Washington Insider-- Monday

By DTN's Washington Insider

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

House Votes to Keep Restrictions on Travel to Cuba

The House last week voted to keep restrictions on Americans seeking to travel to Cuba, an action that is viewed as a setback for the president's efforts to ease the five-decade Cold War standoff and move to more normal relations with the communist nation.

The Republican-controlled chamber voted 176-247 against an amendment that would have dropped the provision from a transportation funding bill. The provision in question would block new rules issued in January aimed at significantly easing travel restrictions to Cuba and allow regularly scheduled flights for the first time.

Republicans, led by House Transportation and Housing and Urban Development Appropriations Subcommittee Chairman Mario Diaz-Balart of Florida, had added the provision to prevent licensing flights or cruise ships to Cuba if they involved property confiscated by the Castro regime. By preventing the licensing of flights and ships under specific circumstances, proponents aimed to continue some form of a ban on US travel to Cuba. The failed amendment, which would have reversed the provision, was introduced by Rep. Barbara Lee, D-Calif., and lost when 221 Republicans and 26 Democrats voted against but only 18 Republicans and 158 Democrats voted in favor.

The White House has threatened to veto the bill, in part because of the Cuba-related provision. Senate Democrats have indicated they will filibuster the appropriations bill if it includes the Cuba travel provision.

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Senate Bill Would Drop Some Controversial NPDES Pesticide Permits

A bipartisan group of senators last week introduced legislation that would allow pesticide applicators to spray near bodies of water without having to obtain clean water permits. The bill would restore the regulatory status quo for water pollution permits to a time before a 2009 federal appeals court decision that vacated an Environmental Protection Agency rule that exempted pesticide applicators from the need to apply for a National Pollutant Discharge Elimination System (NSPDES) permit.

Requiring applicators to obtain NPDES permits to use pesticides that have already been vetted by EPA is unnecessary, one of the bill's co-sponsors, Sen. Pat Roberts, R-Kan., said in a statement. Sen. James Inhofe, R-Okla., another co-sponsor of the bill, is chairman of the Environment and Public Works Committee, the panel to which the bill likely will be assigned because the legislation would amend the Clean Water Act.

A similar bill is moving through the House, with the Agriculture Committee already having approved it. The issue, which has been problematic among farmers and pesticide a applicators for a number of years, may be resolved legislatively before the end of the this session of Congress.

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Washington Insider: Canada, Mexico set severe retaliation request levels

There has been a lot of whistling past the graveyard along with a good deal of wishful thinking about possible efforts to sweep up after the US failed to impose a favored label that required 100% U.S. domestic content and thereby penalized Canada and Mexico.

However, based on repeated findings of U.S. violations of its trade agreements, the U.S. agriculture industry faces tough accountings now. Canada will seek authorization from the World Trade Organization for just over $2.4 billion and Mexico will ask for permission to seek $653 million in retaliation. These trading partners are taking personally the U.S. pullback from a leadership role in efforts to open global markets. Canada said it would choose “how and when to retaliate” after obtaining WTO authorization.

Canadian officials noted that, “Despite the WTO's final ruling that U.S. COOL measures are discriminatory, the United States continues to avoid its international trade obligations," Canadian Trade Minister Ed Fast said.

Last week, Canadian Ag Minister Gerry Ritz indicated the country would target U.S. beef, pork and California wines, as well as cherries, mattresses, office furniture and potentially other products. Of the $2.4 billion per year, Ritz said, imports from the U.S. meat industries alone are expected to see tariffs worth $1.8 billion.

The tariffs will be imposed by late summer “unless the U.S. Congress addresses Canadian and Mexican concerns before that time,” Ritz warned last Thursday. Even so, a number of U.S. politicians representing rural districts continue to advocate dragging their feet under the impression that the sanctions might not really appear.

The House Agriculture Committee last month cleared a bill (38-6) to repeal the labeling regulations for been, pork and chicken products, with the full House likely to take up the measure as early as this week.

The Senate has not yet indicated its COOL agenda but Ritz warned Senators that watering down the law with some other new labeling requirement would be unsatisfactory to Canada and Mexico. Senate Ag Committee Chairman Pat Roberts, R-Kan., said, “I have long had concerns with COOL for meat. USDA’s attempt to fix COOL was not enough, and we now know that those changes continue to be problematic in the eyes of the WTO.”

Ritz said he was “buoyed” by his meetings last week with Agriculture Secretary Tom Vilsack and influential members of Congress and is hopeful that the United States is heading toward elimination of the COOL requirements that the WTO has ruled violate international trade obligations.

Ritz warned that the resolve of remaining supporters of the labeling rules — including Democratic Michigan Sen. Debbie Stabenow, ranking member of the Senate Ag Committee, and Democratic Minnesota Rep. Collin Peterson, ranking member of the House Agriculture Committee — will be tested by Canada's retaliation. “They're not going to win in the long run. Their states are going to face stiff tariffs,” he said.

The United States, in what seemed like a last ditch quibble, argued that the annual values underlying the sanctions are "inflated." Canada's Ritz argued that the retaliation request was carefully worked out and scrutinized by Daniel Sumner, an agricultural economist at the University of California: "He's adjudicated this number. We didn't make it up,” Ritz said.

Ritz said the Canadian government's existing list of U.S. products against which it plans to retaliate is a “living document” subject to change at Canada's discretion. The WTO retaliation authority will specify only the total amount of tariffs that Canada is entitled to collect, not the specific products to which tariffs can apply, he said. “We can add or subtract to it as required.”

The focus now will be on the possible House vote this week on the repeal bill. After that, the issue will go to the Senate. As for the retaliation timeline, it just may be a lot sooner than what Rep. Peterson was talking about last week, press observers suggest.

Well, there are numerous fights remaining, and none of whose will “go quietly,’ observers note. However, it now appears that the momentum is moving toward ending the program for the first time in a long time, so perhaps the effort to use trade technicalities to boost local protection is winding down after a long struggle, Washington Insider believes.

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(GH/CZ)

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