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.

Work Continues On Several Fronts Re: Section 199A Tax Issue

Work is continuing in Washington to address the potential impact to U.S. grain marketing that could arise from the Section 199A provision in the U.S. tax code, with representatives of the U.S. grain industry, farm-state lawmakers and more working to find a solution that will address concerns the provision could impact farmer grain marketing decisions.

The National Council of Farmer Cooperatives (NCFC) and National Grain and Feed Association (NGFA) issued a joint statement on the situation, pointing out the "aim of the Tax Cuts and Jobs Act was to spur economic growth across the entire American economy, including in the agricultural sector. While the goal was to preserve benefits in Section 199A for cooperatives and their patrons, the unintended consequences of the current language disadvantage the independent operators in the same industry."

The U.S. tax code "should not pick winners and losers in the marketplace," the statement said. "We applaud Congress for acknowledging and moving to correct the disparity, and our expectation is that a solution is forthcoming. USDA stands ready to assist in any way necessary."

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Vietnam Launches WTO Complaint over US Antidumping Duties on Fish

A World Trade Organization (WTO) complaint over U.S. antidumping laws, regulations, administrative procedures, practices and methodologies and certain antidumping determinations in administrative reviews on Vietnamese fish fillets was filed by Vietnam today (January 12), according to a document circulated to other WTO members.

Vietnam is contesting the imposition of antidumping duties and cash deposit requirements following four administrative reviews and determinations made by the Department of Commerce in the late 2000s and early 2010s.

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Washington Insider: Lobbying Ramps Up

Bloomberg is reporting this week that there are lots of looming deadlines and not much movement in negotiations. For example, it said that the immigration talks are at a standstill. It also notes that farm bill lobbying has intensified.

The talks on a potential immigration deal appear to have collapsed dramatically, pushing both sides to harden their positions, Bloomberg says. This raises the risks that the standoff will sink talks aimed at averting a government shutdown at the end of next week.

Right now, the immigration talks have descended into very personal territory after a blowup in a White House meeting with lawmakers. “My thought that we might get a bipartisan agreement approved by the White House died yesterday,” Sen. Dick Durbin, D., Ill., told reporters. He added that “the clock is ticking” toward a shutdown in seven days.

The current government spending authorization expires on Jan. 19. Although Republicans control Congress, their thin margin in the Senate means Democratic votes will be needed for any stopgap funding measure or for a broader budget agreement. Already, Congress has had to pass three short-term extensions of spending authority to buy time to agree on funding priorities for the fiscal year that began Oct. 1.

The recent dust-up over immigration creates a complicated mix for lawmakers, who have only four days of work this week after Monday’s Martin Luther King holiday. A Senate Democratic leadership aide told Bloomberg that Democrats gave significant ground in the proposal they presented and that it’s up to the administration to take the next step to bring both sides together before the shutdown deadline.

A Senate Republican leadership aide said GOP leaders have been clear that the spending fight and an immigration bill should be separate, and expressed confidence that both parties will ultimately agree to keep the government running.

And, to almost no one’s surprise, it appears that producers and sellers of food have moved quickly to plant seeds for a busy lobbying season on the farm bill, one of Congress’ top legislative priorities for 2018. Lobbying on food aid, crop insurance and other issues covered by the bill increased 62% year-over-year in the third quarter of 2017, ahead of a Sept. 30 deadline for several key programs and possible floor action early this year, Bloomberg said.

The beginning of a busy lobbying year for ag is not surprising, but the number of lobbyists was surprising for some. Bloomberg said that more than 350 lobbying filings listed “farm bill” in the reporting period from July 1 through Sept. 30, a sharp increase from the previous quarter. Food retailers and the food producers have been the leading industries lobbying on the food-stamp, or SNAP, program, as well as on a large number of other ag related activities.

Also, in the midst of the current immigration and spending fights, USDA announced last week that “Mexico can now export pork to the U.S. after being deemed free of classical swine fever. While you might think that this report will raise concerns among pork producers already worried about losing at least some market access as a result of the current NAFTA talks, that doesn’t seem to be the case.

“Mexico has proved that it can control classical swine fever, and that imports into the U.S. pose negligible risks,” Dave Warner, communications director at the National Pork Producers Council told Bloomberg.

Classical swine fever is a highly contagious viral disease that was eradicated from the U.S. in the late 1970s. Mexico in late 2007 requested market access to the U.S. for pork from the eight states in its central region but later amended that request to include all Mexican states.

Warner said that through November last year, the U.S. shipped $1.4 billion of pork to Mexico. He added that NPPC is supportive of using science and risk analyses to determine whether trade can be safely conducted.

NPPC President Ken Maschhoff said lifting the restriction on Mexican pork imports will help maintain “our good relationship with that country.”

So, we will see. The meltdown in immigration talks is certainly not good news because it inserts much greater uncertainty into economic and trade prospects at a time when uncertainties are already high. Certainly, those fights should be watched closely by producers as they evolve, Washington Insider believes.

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(GH/BAS)

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