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.

Senate Democrats Call for Stricter Labor Rules in TTP Trade Deal

A group of 14 Senate Democrats is calling on the Obama administration to insist that stronger labor standards be included in the proposed Trans-Pacific Partnership (TTP) free trade agreement before they will approve the deal.

In letters to U.S. Trade Representative Michael Froman and Secretary of Labor Thomas Perez, the senators outline their concerns about what they say is a lack of protections related to organizing, collective bargaining, and the prevention of forced and child labor. The senators say these standards must be implemented by Brunei, Malaysia, Mexico and Vietnam prior to any TPP legislation taking effect.

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Failure by Congress to Approve U.S. Transportation Legislation Cutting Private Investment

The California State Teachers' Retirement System, the nation's second-largest public pension fund, says it is having difficulty finding suitable long-term U.S. infrastructure projects in which to invest some of its $191.2 billion in assets, partly because Congress has been unable to agree on a long-term transportation financing bill.

Over the past six years, Congress has approved only a number of short-term budget extensions for the Highway Trust Fund, largely because members have been unable to find a reliable source of funding for long-term projects. The current short-term patch runs out May 31, leaving Congress rushing once again to draft plans to keep federal construction money flowing to states.

Private lenders such as the California retirement system want to place their assets in longer-term investments, such as infrastructure projects that currently are made scarce by continuing congressional inaction. There already are signs that at least some of the private money could be invested overseas where governments have their eyes focused more clearly on the future and their commitments to long-term infrastructure projects are more solid.

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Washington Insider: Canada to Protect Managed Commodity Programs

Canada is known as a strong advocate for better market access to benefit its trade in meats and grains. At the same time, it has moved to staunchly defend trade protections for its dairy and poultry farmers. Those actions are seen as a direct challenge to U.S. leadership in the Trans-Pacific Partnership negotiations.

Canada is under increasing domestic pressure over the concessions sought by the other countries participating in the TPP negotiations, and these could cause political trouble for the ruling Conservatives in Canada's general election this October. All three major Canadian political parties support the supply management system of protections for dairy and poultry. However, trading partners such as New Zealand say the system needs to be dismantled. Others want to see it simply reformed.

"(We) will continue to promote and defend the interests of our supply management sector as we promote and defend our agricultural industry more broadly speaking," said Trade Minister Ed Fast when asked by an opposition legislator whether he would fully protect the system at the TPP talks.

"We did that with the negotiations (to create a recent free trade deal with the European Union), we will do that in our Trans-Pacific Partnership negotiations," he told a Parliamentary committee.

When Canada negotiated the EU trade treaty it managed to open its cheese market to only an additional 17,000 metric tons of cheese, less than 4% of the overall Canadian market.

Last week U.S. Agriculture Secretary Tom Vilsack said Canada risked getting left behind in the TPP talks because it had been reluctant to negotiate opening its markets.

Canadian officials shot back they are waiting to see whether the U.S. Congress passes the proposed "fast track" legislation that would make it easier for President Obama to win passage of the TPP. A significant number of Democratic lawmakers are resisting the fast-track legislation, which would allow Congress to vote any agreement up but prevent amendments, and yesterday Senate Democrats managed to block consideration of the proposal, at least temporarily. Whether they will continue to do so in the future remains to be seen.

Last Friday Canadian Farm Minister Gerry Ritz said Vilsack was "proving that he is worth his weight in gold when it comes to deflecting away from the fact" that the administration has not yet assured the passage of fast track legislation. Ritz no doubt is well aware of the fact that his position provides significant ammunition for Vilsack as he argues for fast track authority for the president.

So, the stakes on trade continue to rise as the end-game for the TPP moves into the final stages -- a development producers should watch carefully as it evolves, Washington Insider believes.

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(GH/CZ)

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