Washington Insider -- Tuesday

Urban Support for TPP Approval

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

Ready to Battle Regulations in 2016: US Chamber of Commerce

Robust opposition to the “regulatory tear” being undertaken by the Obama administration will be a top priority for the U.S. Chamber of Commerce (Chamber) in 2016, Chamber President and Chief Executive Officer Thomas Donohue in his annual State of American Business address.

“I can tell you that businesspeople at companies large and small wake up each morning and wonder what the government is going to do to them today. The current administration is on a regulatory tear—and this will continue until the day the moving van backs up to the door of the White House next January,” Donohue said.

Business and workplace regulations from the National Labor Relations Board (NLRB) were cited as a key area of overregulation, as were regulations being issued by the Environmental Protection Agency (EPA) including the Clean Power Plan (CPP), Waters of the U.S. (WOTUS) rule and a new ozone rule.

Regulations placed on financial markets were also singled out, with promises that the Chamber will aggressively move for reforms to the Dodd-Frank Act and the Consumer Financial Protection Bureau (CFPB). The Chamber criticized the CFPB for what it calls “regulation by press release” and is urging the creation of rules go through the “normal processes.”

Immigration reform was highlighted as critical to economic growth and the Chamber vowed to work hard in the coming year to make reform a reality. The group also reiterated support for ratifying the Trans-Pacific Partnership (TPP) agreement, while noting that they will work with the administration and Congress to “address legitimate concerns expressed by industry and legislators.” The Chamber says it is also working with the business community in efforts to support the Transatlantic Trade and Investment Partnership (TTIP) with the EU, and the Trade in Services Agreement with China. Donohue also echoed similar themes on trade and other areas in a session with reporters this week.

On energy, Donohue said “expanding America’s energy supply is another priority where progress can and must be made. We can and should be developing all kinds of energy and discriminating against none.” The Chamber, he said, is committed to expanding energy production on federal lands, as well as supporting emission-free sources of energy, including nuclear and renewables, while opposing the “regulatory assault” on coal.

Reauthorization of the Water Resources Reform and Development Act, which expires in September, was also mentioned as a priority of the Chamber for 2016, as was passage of the Regulatory Accountability Act (RAA). The RAA would modify rulemaking procedures for “high-impact rules”, those which would have a $1 billion or greater economic impact.


USTR: US Not Pressuring EU on China’s Economic Status

Pressure is not being brought to bear by the U.S. on the European Union (EU) to reject China’s request to be granted market economy status at the end of 2016, U.S. Trade Representative Michael Froman said during remarks to the Wilson Center.

Some reports had indicated that the U.S. was urging the EU to reject China’s request, but Froman disputed that, saying while the two sides have discussed the issue, the U.S. has not pressured the EU to reject China’s request. “Europe has a very different set of laws; they have a different set of institutions and different set of requirements, so it’s completely up to them what they decide to do on that issue, as it is for us as well,” he observed.

China’s request for market status at the end of 2016 is in accordance with its World Trade Organization (WTO) accession protocol. The decision, Froman said, would have implications for how antidumping investigations are conducted.

Separately, Froman noted that ongoing negotiations between the EU and U.S. over the Transatlantic Trade and Investment Partnership (TTIP) agreement could lead to investment standards which could then be promoted jointly with other countries such as China.

Also mentioned was the recently completed Trans-Pacific Partnership (TPP), which Froman insisted was not negotiable. The intertwined nature of TPP provisions “is one of the reasons we don’t believe this is renegotiable, and we’re focused on making clear to stakeholders and members of Congress what is in the agreement,” he said. As for the prospects for China joining TPP, Froman said, “There is a fair distance between the standards in TPP and where China is at the moment.”


Washington Insider: Urban Support for TPP Approval

It is hard to tell whether there is an “establishment” groundswell in favor of trade these days, but a least a modest wave of support by major urban dailies appears to be developing. For example, the Washington Post’s editorial board weighed in positively last week on the Trans-Pacific Partnership (TPP) and called for its approval.

However, perhaps more interesting than the Post’s support was its reasons.

WAPO notes that the 12-nation trade agreement would knit the United States and 11 Pacific Rim nations more closely together in a “rule-based economic zone,” with likely benefits for all. In addition, it takes politicians to task from both sides of the aisle for their efforts to “distance themselves from the pact.” In fact, it calls Mrs. Clinton out for a flip-flop on the issue since she helped promote it when she was Mr. Obama’s secretary of state.

The Post says the result of this politicization is to cut the pact’s early chances. Then, it says, Congress and the candidates need to see the latest nonpartisan assessment of the pact’s effects by the World Bank. “Like many previous analyses, it’s fundamentally positive,” the Post says.

The Bank finds that the TPP would stimulate global trade, which has been growing less rapidly since the ‘Great Recession.” By 2030, the Bank calculates, the economic output of TPP member nations could be 1.1% larger than without the TPP, although for some member countries like Vietnam, the increase could be much larger. In other words, “it would lift hundreds of thousands of people, if not millions, out of poverty.”

Specifically, the TPP would add 0.6% to the size of the U.S. economy and would raise the wages of unskilled labor by 0.4%, “contrary to much fear-mongering about the impact of free trade on low-skilled, low-wage workers.” Skilled workers’ wages would also benefit, to the tune of 0.6%, the Bank says.

The Post takes pains to point out that that projected economic gains for the United States are incremental, not transformational, and may have been oversold by the White House. “But what [the Bank analysis] really doesn’t support is the even more hyperbolic disaster scenarios being peddled by TPP opponents.”

The Post sums up by noting that the Bank’s deliberate analysis reveals that the TPP is likely to be just what its most sober advocates have always maintained: “a modest but measurable net plus for US workers and businesses, with the additional benefit of strengthening the U.S. geopolitical position in Asia.” In addition, the strategic importance of the pact was just underscored by North Korea’s provocative nuclear testing, the Post says.

To emphasize its point, the Post says, “Campaign-season demagoguery notwithstanding, Congress should take its earliest opportunity this year to move the legislation toward final passage.”

While the Post doesn’t say so, analysts have emphasized repeatedly that the pact’s benefits promise to be substantial for agriculture as the sector becomes increasingly dependent on exports for market growth. By linking this to the broader benefits from increased economic stability in the Asian region, the Post strikes a very positive note on an important trade matter and a debate that producers should watch carefully as it proceeds, Washington Insider believes.

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