Washington Insider-- Thursday

By DTN's Washington Insider

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

USDA Touts Benefits of TTP to U.S. Agriculture

Meat, dairy, fruits and vegetables top the list of U.S. agriculture exports that are likely to benefit from increased market access from the prospective Trans-Pacific Partnership (TPP) agreement, according to Phil Karsting, administrator of USDA's Foreign Agricultural Service (FAS). Speaking earlier this week in Richmond, Va., Karsting said the United States is "well-positioned" to make advances in its share of the agriculture markets of the 11 other TPP countries in the areas of processed foods and beverages.

He acknowledged that the talks have been slowed due to contentious agricultural market access talks that the United States has been holding with Japan and Canada, adding that the United States would like Canada to make a TPP tariff offer on dairy, and calling resolution of this issue "an important component of the current negotiations."

With regard to Japan, analysts say many of the other TPP countries are waiting for the outcome of the U.S.-Japan market access discussions to see what exceptions the United States is willing to accept with regard to the goal of total tariff elimination that was made by the TPP leaders in November 2011.

Additional administration officials are expected to take to the road in coming weeks in an ongoing attempt to sell TTP to the public and to state officials who are being lobbied by labor and environmental groups to oppose the ambitious agreement.

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Senate Budget Committee Moving Forward with Plans for Fiscal 2016

Senate Budget Committee Chairman Mike Enzi, R-Wyo., this week will brief his Senate Republican colleagues on his plans for developing a federal budget for fiscal 2016, with a markup of the budget resolution expected sometime next week.

If the traditional schedule holds, the text would be released March 18, with the markup and proposed amendments March 19. The House Budget Committee also is expected to mark up its budget next week, probably on March 18.

It is unclear if Enzi plans to use the reconciliation process gain Senate approval of his budget bills. Under reconciliation, bills are permitted to the Senate by a simple majority. Enzi earlier did tell reporters he expects to include reconciliation instructions in the annual budget resolution his committee is crafting.

Senate Republicans haven't had to approve a budget since 2006, and now needs to get back into practice in short order.

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Washington Insider: Concerns About Trade

It is increasingly expected that agriculture will be in the headlines much of the time over the coming year, especially with regard to the nutrition programs but also on trade — which is not strictly an ag issue, but certainly one that is extremely important to the sector.

And, there are new concerns emerging. Senate Finance Committee Chairman Orrin Hatch, R-Utah, told the press recently he sees little middle ground that he can use to work with ranking Democrat Ron Wyden of Oregon toward a quick wrap-up of a bipartisan Trade Promotion Authority bill. The administration will need TPA to conduct and conclude trade agreements.

The main issue now seems to be strong efforts by Democrats to include regulations against currency manipulation in trade deals, a debate Wyden recently announced and which Sen. Chuck Schumer, D-N.Y., will lead. The Schumer provisions are opposed not only by key Republicans but also the White House and the Federal Reserve.

“I’m not willing to diminish the workability” of TPA, Chairman Hatch told the press. The administration and the congressional majority see TPA as essential for completion of two trade deals being negotiated, the first to create a Trans-Pacific Partnership and the second being the European Union-U.S. free trade deal. Many experts suggest that currency regulations are often extremely complex and are widely regarded as far more challenging than run-of-the mill trade issues that the World Trade Organization faces on a daily basis.

Wyden said he and Hatch will meet again this week and he repeated that his top goals include enforcement of existing trade deals and enhanced congressional oversight after trade pacts are approved, a posture that is not exactly encouraging for trade advocates.

In the meantime, USDA officials have been using every forum at their disposal to emphasize how important the negotiations now under way could turn out to be for U.S. agriculture. Phil Karsting, administrator of the department’s Foreign Ag Service, told a recent trade conference that the biggest U.S. farm product winners under TPP would include meat, dairy and fruits and vegetables.

He also said the sector as a whole is “well positioned” to expand its share of the agriculture markets especially in Japan and Canada, but also in the nine other TPP countries for processed foods and beverages: Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

Karsting also said negotiations with both Canada and Japan continue to be promising, and particularly in the latter case are “intense and ongoing” and “happening continuously” in person and video conferences. He also noted the difficulty of the talks by pointing out their size and political sensitivity — and that they have “full attention” of both sides.

Clearly, critics who suggest that TPA is “unnecessary” because the talks have been moving along well will be challenged to examine the process more closely, with the toughest part of any trade negotiation expected at the very end where each side’s concessions are compared and the very sharp pencils are brought into play.

Trade advocates suggest that it would be a serious mistake to allow politics by either party to interfere with efforts to give negotiators the tools needed to bring the broader, extremely important TPP deal to fruition in the near future — a process producers should watch carefully as it proceeds, Washington Insider believes.

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(GH/CZ)

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