Washington Insider-- Tuesday

By DTN's Washington Insider

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

Vilsack Wants Strong Sanitary, Phytosanitary Measures in TPP

It is important that the proposed Trans-Pacific Partnership (TPP) free trade agreement include specific rules governing food safety (sanitary) and animal health (phytosanitary) measures that are science-based and consistent with international rules, according to Agriculture Secretary Tom Vilsack. "We need a mechanism so if something happens that isn't based on science and international rules, there's a process that's quick and more effective to break down barriers that shouldn't be there in the first place," Vilsack said.

The World Trade Organization agreement on sanitary and phytosanitary (SPS) measures is in place to ensure countries don't implement strict health and safety regulations simply to protect domestic producers. The TPP currently being negotiated among the United States and 11 other countries would include "WTO-plus" provisions for SPS measures, or obligations that go beyond those enforced by the WTO. Inclusion of these SPS measures in the TPP could set the stage for future international trade deals, some observers believe.

If enough major economies sign on to more stringent SPS requirements –– especially to a reliance on real, quantifiable health and food safety threats –– it would prove a significant deterrent to non-science-based barriers to trade. However, those who rely on perceived (as opposed to real) threats, such as European "precautionary principle," are unlikely to agree to see their food safety systems altered without protracted discussions beforehand.

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U.S. Per-Capita Income Loss-Growth an 80-20 Mix

A new report from the Bureau of Labor Statistics shows that 80% of Americans are earning less than they did in 2013. However, there is good news: that other 20% (those with average pre-tax incomes of $166,000) saw their incomes grow 0.9%. If the political/economic hypotheses embraced by some are correct, the additional income earned by the wealthy should result in more U.S. jobs being created in the near future.

Meanwhile, every other income group saw their incomes drop 2% or more, with the lowest 20%, which earned $9,818 on average, losing the most ground, with incomes down 3.5%.

The data offer the latest signs of the growing chasm between America's rich and poor. Federal Reserve Chair Janet Yellen has used her first year as Fed chief to advocate for those hurt most by the deepest recession since the Great Depression.

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Washington Insider: Trade Promotion Authority Fight Intensifies

If you don't think the political tension is building on U.S. trade policy efforts, you might want to take a look at the schedule the press is reporting now for Senate passage of Trade Promotion Authority. The publication Politico reported on Sunday that "Senate aides have circulated a tentative date of mid-April for advancing 'fast-track' trade legislation in the recognition that Sens. Orrin Hatch and Ron Wyden have to move quickly to finalize a deal on the bill or risk losing their chance to get it passed by the end of the spring session."

The staff says that the senators are planning to introduce the trade promotion authority bill on April 13, the day lawmakers return from their two-week recess, followed by a Senate Finance Committee hearing April 15 and a markup on April 21.

The expectation is that both the Senate majority and the White House are working hand in hand to expedite congressional consideration of the enormous Asia-Pacific trade deal and want to send Senate Majority Leader Mitch McConnell, R-Ky., a signal to carve out floor time in the upcoming six-week legislative period. That period is already stretched to consider major issues with competing priorities ranging from budget reconciliation to the evolving political deal with Iran.

Still, observers say that the fate of Trans-Pacific Partnership with Japan and 10 other Asia-Pacific countries is a particular priority, so TPA legislation with its requirement for an up or down vote for trade deals is considered vital for congressional approval of the deal, the biggest in world history. TPA is especially important because before countries put their final offers on the table, they've said they want assurance through the legislation that U.S. lawmakers won't be able to tear the agreement apart during congressional debate.

Japan, especially, has been increasingly vocal about the need for the bill as a TPP gathering meant to wrap up the deal approaches in late-May.

To emphasize the importance of U.S.-Japan relationships, Prime Minister Shinzo Abe is expected to come to Washington for a state visit this month and next. During that trip, Abe will become Japan's first premier to address a joint session of Congress — likely at a time Congress is deep in negotiations on "fast track" trade promotion authority for the TPP.

Labor advocates like AFL-CIO President Richard Trumka and former Clinton administration Labor Secretary Robert Reich have come out strongly against "fast track" on the grounds it will increase outsourcing and abuses by multinational corporations while doing little to prevent currency manipulation or tamp down trade deficits.

The U.S. trade representative and other trade advocates argue that these are familiar and tired arguments. "Trade rules for a different time either become outdated or incomplete," Scott Miller, a senior advisor at the Center for Strategic and International Studies, a Washington think tank, recently told a House Foreign Affairs subcommittee. Denying American businesses entry to the world's largest free trade zone would be an exercise in self-destruction, he pointed out.

In fact, the TPA fight has become both tough and bitter, and agricultural issues are central — especially, those concerning value-added products like U.S. beef and pork.

Still, the extremely tight schedule being laid out in the Senate for the TPA is highly risky because any significant delay can change the overall momentum of the talks. Thus, progress toward a deal in the coming weeks is increasingly important, and should be watched closely by producers throughout the debate, Washington Insider believes.

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(GH/CZ)

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