Washington Insider - Wednesday
Senate Proposes $8.18 Billion for EPA in Fiscal 2015
Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.
Senate Bill Aims for No Repeat of Propane Shortage
Legislation that would give the Secretary of Energy the responsibility of being the emergency coordinator should another propane shortage occur was introduced in the Senate just before Congress adjourned for its five-week summer recess.
The measure, introduced by Sens. Al Franken, D-Minn., Tammy Baldwin, D-Wis., and Rob Portman, R-Ohio, is intended to head off future propane shortages such as those that plagued the Midwest last winter.
Among other things, the proposal would provide for increased storage of propane in regional reserves. The proposal directs the secretary of energy to study the feasibility of regional reserves, and requires the secretary to submit a plan to Congress and to the president to establish such reserves. It also would expand the list of equipment covered under USDA's storage facility loan program to include propane tanks.
The bill was introduced as senators were in the process of leaving Washington. It is too early to judge the strength of either support for or opposition to the proposal.
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Senate Proposes $8.18 Billion for EPA in Fiscal 2015
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The Senate Interior and Environment Appropriations Subcommittee has released a draft of a $30.7 billion spending bill for fiscal 2015 for the Interior Department, the Environmental Protection Agency and related agencies. The total was $500 million higher than the House version.
The Interior Department would receive $10.62 billion, up from the $10.53 billion enacted for 2014. EPA would receive $8.18 billion, virtually unchanged from the $8.2 billion enacted level for the agency. Meanwhile, the House already has passed its version of the spending measure, a bill that would fund EPA at $7.5 billion, $717 million below the fiscal 2014 level.
The Senate has not taken up any of the appropriations bills passed by the House this year, and is unlikely to do much work on spending measures when Senators return from recess on Sept. 8.
Washington Insider: Pushback Against Proposed Sugar Agreements
In response to a petition from U.S. sugar producers, the U.S. Department of Commerce (DOC) is investigating dumping and countervailing duty charges against Mexico filed by the American Sugar Coalition and its individual members. Rulings are expected by late August and early September.
Meanwhile, there are reports that parties representing U.S. sugar producers are in discussions with Mexican government and sugar industry officials that could lead to an agreement to "manage" sugar trade and production in both countries.
Recently, however, a bipartisan group of senators wrote to Secretary of Commerce Penny Pritzker to oppose any new sugar deal with Mexico since such an agreement to settle current trade cases would violate the U.S. commitment to free trade with that country. Sens. Jeanne Shaheen, D-N.H., and Pat Toomey, R-Pa., led the coalition in its opposition to any "managed sugar trade" deal with Mexico on the grounds that it would raise sugar costs for U.S. consumers.
The letter was signed by 15 other senators, including Sen. Rob Portman, R-Ohio, a former U.S. trade representative. Shaheen and Toomey, along with Sen. Mark Kirk, R-Ill., another signatory on the letter, also have led bipartisan efforts to revamp the U.S. sugar program.
The group argues in its letter that any managed trade agreement between the United States and Mexico, including a suspension agreement or other mechanism will "cost American jobs, hurt consumers and encourage retaliatory trade actions to the detriment of both the United States and Mexico."
The letter also argues that a suspension agreement would threaten the viability of U.S. food manufacturers, especially since the North American Free Trade Agreement called for an open market in sweeteners. That agreement was implemented over 15 years after being finalized in 2008, the group notes.
While the U.S. sugar industry has argued that declines in domestic sugar prices provide the basis for the anti-dumping suit referenced above, this was actually the result of factors outside the scope of the antidumping and countervailing duty cases, the senators say. The senators also argue that while Mexican growers are being blamed for price declines, Mexican sugar does not threaten the U.S. industry, which is heavily protected by the U.S. sugar program.
Rather than being damaged by Mexican exports, the letter said that since 2008, U.S. sugar producers have expanded their domestic market share, increased production by 13 percent and experienced some of their highest profits on record during four of the past seven years. The administration has objected modestly to the Commerce decision to go forward with the antidumping Mexican case on the grounds that the sugar industry is well protected against price declines by existing U.S. programs. It also worries that since NAFTA covers broad areas of trade with Mexico, additional protections for sugar would likely have negative consequences for other U.S. industries.
Mexico is a very important market for a number of U.S. agricultural products, including pork and corn sweeteners. As Agriculture Secretary Tom Vilsack has suggested, a decision to restrict the access of Mexican sugar to U.S. markets almost certainly would lead to retaliation by Mexico and growing trade tensions for many exports.
Thus, the stakes are high for these cases, and they should be watched carefully by producers as the litigation continues, Washington Insider believes.
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