Washington Insider -- Monday

By DTN's Washington Insider

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

NAFTA 2.0 Framework Deal Soon: Lighthizer

The Trump administration is hopeful it can reach agreement "in principle" in the NAFTA 2.0 talks "in the next little bit," U.S. Trade Representative Robert Lighthizer told CNBC. "I’m hopeful," he said Wednesday. "If there’s a real effort made to try to close out and to compromise and do some of the things we all know we should do, I’m optimistic we can get something done in principle in the next little bit." Lighthizer also noted what others continue to point out – there's a “short window” to clinch a deal because of “elections,” a presidential vote in Mexico in July and U.S. midterm congressional elections in November and there are also provincial elections in Canada on tap. But Canada’s chief negotiator cautioned that much work remains and that it is not clear what such a deal would look like, adding the country has not yet been formally invited to the next negotiating round.

“We have yet to see exactly what the U.S. means by an agreement in principle,” Steve Verheul said Wednesday in Ottawa. The U.S. hasn’t proposed a framework agreement yet, he said. “And if we are going to achieve that we would clearly require some considerable flexibility in U.S. positions, in order to be able to obtain that, as would Mexico."

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USTR Issues Annual Report On Foreign Trade, Investment Barriers for US Exports

Foreign trade and investment barriers faced by U.S. exports were detailed in the 2018 edition of the Office of the U.S. Trade Representative's (USTR) annual National Trade Estimate (NTE) report, released March 30.

The report primarily takes inventory of trade policy developments over the previous year and breaks down trade barriers by country or trading bloc. In all, 64 countries, customs territories and regional associations, and all 20 of the United States’ free trade agreement (FTA) partners are covered by the NTE.

The trade policy moves and outcomes detailed in the 2018 NTE are consistent with President Donald Trump's pledges to promote "fair and reciprocal trade for American farmers, ranchers and manufacturers," along with "enforcing trade laws and holding our trading partners accountable," a report factsheet said.

"The President is fully committed to addressing unfair foreign trade barriers through tough enforcement and the negotiation of new agreements that increase U.S. exports and support high-paying jobs for all Americans,” said USTR Robert Lighthizer. "We will use every available tool to ensure Americans are treated fairly."

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Washington Insider: USDA's Shift in Biotech Regulation

Bloomberg is reporting this week that there is a “recent commitment” from USDA to keep a new wave of genetically engineered products out of regulators’ hands—and that this has agriculture biotechnology companies and plant breeders “hoping the move will influence countries around the world.”

The department says it has no plans to regulate advanced breeding techniques that achieve the same results as traditional techniques, only faster, USDA Secretary Sonny Perdue announced last week.

His statement is not surprising, Bloomberg says. USDA already has said as much to individual companies hoping to bypass the regulatory hurdles that genetically modified organisms have gone through since the 1990s.

Secretary Perdue called his statement a “public clarification” that products that undergo gene editing or advanced breeding technologies don’t require the same oversight as traditional GMOs—where scientists take genes from one species and insert them into another. USDA sees this as a strong statement to other countries looking into how to regulate these new crops, company representatives, scientific researchers, and trade associations, Bloomberg said.

“We’re pleased that the USDA is clarifying its position, which should send a message to other countries that look to the U.S. for its expertise and guidance,” said Doug Cole, spokesman for potato company J.R. Simplot Co. The company sells a type of russet potato that was engineered to resist bruising and produce lower amounts of acrylamide, a possibly carcinogenic compound, when fried. The company is now working to breed their potato with wild varieties, Cole said.

At least five countries—Colombia, Canada, Australia, New Zealand, and Norway—are developing policies on whether, and how, to regulate these new forms of genetic engineering, according to USDA’s Animal and Plant Health Inspection Service, which regulates biotechnology products. Argentina, Brazil, Chile, and Israel already have implemented policies.

The European Commission has avoided a clear policy to date but the European Court of Justice is considering a legal case regarding mutagenesis, a technology that modifies certain genes for a desired outcome. And, given EU’s opposition to anything including GMOs, observers suggest that it is unlikely that that organization will be thrilled by this new U.S. policy and the future pressures it implies for the EU in the future.

Clarity matters to public and private plant breeding centers that depend on international certainty to make research investment decisions, Bethany Shively, spokeswoman with the American Seed Trade Association, told Bloomberg. However, it remains to be seen what level of anxiety and activity will now emerge from anti-GMO activists in the United States—certainly, new pushback efforts to turn USDA’s new policy around can be expected.

Unlike the first wave of genetically modified products, including corn engineered with a bacterium to control pests or soybeans that resist herbicides, the newest crops are not made by introducing foreign genes from other species. Technologies like CRISPR-Cas9 and transcription activator-like effector nucleases allow scientists to modify a plant’s existing genome, rearranging strands of DNA or shutting off certain genes to achieve desired results quicker than through traditional breeding.

Canadian biotechnology company Okanagan Specialty Fruits developed apples that don’t brown when exposed to air by “silencing” the genes that make the fruit turn color, for example. This technology is low-risk, although environmental groups have questioned that claim and said there is not enough research to ascertain its safety. Bloomberg noted that USDA approved the sale of the apples in 2015.

Still, there is resistance to the new policies. For example, “these new technologies could carry the same risks posed by older, transgenic GMOs,” according to Bill Freese, a science policy analyst with the nonprofit Center for Food Safety. The problems don’t arise from one particular technology over another, but from the application of that technology—whatever that means.

“I really think that USDA is trying to get out of this business of regulating any GMOs,” Freese told Bloomberg. He thinks stricter regulation is needed to prevent GMO-triggered problems like herbicide-resistant weeds and crop injury from herbicides drifting to unintended fields, he added.

In his recent announcement, Perdue said the USDA would not regulate plants that otherwise could have been developed through traditional breeding techniques as long as they are not plant pests or developed using plant pests.

“With this approach, USDA seeks to allow innovation when there is no risk present,” Perdue said. “At the same time, I want to be clear to consumers that we will not be stepping away from our regulatory responsibilities. While these crops do not require regulatory oversight, we do have an important role to play in protecting plant health by evaluating products developed using modern biotechnology.”

Still, it is unlikely that the GMO wars are over, since they seem to rest on opposition to social concerns regarding corporations, the general use of science and the ability to control consumer information, rather than actual hazards to health. Also, the new USDA policy likely will not change the rules for organic certification, and could even increase the gap between the cost of organic and other products. Thus the food science fight is yet another battle producers should watch, Washington Insider believes.

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