Washington Insider -- Friday

Lawmakers Offer Bills for Year-Round E15 Sales

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

Lawmakers Offer Bills for Year-Round E15 Sales

Lawmakers in both the House and Senate introduced legislation to give EPA the authority to authorize sales of E15 all year, seeking to address a court decision which invalidated EPA's regulatory action to make such sales possible.

Lawmakers are seeking to build bipartisan support for the bills, and some expect it could be melded into other legislation such as infrastructure.

Reps. Angie Craig, D., Minn., and Adrian Smith, R., Neb., introduced the Year-Round Fuel Choice Act (HR 4410), and Sens. Deb Fischer, R., Neb., and Amy Klobuchar, D., Minn., have dropped in the Consumer and Fuel Retailers Choice Act.

The House bill currently has 22 co-sponsors, while the Senate measure has at least 10.

The bills would clarify EPA's authority to grant a 1-psi Reid Vapor Pressure (RVP) waivers for E15 and higher ethanol blends, permitting sales of the fuels during the summer driving months from May 1 to September 15.

Justice Requires Divestiture in Merger of Ag Equipment Component Makers

The Department of Justice (DOJ) said it will require Danfoss A/S and Eaton Corporation Plc to divest assets from the companies' orbital motor and hydraulic steering unit manufacturing businesses before their merger can proceed.

Without the divestitures, DOJ said the combination of the two firms would "substantially lessen competition in the design, manufacture, and sale of orbital motors and hydraulic steering units used in agricultural, industrial and construction equipment."

Danfoss and Eaton are the two largest makers of orbital motors used for mobile off-road equipment like skid steers, harvesting equipment, sprayers and street sweepers.

Under the terms of the proposed settlement, the parties must divest three Danfoss orbital motor and hydraulic steering unit facilities located in Hopkinsville, Kentucky; Parchim, Germany; and Wroclaw, Poland, and two orbital motor production lines and one hydraulic steering unit production line from Eaton facilities located in Shawnee, Oklahoma, and Eden Prairie, Minnesota, to Interpump Group or an alternate firm approved by the U.S.

Washington Insider: The WTO and Fisheries

The World Trade Organization (WTO) has seen little activity in terms of progressing on key issues, but the areas of fisheries subsidies may now be one of the areas where an agreement could be at hand. The world trade body has been beset by a lack of agreement on a host of issues over the past several years it seems, with agricultural issues and the matter of the Appellate Body also seeing no unity among members. On the latter, the U.S. has blocked the naming of new members to the Appellate Body, keeping it from being able to hear any appeals on WTO dispute settlement body decisions. The Trump administration started the block, which brought the Appellate Body to a screeching halt in December when the terms of members of the appeals group expired. And while there were hopes around the globe that with the Biden administration now in place, the U.S. might be willing to go along with a compromise plan that has been backed by some 120 members of the WTO. But so far, U.S. Trade Representative Katherine Tai has not lifted the U.S. block. She has said that reforms to the Appellate Body are indeed needed. The Trump block emerged on the contention that appeals body members were making law and not just deciding cases on their own merits. So far, the U.S. has not said that was a wrong stance to take. Some of the optimism for progress on that and other topics at the WTO came earlier this year when a new chief of the WTO was chosen in the form of Director-General Ngozi Okonjo-Iweala of Nigeria. That was one change the U.S. eventually backed. The Trump administration did not support her to lead the WTO, but the Biden team shifted gears and threw their support behind her, making her the first woman and the first woman of color to lead the WTO. As she took to the helm of the trade body, she expressed hope that an agreement on fisheries subsidies could be reached ahead of the upcoming ministerial meeting of the WTO in November. Governments provide approximately $35 billion in fisheries subsidies annually, with the vast majority going to large-scale, industrial fishing fleets, according to a piece in the Washington Post penned by Kristen Hopewell, an associate professor in the School of Public Policy and Global Affairs at the University of British Columbia. "Countries that have depleted their own fish stocks are using these subsidies to allow their fleets to travel vast distances to exploit fisheries resources in distant waters," Hopewell said. "By some estimates, more than half of all fishing activity in the high seas would not exist without subsidies." Fisheries subsidies have long been a contentious issue, one that has not come to a solution in years despite repeated tries at ironing out the differences on the issues. While Okonjo-Iweala made it a priority when she took over in April, just this week she expressed disappointment at the lack of progress and even openly stated that maybe an agreement by the November ministerial would not be possible. Perhaps that somber tone was enough to shift the dynamic on the issue as trade ministers suddenly Thursday blessed a negotiating text on curbing fisheries subsidies, a move that will now allow negotiators to move to "line-by-line" text-based talks. "Today we were looking for political guidance, political support, to move forward. And for the first time in 20 years, we have a text that has been agreed and blessed by all the ministers and heads of delegations," Okonjo-Iweala told reporters following conclusion of a ministerial meeting Thursday. "We couldn't have wished for a better outcome, let me put it that way, because it means that we can now move to the next steps." While USTR Tai said the text will serve as the basis for a member-led, text-based negotiation, the U.S. still believes that the text "does not yet contain the elements required for reaching conclusion." The steps now are for negotiations with the revised text serving as the basis for getting an agreement. Okonjo-Iweala said the line-by-line process would not have been able to be reached had it not been for those on the political side to get on board with the draft text. "What is new is that we're going to move into this line-by-line negotiations," she said. "And that's the ultimate. Because it wasn't clear that we had the political direction to be able to use this 30th of June text to proceed. And you can only have this line by line when you have a text that everybody agrees is a basis. So, that's what we got today." There certainly is hope now that the WTO can get an agreement on one of the most contentious issues on trade. But even as there is hope, there is also a realism that this is just largely an agreement now to get down to the hard negotiations. So we will see. There is optimism, but in any negotiations, the hardest part are the final details. So this is a situation that needs to be watched closely as it could signal the world trade body is potentially able to break out of a funk of a lack of progress on several fronts, and if it does, that could have countries potentially next eyeing agriculture, yet another one of the thorniest topics for the world trade body, Washington Insider believes.

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN's Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the US Ag Policy, US Farm Bill and DTN Ag News sections on their News Homepage.

If you have questions for DTN Washington Insider, please email edit@dtn.com