Washington Insider - Friday

Senators Focusing Heavily on Trump Trade Agenda

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

Chinese Ambassador Warns Against Trade War

Chinese Ambassador to the U.S. Cui Tiankai on Wednesday warned about the cost of any trade war. “Naturally, China and the U.S. could have differences,” Cui said at an event with Sen. Steve Daines, R., Mont., at the Chinese Embassy. "Yet some people in DC believe that economic and trade issues between our two countries should be resolved through a trade war. I want to tell them that economic and trade relations between China and the U.S. are mutually beneficial in nature."

Cui noted that a trade war with the U.S. "will do immediate and long-term damage to both economies. Moreover, it will certainly weaken people's confidence and darken the future prospects of global growth. As the two largest and leading economies in the world, China and the U.S. will definitely bear the brunt." Meanwhile, Chinese Vice Minister of Foreign Affairs Zheng Zeguang is in Washington, DC, for talks with the Trump administration.

Trump Nominee Comments on WOTUS Rule

President Donald Trump’s nominee to run the U.S. Army Corps of Engineers was cautious in commenting on the ongoing rewrite of the Waters of the U.S. (WOTUS) rule, noting the Corps works with EPA in developing the rule. "I will be bound to the rules and the laws that Congress makes or administrative policy once confirmed," nominee R.D. James told the Senate Environment and Public Works Committee during a confirmation hearing.

"Regardless of my personal feeling about that rule or law or policy, that’s what I’ll have to do." He did, however, describe his general feelings about cooperative federalism: "I don’t think the federal government should be here to take away the rights of a state." A spokesman said Chairman John Barrasso, R-Wyo., hopes to hold a committee vote on James next week.

Washington Insider: Senators Focusing Heavily on Trump Trade Agenda

POLITICO and other urban media are reporting this week that the end-of-year battles over the recently passed tax bills, as well as the year end debt ceiling challenge, have become increasingly bitter and controversial—as well as difficult to evaluate.

In spite of the headlines regarding tax bills and government spending, trade issues were not far from headliner status, either. For example, Bloomberg says that a group of Republican senators offered President Donald Trump a blunt assessment when discussing the administration's renegotiation of the North American Free Trade Agreement, according to Sen. Deb Fischer, R-Neb.

“We were pretty blunt with the president on some issues,” Fischer said. “He wants to meet again with us again in a few weeks,” she added. Fischer said she would “brush up” on NAFTA to provide the president with “more trade statistics and facts” when that future meeting occurs. The White House press office did not immediately respond to a request for comment.

“I'm urging him to be careful,” Fischer said when asked about the threat of withdrawal. “We don't want to see our ag markets take a dive.” The president told U.S. Trade Representative Robert Lighthizer that “he needs to work with us as well,” she said. “And that's a good thing.” Fischer also said energy trade with Canada and Mexico presented an area for NAFTA modernization.

Fischer and another group of senators continued their NAFTA-protection efforts by pressing Commerce Secretary Wilbur Ross in yet another meeting last week, Bloomberg said.

Republican Sens. Lamar Alexander of Tennessee, Joni Ernst of Iowa, Jeff Flake of Arizona, Cory Gardner of Colorado and Lindsey Graham of South Carolina had joined Fischer in meetings with Trump and top administration officials last week. The group is ramping up their defense of the pact as the administration’s repeated threats to pull the U.S. out of the pact are casting a shadow over the negotiations.

Graham, in a Dec. 5 statement, said he agreed with Trump on the need to update NAFTA to make it a better deal for American workers.

A better deal would include “negotiating an energy component to NAFTA so North American energy can better compete with Russia, China, and the Middle East,” he said. Ernst said she stressed the importance of maintaining NAFTA, and the duty-free access U.S. agriculture products enjoy under the agreement.

Sen. Jerry Moran, R-Kan., requested the Ross meeting, which was convened by Senate Commerce Committee Chairman John Thune, R-S.D.

Moran said Ross understands that he and others will not “hesitate to bring up further concerns as they hear from farmers and ranchers on this issue.” A Moran aide told Bloomberg that the Senator joined several other Senate lawmakers in requesting the secretary conduct an economic analysis on possible NAFTA changes last month.

The senators say they have not received an official response from the Department of Commerce regarding an analysis, he said. The department did not immediately respond to requests for information on the meeting.

The meeting with Ross took place during a wide-ranging grassroots effort Dec. 6 to tweet support for the pact to the White House, Bloomberg said. “On NAFTA Grassroots Day, I encourage farmers and ranchers to make your voices heard about the importance of trade to the future of a livelihood in agriculture,” Moran tweeted under the hashtag #Farmers4NAFTA #JustGrowIt. Groups involved in the effort included the National Pork Producers Federation and the National Association of Wheat Growers.

Lighthizer met with Senate Finance Committee Democrats and Republicans on NAFTA in separate meetings on Dec. 6, according to a Senate aide.

So, there are lots of meetings on trade issues being held and even more tweets in the air. However, a key uncertainty arises from the huge problem of differing perspectives—with the administration continuing to insist that individual “trade deficits” be targeted, in spite of the fact that many U.S. producers benefit from very low tariffs under NAFTA, and that many trade experts argue that individual trade deficits are not significant measures of market access.

These are highly complicated measures, but differences in basic concepts that likely will need to be rationalized if these extremely important NAFTA markets are to be preserved.

This is a concern that USDA is well positioned to address especially given that Secretary Perdue has such significant past trade experience, Washington Insider believes.

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