Washington Insider --Wednesday

USDA Reorganization Moving Forward

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

South Korean Envoy: US Likely to Remain in KORUS

South Korean Ambassador Anh Ho-young expects the U.S. to continue trade talks on the concerns about the 2012 trade agreement, despite reports that President Donald Trump is considering taking America out of the pact. Ahn said Monday at a forum that he does not have a date for a second special session of talks with the U.S., but he said he is taking Trade Representative Robert Lighthizer at his word that further talks will be held.

Lighthizer called for the session under a provision in the trade agreement, generally referred to as KORUS. Ahn said South Korea is keeping the lines of communications open with the administration. It is unclear whether Lighthizer wants to narrowly focus the talks or expand them to a renegotiation of the trade pact. "Let us be patient and go step-by-step rather than jumping the gun," Ahn said when asked if South Korea would be amenable to the United States opening KORUS for renegotiations — as it has done with the North American Free Trade Agreement.

US Demands Increase WTO Dispute Body Turmoil

The appointment of several key World Trade Organization (WTO) officials is being blocked by the U.S. in a high-stakes gamble aimed at reforming the world's primary trade dispute settlement forum.

U.S. trade officials linked the process to appoint three new members of WTO's appellate body to U.S. demands for changes to WTO's 22-year-old dispute settlement rulebook, according to participants at an August 31 meeting in Geneva.

More than a dozen WTO members voiced opposition, saying they are concerned by the systemic implications of the Trump administration's linkage, according to meeting participants. During the meeting of WTO's dispute settlement body (DSB), U.S. trade officials said that simply moving forward with filling vacancies risks perpetuating concerns about the panel, according to sources familiar with the discussions.

WTO appointments are granted on a unanimous basis. U.S. opposition to any new candidates may be problematic for the appellate body, which is short-staffed and overwhelmed by an increasing number of high-profile trade disputes. The seven-member appellate body is down to five members after the recent departures of Kim Hyun-chong, who resigned in August, and Ricardo Ramirez-Hernandez, whose term expired in July. It is set to lose a third member on December 11 when Peter Van den Bossche's final term expires.

Washington Insider: USDA Reorganization Moving Forward

It seems a little strange, but USDA says it is moving forward with its reorganization, in spite of the bitter fights underway on the tax, trade and other fronts, according to Politico. Agriculture Secretary Sonny Perdue last week announced a raft of additional changes to USDA offices and programs as part of his ongoing effort to streamline the vast bureaucracy, improve its efficiency and make it, as he likes to say, more customer friendly.

Perdue launched the reorganization in May during a visit to a grain processing facility on the banks of the Ohio River in Cincinnati. Under elements of his plan the department is combining domestic farm services into a single mission area, organizing trade-related initiatives under the newly created undersecretary for trade position, and eliminating the rural development mission area by moving those programs into the portfolio of a newly created assistant to the secretary.

Perdue also gave some details of how some of the new mission areas will look. The U.S. Codex Office, which deals with aligning international standards, will be moved from the Food Safety and Inspection Service to the trade mission area.

The International Food Commodity Procurement program, currently housed within the Farm Service Agency, will be moved to merge with the domestic Commodity Food Procurement program under the Agricultural Marketing Service, a change that will put all of USDA's commodity procurement efforts in one place. The Grain Inspection, Packers and Stockyards Administration, now spread across several agencies, will also be folded into AMS.

In another merger, the Center for Nutrition Policy and Promotion will join forces with the Food and Nutrition Service. The Office of Pest Management Policy will be moved from the Agricultural Research Service to the Office of the Chief Economist.

USDA argues that switch better reflects the office's mission.

Perdue's reshuffling will also create a Rural Development Innovation Center to evaluate the effectiveness of the business, housing and utilities programs the department provides. And USDA is also launching an Office of Partnerships and Public Engagement that will group together the Office of Advocacy and Outreach; the Faith-Based and Neighborhood Partnerships staff; the Office of Tribal Relations; and the Military Veterans Liaison.

Some like the changes, but some don't. The National Grain and Feed Association and the North American Export Grain Association are pleased with the proposed move of the Federal Grain Inspection Service, part of GIPSA, to AMS. In a statement, the groups said the move "will help the agency better fulfill its statutory obligation to provide reliable, accurate, timely, impartial and cost-effective services. "Relocating FGIS within an agency that has a similar mission and function as a service agency is the foundation for its successful future, and we commend Secretary Perdue for recognizing this need and moving expeditiously to bring about this change," NGFA said.

However, at least one critic of the changes weighed in last week. Brian Ronholm, who served as deputy undersecretary for food safety at USDA during the Obama administration, questioned the decision to move Codex. "While moving Codex to the trade office may seem inconsequential on the surface, it actually will undermine the United States' credibility in the international food policy arena, and represents yet another effort by the Trump administration to emphasize trade goals over food safety priorities," Ronholm said. "The public health foundation of FSIS provides the U.S. Codex Office with the credibility necessary to implement outreach programs that gain support for U.S. positions around the world."

There is another issue. While Perdue is charging ahead with the changes, he is doing so without key staffers in place in these various mission areas. For example, Indiana Agriculture Director Ted McKinney has been nominated to serve as undersecretary for trade and foreign agricultural affairs, Iowa Agriculture Secretary Bill Northey got the nod to lead the new domestic farm services arm, and Nebraska Agriculture Director Greg Ibach is the administration's choice to head marketing and regulatory programs.

All three are still awaiting a date for their confirmation hearings, and McKinney has been waiting much longer than the other two — an irony in the Washington sense of the word, given that he's holding his horses on a position that Capitol Hill has wanted to see realized for some time. The Senate Agriculture Committee told Politico earlier this week that it intends to hold nomination hearings this month.

So, we will see what all this means. The downgrade for rural development is already controversial, and at least some of the others likely will be too. Making such significant changes at a time when the government programs are severely strained also seems somewhat unusual. These are all changes producers should watch closely as they emerge, Washington Insider believes.

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