Washington Insider-- Monday

Finding Some Support for Trade

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

U.S., China Remain at Odds Over Farm Subsidy Programs

An agreement to modify farm subsidy practices for World Trade Organization (WTO) members is unlikely to happen soon, as the U.S. and China continue to strongly disagree over what changes should be made.

Even after a week of productive agriculture negotiations in Geneva, trade officials told Bloomberg BNA that rising trade tensions between Beijing and Washington have reduced expectations for any near-term reductions in their respective domestic support polices.

U.S. and Chinese reluctance came as several small and developing countries in Africa, the Caribbean and the Pacific urged all WTO members, not just developed economies such as the U.S. and European Union, to pare back domestic support schemes.

If the U.S. and China remain at loggerheads it could jeopardize the WTO effort to advance a package of trade deals at the 2017 ministerial conference, participants told Bloomberg BNA.

Since 2001, WTO members have sought to achieve "substantial reductions" of trade-distorting domestic support, in line with the goals of the Doha Development Agenda.

The domestic support pillar of Doha has remained one of the most deadlocked areas of WTO agriculture negotiations, due in part to increases in support payments in large, emerging economies such as China and India.

Beijing continues to insist any domestic support agreement should provide special and differential treatment for developing countries according to the terms of a 2008 WTO proposal known as Rev. 4.

The U.S. told members of the WTO agriculture negotiating committee July 18 that finding the "right solution" is key, though it is unclear whether that can happen before, during or after the WTO 11th ministerial conference in Dec. 2017.

Soy Growers Applaud European Approval of New Biotech Traits

American Soybean Association (ASA) President and Greenwood, Del., soybean farmer Richard Wilkins welcomed news Friday out of Brussels that the European Union (EU) has approved three outstanding biotech soybean traits for import and processing. Link for details.

The approved traits include the Xtend dicamba-tolerant soybean and Vistive Gold high oleic soybean products from Monsanto, and the Balance GT FG72 soybean from Bayer CropScience.

In a statement, Wilkins welcomed the action of the EU, while noting that improvements still are needed in the timeliness of EU approvals. The three soybean events had received positive scientific opinions from the European Food Safety Agency over a year ago, and had been waiting for final approval by the EU Commission since January.

"We are very relieved to see these three traits approved for import into the European Union, as today's announcement represents a clearing of an important hurdle for the commercialization of these valuable products in the U.S."

In Europe, the approval means that the EU's livestock and feed industry, which is more than 70% dependent on imported feed, can get the high-quality protein it needs, ASA said. "In the U.S., American farmers need an ever-increasing range of tools to tackle the challenge of resistant weeds that now impact nearly every soy-growing state. Similarly, with the continuing move away from trans-fats in American diets, farmers need additional tools to produce soybeans that meet that market demand as well," the statement continued.

Washington Insider: Finding Some Support for Trade

Well, the politics of trade are murky, and getting murkier by the day, it seems. We can be pretty sure the administration supports trade because it has passed facilitating "fast track legislation" and is pushing hard for passage. Typically, Republican platforms are, too, but this GOP nominee has reversed that position and is making lots of statements about steps to be taken to pull back "deals" he doesn't like. The GOP VP nominee was a big trade supporter, but seems now to be an opponent, sort of.

The proposed Democratic nominee seems to be a trade opponent, too, perhaps in response to her Democratic Socialist opponent's position, and her proposed VP candidate was a strong supporter before he became an opponent. So, you can be forgiven for wondering how all this will turn out.

Much of this opposition to trade seems to have originated in the Rust Belt where job losses were a big topic, but experts say it has always been a hard sell.

Now, however, the Hill is publishing results of a new poll that shows that a majority of Americans support expanding trade and say the United States must engage globally to grow the economy, a very different view than that of the presidential campaigns.

The Hill highlighted a "Third Way" poll that found that voters favor by a two-to-one margin "expanding exports of American products to other countries" despite negative trade rhetoric from the Democratic and Republican presidential candidates.

The poll showed that 56% of voters agree with the statement "the U.S. economy cannot succeed if we limit trade with other countries."

That support is seen extending across demographic groups but it is especially strong among Democrats (61%), liberals (62%), Clinton voters (62%) and millennials (67%). This comes at a toe when most congressional Democrats are resisting a push by President Obama to pass the Trans-Pacific Partnership this year.

Even among Trump voters, 50% said the United States can't succeed if trade is limited.

On Friday, the president touted the benefits of far-reaching trade agreements in an effort to counterbalance both Republican nominee Donald Trump and Presumptive Democratic nominee Hillary Clinton, who both oppose the TPP. Obama called globalization "a fact" and "we're not going to be able to build a wall around that"--a knock against Trump's vow to renegotiate or withdraw the United States from the North American Free Trade Agreement and the TPP.

At the Republican National Convention on Thursday night, Trump vowed to overhaul the nation's trade policy. However, the candidate did not advocate withdrawal from trade completely, but argued he would focus on bilateral trade deals instead of forging larger multi-nation agreements, like the 12-nation TPP.

Mexico President Enrique Peña Nieto, who joined the president on Friday in a press conference at the White House, provided his support for the TPP as an avenue to improving the oft-criticized NAFTA pact between the United States, Mexico and Canada.

"I think the position of the United States is that after 20 years of having NAFTA, we now have the conditions to modernize it, to update NAFTA and potentialize this agreement even more," Peña Nieto said.

Obama agreed saying that "we've learned from our experience in NAFTA what's worked, what hasn't, where we can strengthen it."

Still, voters are concerned about the negative effects of global trade, including jobs losses, a worry that Trump is using in an effort to gain an edge across Rust Belt states. Among a list of voters' worries, 61% expressed some concern that trade with countries like China and Mexico will cost jobs in my community, with 31% saying it worried them a "great deal," according to the Third Way poll.

Interestingly, millennial voters (ages 18-34) broke from other voting groups — with 51% saying globalization is not much of a concern.

The president addressed that issue, as well, in his Friday remarks. "So we have to focus on how we ensure the economy works for everybody and not just a few," Obama said.

"There are dangers that globalization increased inequality," he said. He said that the TPP includes protections for workers to ensure they don't get left behind. "And that's what we have to focus on," Obama said. "And the Trans-Pacific Partnership is consistent with that."

The nationwide poll of 1,000 registered voters was conducted from June 22-28.

Right now, the administration is engaged in a high-stakes game to approve the TPP this year, a goal many observers think is unlikely to be achieved. Still, amid the anti-trade cacophony this summer, it will be interesting to see whether the results of the "Third Way Poll" stand up to the expected assaults of politicians with vested interests who are certain to be critical. Since, trade is so vital to producers' interests, it will be important to watch how that upcoming fight goes, Washington Insider believes.

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