Washington Insider -- Monday

China Addresses WTO Issues

Perdue Again Pledges Help For Farmers On Trade

USDA Secretary Sonny Perdue told CNBC that President Donald Trump will not force farmers to suffer from ongoing trade battles. "The president has told me to tell [farmers] that he's not going to allow them to bear the brunt of these trade disruptions and to make a plan for mitigation unless we are unable resolve the trade issue," he said.

But when pressed for specifics about timing or how the government would help farmers, Perdue declined to comment.

Perdue reiterated that USDA is calculating the economic impacts to agriculture on a weekly basis, with USDA Chief Economist Rob Johansson in charge of that effort. However, Perdue still said he was not willing to specify what those calculations are revealing.

While the issue will potentially come more into focus should the U.S. and China move ahead July 6 with tariffs on $34 billion in goods from each other, the questions will only increase on Perdue to spell out what kind of help farmers can expect.

China Defends Its WTO Record

China's State Council Information Office published a white paper on Thursday maintaining that it has "faithfully fulfilled" the commitments made when it joined the World Trade Organization (WTO).

Beijing stressed that its WTO membership has allowed China to make a "significant contribution to promoting international trade." It highlighted recent actions to lower auto tariffs and broaden access to its financial sector. The paper also attempts to address some of the concerns raised in the U.S. Section 301 report, as the Chinese government said it is committed to strengthening rule of law.

"China will adopt a more open attitude, strengthen the protection of innovation and intellectual property rights, and enhance international exchanges and cooperation," the paper says. "These efforts will ensure that technological development and innovation benefit not only China, but also the world, and its convenience readily accessible to more and more people."

Mon. July 2 Washington Insider Farm Bill Ready for Conference

Well, there are quite a few controversies remaining regarding the bill to reauthorize the farm programs, but the draft legislation passed by the Senate Thursday is ready for a conference. In addition, the ease of passage in the Senate is seen as giving Ag Chairman Pat Roberts, R., Kan.,and ranking member Debbie Stabenow, D., Mich., momentum heading into the conference negotiations. Roberts and Stabenow had worked together during Senate debate.

Throughout the week, the two leaders worked with competing requests from senators advancing individual proposals and then joined forces to defeat an amendment that would have required stricter work requirements on some food stamp recipients than those in the House version. The proposal from Sens. John Kennedy, R., La., and Ted Cruz, R., Texas, would have expanded work requirements for able-bodied adults without dependents. It also would have required recipients to show photo ID when purchasing groceries using benefits, Politico reported.

Although the SNAP (food stamp) amendment failed, reconciling different approaches to the program promises to be the biggest challenge facing the conference committee, Politico said. The House bill would have strengthened work requirements on between 5 million and 7 million SNAP recipients — a change that led to unanimous Democratic opposition when the bill passed last week. Roberts and Stabenow were careful to avoid that issue, and both leaders said repeated during the debate that "the House SNAP proposals would never clear the 60-vote threshold in the upper chamber."

Roberts pointed to the Senate bill's administrative changes intended to combat fraud in food stamps and argued that the Senate changes to change program rules were not highlighted adequately during the debate — and were "overshadowed by the SNAP changes in the House bill," he said, a development he admitted and took responsibility for. "If you look at what we did, without the backdrop of what the House did, it is terribly significant and is right on the money of getting integrity into the program," he said. "I needed to really talk about that more to my Republican colleagues and, who knows, we could have hit 90 [votes]."

All of the Senate's 11 "no" votes came from Republicans.

Last-minute changes in the Senate bill ranged from providing new protections for pollinators to increasing funding for the milk donation program.

In addition, Senator Durbin, D., Ill., retreated from his push for a proposal reforming crop insurance on the grounds that he was satisfied with additional language bolstering rural emergency medical services. "He made the decision that he wasn't going to push on the crop insurance amendment, given other things that he cared deeply about that we were able to address," Senator Stabenow told Politico.

Sen. Marco Rubio, R., Fla., was successful in negotiating a change to Sen. Heidi Heitkamp's, D., N.D., amendment that would allow USDA funding for foreign market development programs in Cuba. After Rubio threatened to block any new amendments to the bill unless the North Dakota Democrat's amendment was struck, the language of her provision was changed to clarify that federal funds can't be spent at businesses owned by the Cuban military. Politico reported the Cuba dispute took up most of the negotiating time on Wednesday and Thursday and at one point talks were held among five senators' offices simultaneously.

Uncertainty over the Farm Bill remains as all parties prepare for conference. Politico cited USDA Secretary Sonny Perdue who told CNBC last week that the President "will not force farmers to suffer from the ongoing trade battles" and that "he has told me to tell [farmers] that he's not going to allow them to bear the brunt of these trade disruptions and to make a plan for mitigation unless we are unable resolve the trade issue." As noted elsewhere in this column, when pressed for specifics about timing or how the government would help farmers, Perdue declines to comment.

Well, the cloudy outlook for global trade policies is an ongoing concern for the ag sector, observers note, especially since trade tensions appear to be already weakening demand in at least some markets and the deadlines set by some trading partners on their pushback on administration tariffs arrive. Like most things, the details in any administration policy to offset trading partner retaliations will be extremely important if the current tensions worsen — and will be developments producers should watch closely as these disputes evolve, Washington Insider believes.

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