Washington Insider - Wednesday

Struggling to Avoid a Government Shutdown

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

Mixed Signals on Argentina Pursuing WTO Case On US Biodiesel Duties

Conflicting reports are surfacing on whether Argentina is pursuing a complaint at the World Trade Organization over U.S. duties placed on imports of biodiesel, with Argentina's new ambassador providing the source of uncertainty.

The prospect of Argentina pursuing a WTO has been floated since the U.S. process started relative to potentially imposing duties on imports of biodiesel from Argentina and Indonesia.

As for filing a complaint at the WTO, Argentina's new ambassador to the U.S. Fernando Oris de Roa told Infobae in an interview released January 15, "Yes, but this way does not prevent to look for a new agreement between the parts."

However, in a separate interview with El Cronista released today (January 16), Oris de Roa said that the country was not yet taking the WTO route. "We are not going to go for the moment. But we preserve the right to go," he said. "To dismiss it would be absurd. We are not going to abandon the struggle to find a reasonable tariff again. But you have to meta-position yourself about the obstacle. They are abusive tariffs, it is true." He also noted the country was still going to pursue finding a solution to the situation, something Argentina has signaled for several months.

Meetings between the U.S. and Argentina have been held on the import duties, but so far, no resolution has been reached. It is not clear what the status of any negotiations is at this stage.

USDA Move on Mexico Pork Imports Came With Little Feedback

Mexico has now been determined to be free of classical swine fever (CSF), a move which follows a global acknowledgement in 2015 and a proposal by the U.S. make the same decision and came after no opposition from the U.S. pork industry.

In August 2016, USDA's Animal and Plant Health Inspection Service (APHIS) proposed declaring Mexico free of CSF and a notice published in the Federal Register today (January 16) finalizes that situation.

USDA in mid-2014, had proposed to recognize all Mexican states other than nine that previously were CSF free and the state of Chiapas as a low-risk CSF region – APHIS did not recognize Chiapas as being CSF free.

However, in February 2015, Mexico received notice from the World Organization for Animal Health (OIE) that Mexico was now recognized as being CSF free. Mexico subsequently requested the U.S. halt its rule-making process and instead continue to evaluate Mexico as being CSF free. APHIS agreed to reevaluate its findings, incorporating those from a 2015 APHIS site visit report, along with updated surveillance data and other information submitted by Mexico.

After that evaluation, APHIS determined "CSF is not present in Mexico and that live swine, pork, and pork products may safely be imported into the United States from Mexico" provided they meet conditions spelled out in U.S. regulations.

Washington Insider: Struggling to Avoid a Government Shutdown

Bloomberg is reporting this week that Republican congressional leaders are struggling to separate the immigration blow-up from a funding bill to avert a U.S. government shutdown at the end of this week.

Democrats, of course, say the burden is on Trump to help break the stalemate after he rejected a bipartisan proposal to shield young, undocumented immigrants from deportation and ignited outrage by reportedly disparaging Haiti and African nations. Democrats want to attach such an immigration measure to the must-pass spending bill, an idea House Speaker Paul Ryan, R-Wis., and Senate Majority Leader Mitch McConnell, R-Ky., reject.

“No, we’re not going to do that," Ryan said Friday during an event in his home state of Wisconsin. "People are attaching these as far as leverage is concerned," but Republican leaders won’t go along, he said.

Government funding runs out at the end of the day Friday, and Republican leaders are weighing another short-term measure that would extend it until Feb. 16, a person familiar with the negotiations said.

Trump blamed Democrats in Twitter postings Tuesday. Arguing that, “We must have Security at our VERY DANGEROUS SOUTHERN BORDER, and we must have a great WALL to help protect us, and to help stop the massive inflow of drugs pouring into our country!”

Both parties have struggled for months to agree on a spending deal for the rest of the fiscal year that began Oct. 1, and Congress already has had to pass three short-term funding bills. Democrats want to use the next attempt to keep government operations funded as a vehicle for other bills to provide disaster-relief funds, shore up Obamacare, extend the Children’s Health Insurance Program, and protect young immigrants brought to the U.S. illegally as children. A dispute over how much to allocate to defense and domestic programs also has been an obstacle to a broader fiscal agreement.

GOP leaders don’t expect to have enough time to write a fiscal year spending bill even if they get a breakthrough in negotiations this week, Bloomberg says.

Senate Democratic leader Charles Schumer will have to decide whether this is the moment to force a showdown on immigration that results in a partial government shutdown in an election year.

Republicans’ slim 51-49 Senate majority means they need at least nine Democratic votes to pass a spending bill. The GOP is counting on support from some Democrats, including from among the 10 who are up for election in November in states won by Trump.

Democratic Senator Joe Manchin of West Virginia, who is on the ballot in November and who voted with Republicans to help keep the government operating with a stop-gap measure in December, said he has little desire to see a shutdown. He said he remains confident that some kind of deal on immigration can be worked out before it comes to that.

Republicans have a wider majority in the House -- they hold 239 seats in the chamber and 218 are needed to pass a bill. But even there, GOP leaders are working with a thin margin.

Meanwhile, some House conservatives, including those in the Freedom Caucus, are threatening to withhold their votes on a stopgap continuing resolution to protest rising spending levels or to force an increase for defense.

“If it’s just a yes or a no on a CR, I would be a no,” said Representative Warren Davidson, R-Ohio, a Freedom Caucus member. But he said he doubts there will ultimately be a shutdown.

“I don’t know anyone who truly wants the government to shut down,” Davidson said on a conference call with reporters.

The immigration talks were set back Thursday when Trump sided with Republican immigration hardliners and rejected a plan negotiated among a small group of Democratic and Republican senators. The proposal, presented by Senators Dick Durbin D-Ill., and Lindsey Graham, R-S.C., during an Oval Office meeting with a group of lawmakers, combined border security and immigration-law changes--sought mainly by Republicans--with a measure to permanently shield an estimated 800,000 undocumented immigrants brought to the U.S. as children from deportation.

The furor over the president’s reported remarks about why the U.S. accepts immigrants from undeveloped countries like Haiti, El Salvador and African nations rather than places like Norway has hardened positions on both sides. Trump has denied using those exact words, which were confirmed by three people briefed on the exchange.

Durbin and Graham are seeking more sponsors for their compromise plan in an attempt to force a vote and additional discussions are expected later this week.

So, we will see. It seems that almost nobody wants a shutdown, but nobody wants to back away from the confrontation. Clearly, this is a fight producers should watch closely as it proceeds, Washington Insider believes.

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