Welfare Institute.

But in November, Kleiman noted, the USDA filed a motion to seal its own complaint. It sought to redact information about SNBL's nearly $10 million profit over two years, as well as the number of monkeys it imported and used annually — the kind of information not covered under FOIA exemptions.

Walking horse advocates see the move as a partial victory over what they depict as overreach by a federal agency that is influenced by animal rights groups. While insisting their industry wants to comply with the Horse Protection Act, some argue that a shadow is also cast by public records that name "violators" who have not had an opportunity to defend themselves.

The walking horse industry is a major target of animal-protection organizations, many of which say USDA enforcement is weak. The Obama administration sought in its final days to crack down on soring by finalizing a rule that strengthened the ban. Walking horse groups vigorously fought back, and the Trump administration has since put the rule on hold.

"This isn't an abundance of caution," Animal Welfare Institute president Cathy Liss said, using the USDA's own words for its decision last week on public records. "It is capitulation to industry — a long-standing pattern for this department."

In the meantime, USDA says the data ban may be temporary. However, this is one of the most contentious areas of USDA regulation and enforcement. Many of the animal welfare advocate groups are widely hated by producers for their secretive practices and anti-agricultural beliefs. The website issue likely is one that Secretary Vilsack was more than willing to pass along, and most likely one that is far from welcome to Secretary-nominee Sonny Perdue, Washington Insider believes.

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