Washington Insider -- Wednesday

By DTN's Washington Insider

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

Europe's Geographical Indicators Remain a Contentious Issue in TTIP Talks

The European Union's insistence on protecting place names attached to food products as intellectual property continues to draw fire from U.S. members of Congress. Last week, a bipartisan group of nearly 180 House members wrote to Agriculture Secretary Tom Vilsack and U.S. Trade Representative Michael Froman, urging the administration officials to oppose the inclusion of "geographical indicators" for common food names in the Transatlantic Trade and Investment Partnership (TTIP) that the two sides currently are negotiating.

Under the EU's GI regulations, place names that are connected with a particular food item are treated as if they were copyrighted names. Examples include Parmesan cheese, Champaign and Cognac. In the United States, a number of GIs are seen as generic products, such as bologna and cheddar cheese. Trade officials on both sides of the Atlantic have acknowledged that GIs will play a large role in the talks, with EU officials saying this is a key issue for them.

TTIP negotiators currently are meeting in Washington for the latest round of TTIP talks. Unless they find common ground on GIs, the overall agreement could be held up well beyond the target date for completion of this year or next.

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BNSF, Canadian Pacific Say Freight Backlog Being Slowly Whittled Away

Two major railroads that serve the Upper Midwest and Canadian Prairies say they are making headway in cutting cargo backlogs that are making it tough for farmers needing more fertilizer on hand. The growing season already has been shortened by later-than-normal spring temperatures in cold-weather states such as Minnesota, North Dakota and South Dakota.

BNSF Railway and Canadian Pacific Railway officials this week told regulators at the U.S. Surface Transportation Board they were making progress in recent weeks, since a prolonged winter sharply reduced train lengths and caused delays for many cargo categories. The STB has been requiring both railroads, which dominate long-haul service in that region, to submit weekly service update reports after hearing complaints from customer groups and lawmakers.

BNSF, the larger of the two carriers, told the STB last Friday that it has hauled 48 trainloads of fertilizer into the region in the last six weeks, putting it in striking distance of its pledge to deliver 52 trainloads. CP officials its shipment times for fertilizer shipments to the Midwest had accelerated by 50% from the prior three weeks.

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Washington Insider: What's Really Happening to North American Ag Trade?

In a very strange press release, agriculture officials from the United States, Canada and Mexico offered something of a nod to trade in the North American market earlier this week. The release came from USDA Secretary Tom Vilsack, Mexican Secretary of Agriculture Enrique Martinez and Canadian Minister of Agriculture Gerry Ritz.

In a statement issued in Mexico City, the three said: "We, the agricultural leaders of North America, met today in Mexico City to reaffirm the benefits of fair and open trade for our economies and food security. In recent years, the North American economy has more than doubled and agricultural trade has grown exponentially.

"Looking ahead, our common goal is to keep our food and agriculture industries strong and competitive. As partners, we understand the critical importance of strengthening our integrated supply chain to facilitate trade throughout North America and around the world. Growing global demand for quality, consistency and value is creating new and exciting opportunities for our agricultural sectors."

Then the officials waxed somewhat poetic. "From Mexico City, to Washington, to Ottawa," they intoned, "we will continue to show the world how trade and open borders support economic growth and jobs." They then pledged to remain committed to promoting a fair, open and integrated North American market that operates using science-based rules and reduces technical barriers to trade. Together, they pledged, "we are confident we can build an even stronger North American agricultural economy for the future."

It would be interesting to know what USDA did to generate such a statement at a time when the United States is pushing hard to increase protections for several industries at the expense of Mexico and Canada. These include a U.S. country of origin labeling law for meat and meat products that Congress recently reaffirmed and which both Canada and Mexico argue discriminates against their livestock and are challenging at the World Trade Organization. And, it includes potential constraints on Mexican sugar access to U.S. markets negotiated under the North American Free Trade Agreement, including a long phase-in process before the earlier duties were dropped. All this was negotiated in return for concessions on both sides, and which U.S. sugar producers now want to revoke under the guise of a "dumping" investigation.

The United States, including Secretary Vilsack, has commented negatively on the sugar producers' petition to the U.S. International Trade Commission, but Vilsack apparently did not see fit to make any critical comments in Mexico, or in much of anyplace else recently and which the three officials now seem to view uncritically.

So, it will be important and interesting to see what actually happens in the International Trade Commission review of U.S.-Mexican sugar markets as the gloves come off. Can the United States really promise market concessions in negotiations in return for Mexican concessions (as it already has done) and then turn around and impose sanctions when trading partners actually begin to cash in on the concessions? Does that mean there would be no U.S. response if Mexico begins to impose sanctions on large items it imports from the United States, such as pork?

It is particularly disheartening to see the United States in the role of the protectionist and the agreement violator, especially so if that happens without protest from other commodities that now are becoming increasingly vulnerable.

This is a very new and very important turnaround in U.S. ag policy with implications for a large number of groups -- a development that should be watched carefully by other producers, Washington Insider believes.

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