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.

US Files WTO Dispute Against China’s Poultry Duties

The US filed a new World Trade Organization (WTO) dispute against China that claimed Beijing did not comply with the terms of a 2013 WTO ruling regarding duties on imports of U.S. poultry products. The US Trade Representative (USTR) said China continued to impose unfair antidumping and countervailing duties against imports of U.S. chicken broiler products despite a WTO dispute panel ruling that such measures violated China's international trade obligations.

In 2010 China targeted three U.S. poultry producers — Springdale, Ark.-based Tyson Foods Inc., Greeley, Colo.-based Pilgrim's Pride Corp. (now a subsidiary of Brazil's JBS) and West Conshohocken, Pa.-based Keystone Foods — with anti-dumping duties that ranged from 50.3% and 53.4% and countervailing duties fixed between 4.0% and 12.5%. China also set 105.4% antidumping duties and 30.3% countervailing duties against all other U.S. producers.

USTR Michael Froman said China's sustained tariffs “are in direct violation of China's international commitments and tilt the playing field further against America's poultry farmers." The complaint is the 12th U.S. enforcement action brought against China since 2008, according to the USTR.

The U.S. request for consultations is the first step in the WTO's dispute settlement process. China must respond within 10 days; the two countries will then enter into consultations within 30 days after the request is received.

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USDA Rule to Allow Import of Argentine Lemons Draws Opposition

A proposed rule to allow the import of Argentine lemons into the U.S. from USDA is drawing opposition from the U.S. citrus industry, which warns the move could introduce pests and disease and increase the ag trade gap with Argentina.

The citrus industry decried the move. “While the U.S. industry is fighting to stay vibrant against the ravages of an incurable disease, Huanglongbing (citrus greening disease), the Obama Administration wishes to bring more fruit from pest infested and diseased areas,” said Joel Nelsen, president of California Citrus Mutual, said in a May 6 statement.

USDA disputes the risk of disease, noting that “all shipments would require a phytosanitary certificate with an additional declaration stating that the lemons have been inspected and found to be free of quarantine pests.”

U.S. citrus growers also criticized the logic of allowing more imports, noting that it would exacerbate an ag trade gap with Argentina. USDA said it expects little effect on domestic producers as imports will mostly occur during the US offseason.

A USDA study estimated that the proposed rule would result in Argentine lemon imports to the US ranging from 15,000 tonnes to 20,000 tonnes. That could drop the average price of lemons by about 4% in the US, the study found.

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Washington Insider: A New Proposal for Genetic Regulation

Bloomberg is reporting this week that a new, joint regulatory approach is being proposed for the U.S. and European Union (EU) on gene-edited seeds and those created with new breeding techniques. The request came from the U.S. government and European farmers. The idea is to develop a separate regulatory classification for the new seeds.

The current EU genetically modified organism laws are seen as basically banning genetically modified crops in the EU, in spite of repeated studies that find them safe. As a result, U.S. officials are warning that failing to make a regulatory distinction for gene editing and new breeding technologies— (NBTs) – would mean a whole, important technology can't be used, according to an official cited by Bloomberg.

Even now, U.S. farmers say they are concerned that if they use the new seeds that are just coming on the market, they could later be faced with import ban by EU countries. “We are in the planting season in the U.S. and farmers have to decide whether or not to use these seeds,” the official said, noting that “new EU regulations could mean that the NBTs we use in the U.S. would have to go through another approvals process in the EU.”

The issue of new breeding technologies is on the agenda of the 13th round of Transatlantic Trade and Investment Partnership (TTIP) talks between the EU and U.S., but hasn’t gotten a great deal of attention. Officials have told the press that this concern is being overshadowed now by intense negotiations over the issue of geographical indication and others, Bloomberg said.

EU farm groups also voiced support for a new approach for NBTs. “We favor a case-by-case method of looking at which techniques are GMO and which aren't,” Arnaud Petit, director of trade at farmers' lobby Copa Cogeca, told Bloomberg. However, anti-GMO activists, including Greenpeace, are pressuring the European Commission to simply include gene-edited crops and crops produced with NBTs to be regulated as GMOs. To date, activists’ campaigns have led to bans on GMOs in 19 EU countries, Bloomberg said.

It is hard for the United States to understand the political impact rural activists and their anti-technology campaigns have in the EU where the structure of agriculture is very different —more than 77% of the EU's territory is classified as rural, the European Commission says and about half of its population lives in rural areas.

In addition, the EU has traditionally intervened much more heavily into its agriculture than is the case in the United States. The EU has 12 million farmers that average about 15 hectares (37 acres) each, the Commission says. By contrast, the U.S. has 2 million farmers and an average farm size of 180 hectares (444.6 acres). Overall, agriculture and the agri-foods industry account for 6% of the EU's GDP, comprise 15 million businesses and provide 46 million jobs. The role of agriculture in the economy is significantly smaller in the United States.

In general, the EU’s small farm units are much less interested in technology and efficiency than is the case for U.S. farms and so food prices are higher in the EU and consumers spend much more on food than we do. For example, USDA says that in 2014, U.S. consumers spent 8.5% of their disposable income on food and beverages; by contrast, consumers in France spent 17.1% of modestly smaller disposable incomes for food. Nevertheless, Europeans have so far shown very little interest in boosting ag production efficiency, especially not by consolidating their farms into more efficient operations.

Still, it is hoped that modern genetic efforts that introduce no new genetic material into seeds can escape classification as GMOs and facilitate better access to EU markets by global competitors. However, as is typically the case with agricultural technology in the EU, this promises to be both a bitter and a prolonged fight, Washington Insider believes.

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(GH/CZ)

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