Washington Insider -- Monday

By DTN's Washington Insider

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

House GOP Appropriators Plan to Withhold Funding to Enforce Greenhouse Gas Rules

House Republicans say they may try to block the Environmental Protection Agency's proposed greenhouse-gas (GHG) rule for power plants by denying the funding to implement it, according to Rep. Mike Simpson, R-Idaho, a senior member of a House Appropriations Committee. Funding for EPA is included in the Interior-Environment appropriations bill which is being drafted by an Appropriations subcommittee.

House Minority Whip Steny Hoyer, D-Md., has pointed out that House Democrats will vote overwhelmingly to oppose GOP attempts to drop funding for the GHG rules. "The overwhelming majority of our party is going to support [funding the effort] and the Senate's not going to pass a repeal" of the regulation, he said. "Nor will the president sign it."

It is unlikely that Congress would be able to roll-back EPA's carbon emissions proposal. But it is highly likely that Republicans will construct a procedure that will require Democrats to go on the record as either opposing or supporting the new GHG rules. Such votes then could be used as ammunition in next November's mid-term elections.

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Europe Closer to Allowing Formal Bans on GMOs for Reasons Other than Science

European Union member states last week came one step closer to being able to ban the cultivation of biotech crops within their borders for reasons that have nothing to do with science following a vote on the proposal by the EU's environment ministers. The measure now goes to the European Parliament which is expected to make a final decision on the issue by the end of the year.

The action would effectively give member states the ability to decide whether GMOs can be grown in their own territory by being able to opt out of cultivation licenses for reasons other than concerns for health or the environment. Both of those areas would remain under the jurisdiction of the European Food Safety Authority (EFSA). However, states would be able to ban the cultivation of GMOs for "social or ethical" reasons even if the EFSA has approved them.

The decision clearly runs counter to a "sound science" commitment made by both the EU and the United States when they launched Transatlantic Trade and Investment Partnership (TTIP) free trade negotiations. The decision to allow GMO bans by individual EU countries can be expected to raise yet another barrier to completing the TTIP.

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Washington Insider: Fast Track and the TPP

While both parties say they strongly support trade expansion, such policies traditionally have been more central for Republicans than Democrats –– especially, since fairly strong opposition to "fast track" (trade promotion authority) for the president has surfaced among Democratic leaders lately. As a result, Republicans are becoming increasingly willing to enjoy the opportunity to call out the administration for weak-kneed TPA support.

For example, House Ways and Means Trade Subcommittee Chairman Devin Nunes, R-Calif., criticized administration's TPA efforts recently following a subcommittee hearing. He argues that much stronger efforts to pass TPA should be made well before the administration concludes work with 11 other countries on the proposed Trans-Pacific Partnership free trade agreement. He even goes so far as to suggest that efforts to wrap up a deal without TPA could result in the death of the agreement.

TPA would allow the administration to develop trade negotiating objectives and then expedite consideration of implementing legislation without potentially deal-busting amendments. The authority which was frequently used to promote trade expired in 2007, and its renewal is backed by the business community but is anathema to labor unions and other trade agreement opponents.

House Ways and Means Chairman Dave Camp, R-Mich., Senate Finance Committee ranking Republican Orrin Hatch, R-Utah, along with Max Baucus, former Finance chairman, crafted a TPA renewal proposal which is pending and which enjoys strong Republican support but much more modest backing from Democrats. A key concern for trade advocates on the committee now is the effort by new Finance Chairman Ron Wyden, D-Ore., to flesh out a plan for what he calls a new "smart-track" TPA intended to take into account "the realities of modern trade" –– whatever that means –– but which so far lacks specifics.

For TPA to move forward and avoid a House-Senate conference and likely Senate opposition, Nunes says the bill has to be the same in both chambers. And, while he told the press that the defeat of House Majority Leader Eric Cantor, R-Va., who was a strong TPA supporter, would have no effect, he did note that a bipartisan deal had been worked out earlier with Baucus, and that the "clock is ticking in terms of time that we have left to even try to put something together before the end of the year."

Nunes' focus on the importance of TPA was echoed by a number of his Republican colleagues at the hearing and by several private sector witnesses. Those included a number of agricultural experts such as Professor Dermot Hayes, Iowa State University's International Chair in Agribusiness; National Cattlemen's Beef Association President Bob McCan; California Dairies Inc. President and Chief Executive Officer Andrei Mikhalevsky; and Westside Trading Co., Inc. President Ryan Turner.

Japan's continued insistence on keeping strong protections for several farm products came in for sustained criticism at the hearing. "Tariffs must be eliminated without exclusion," Nunes said, although he took the opportunity to emphasize what he called the administration's failure to hold Japan and Canada "to the level of ambition that Congress has demanded. He asserts that it is essential to have "a path to zero" for tariffs, and that "if countries insist on retaining tariffs, then we must complete the negotiations without them," he argued.

Clearly, the administration has lost significant credibility on trade through recent, pre-election opposition to TPA by key Democratic officials, as well by what some see as its lack of enthusiasm in pushing for Republican support. There are even a few Democrats arguing that TPA is not essential for an ambitious Pacific free trade area, a position that is far from convincing since fast track is widely regarded as essential to new trade deals, as it has been for several decades.

So, at this time, prospects for an ambitious TPP are up in the air, reflecting push-back from Japan and Canada and a questionable outlook for TPA in the United States. Given the importance of trade to producers, this is an especially important issue that should be watched carefully as it emerges, Washington Insider believes.

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