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.

House Data Transparency Bill Could Cost EPA $250 Million to Implement

Implementing a bill that would require all Environmental Protection Agency actions to be based on publicly available and independently replicable data would cost the agency $250 million a year to implement, the Congressional Budget Office says. According to CBO, new activities mandated by the proposed legislation would require EPA to spend between $10,000 and $30,000 for each scientific study it reviewed. The agency currently uses about 50,000 studies annually in pursuit of its mission, according to the estimate.

The House Science, Space and Technology Committee, chaired by Rep. Lamar Smith, R-Texas, who wrote the legislation, disputed the estimate and said the CBO finding was based on a "misunderstanding" of the bill's intent. An aide to the committee told the press that the bill "simply says that EPA must utilize data that is already public and available to independent scientists." In addition, said the aide, the bill would require EPA to carry out those provisions for less than $1 million annually, thereby making the CBO estimate "inconsistent with the intent of the bill."

Inasmuch as EPA uses approximately 50,000 studies annually, the agency would need to keep the cost of its reviews to an average of not more than $20 per study. This is approximately the amount paid to a GS-12 EPA scientist for 33 minutes of work.

The legislation may need some tweaking before being brought to the floor for a vote. Otherwise, Congress runs the risk of getting pretty much what it is willing to pay for in terms of scientific review.

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Congressional Democrats Promote Transportation Bill Over Trade

A number of Democratic House members are calling on the White House to make a surface transportation reauthorization bill a higher priority than the president's campaign to acquire the Trade Promotion Authority (also called fast-track authority) that the administration needs to negotiate the Trans-Pacific Partnership trade agreement.

On a recent conference call, Rep. Tim Ryan, D-Ohio, said he believes that if Congress passes TPA before a transportation bill, the president would have very little leverage left with congressional Republicans to pass the transportation legislation. Ryan, along with Democratic Reps. Peter DeFazio of Oregon, Rosa DeLauro of Connecticut and Louise Slaughter of New York, last week sent a letter to the president outlining their position. DeLauro, DeFazio and Slaughter also spoke to union members and leaders who lobbied Congress against fast-track earlier this month.

It is unlikely that members of Congress who oppose both granting the president fast track authority and the TTP agreement are offering the White House advice that they believe would help the administration achieve both. Their concern instead is focused on passing the transportation infrastructure bill, a reality that could prompt the White House to use the leverage afforded by members' interest in transportation to gain some much needed Democratic support for the administration's trade agenda.

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Washington Insider: Trade Debate Over Ag Exports to Korea

Most agricultural groups strongly support trade deals, especially those that cut tariffs and other barriers and open new markets for commodities and value added farm products. For these advocates, it is difficult to explain how more than a few of their congressional representatives, as well as other trade opponents, are willing to cite barrages of numbers that cast doubt on the benefits of trade. This includes not only the benefits for agriculture, but also from trade in general. In particular, it is troubling to see some in Congress oppose the administration's push for trade promotion authority that will allow for the completion of the Trans-Pacific Partnership trade pact.

John Hansen, president of the Nebraska Farmers Union and a former trade adviser in the Clinton and Obama administrations, argued this week that the trade agreement with South Korea that has been in force for several years now has not been beneficial beef, pork, poultry and grain producers. Hansen asserted that U.S. exports of beef to South Korea are down 5% over the three years, pork exports down 2%, grains and feeds down 21%, and poultry down 41%.

While this kind of assessment of past trade deals has been cited frequently by trade opponents, the Hansen claims were disputed long and hard by the National Chicken Council and others. The council said poultry sales to Korea in 2012 were over 65 metric tons, dipped to 59 metric tons in 2013 and rebounded to 73 tons in 2014. The council is a strong supporter of trade deals and trade promotion authority.

That was only the beginning. Kent Bacus, lobbyist for the National Cattlemen's Beef Association, sort of accused Hansen of "cherry picking" his numbers. He pointed out that U.S. exports surged just before the trade agreement took effect because Korea's beef industry had an outbreak of foot-and-mouth disease and had to kill breeding cattle. Then, later, exports tapered off as Korea rebuilt its herds but then jumped to nearly $850 million to make Korea one of the top five U.S. beef export markets.

The per-head cattle price increased, Bacus said, and pointed out that the Korean free trade deal currently is in year three of a 15-year phase-down of tariffs that once stood at 40%, along with other restrictions. Trade agreements, "are not guarantees of success," Bacus observed. "They are [about] getting rid of trade barriers."

Hansen was part of a conference call by Public Citizen's Global Watch intended to counter the recent upbeat assessment by the Office of the U.S. Trade Representative of the agreement which began its third year of implementation Sunday. In addition to Hansen, other participants on the call included an Alabama steel worker who is a union official, and an executive of a Connecticut copper and brass company. They also said the agreement has benefited Korea more than it has the United States, resulting in a $25 billion trade deficit in 2014.

Opponents of the Obama administration's trade agenda are targeting the Korea trade pact because it has served as a model for the larger Trans-Pacific Partnership pact now under negotiation. The government takes strong exception to those arguments. It says the Korea-U.S. agreement (KORUS) is substantially larger and stronger now than it was in 2011 and has contributed to a strong and successful 2014 for American exporters.

Since the agreement began, four rounds of tariff cuts and eliminations have been completed, opening significant new market access opportunities for U.S. exporters, USTR reports. Overall, U.S.-Korea goods and services trade has risen from $126.5 billion in 2011 to $145.2 billion in 2014, the result of new commitments that have expanded U.S. exports sharply despite headwinds resulting from a general slowdown in the Korean economy.

USTR also notes that U.S. exports of key agricultural products benefiting from tariff cuts and the lifting of other restrictions under KORUS continued to reflect significant gains. Last year's 31.2% growth in farm exports to Korea was nearly seven times faster than U.S. agricultural export growth to the world at large. Some particularly striking examples include dairy products, meats, nuts, and fruits.

Clearly, USTR believes it has a strong case for proceeding toward an ambitious TPP and thus for passage of the "fast track" authority necessary to complete that deal. While the Farmers Union seems unlikely to soften its opposition to FTA's or to the TPP it is in the minority among ag producer groups and seems likely to remain so, Washington Insider believes.

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(GH/CZ)

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