Washington Insider -- Friday

Farm Bill Complications Continue

Editor's note: There will be no Washington Insider column on Monday, May 28, due to the Memorial Day holiday.

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

US Presses China on Imports Of Ag Goods

President Trump is pushing China to boost its imports of U.S. ag products by $25 billion, a dramatic increase from the current import tally of around $20 billion.

USDA Secretary Sonny Perdue said the two countries would need several years to ramp up trade to that level. USDA has been working on a list of potential ag products that China could purchase, with input from several U.S. ag industry officials who were asked about the topic.

Commerce Secretary Wilbur Ross will bring the shopping list to China when he leads a delegation there to resume trade talks.

USDA’s Foreign Agricultural Service has been “intimately involved” with U.S. trade negotiators and will be included in a delegation headed to China led by Ross, Perdue told reporters. Perdue added that he’d like to see a wider variety of ag exports sent to China, such as rice, corn and poultry. “There's several commodities in that basket that we're capable of selling a lot more to China,” he said.

Another area being targeted by USDA in talks is streamlining biotechnology approvals.

“We’re also looking at non-tariff measures regarding some of the policies and protocols that restrict U.S. products of going in to China. That will be part of the technical discussions as well," Perdue said. Of particular interest are U.S. foods grown using biotechnology, such as those utilizing genetically modified organisms (GMOs).

Commerce Dept. Launches Section 232 Investigation on Automobile Imports

An investigation of whether imports of autos in the U.S. present a national security threat has been initiated by the U.S. Commerce Department, setting up the potential for duties of 25% to be imposed on such imports.

"There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry," Commerce Secretary Wilbur Ross said in a statement. "The Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening our internal economy and may impair the national security."

Imports of passenger vehicles have grown from 32% of cars sold in the United States to 48% over the past 20 years, Commerce said, while from 1990 to 2017, employment in motor vehicle production declined by 22%, even though Americans are continuing to purchase automobiles at record levels. The investigation under Section 232, the same provision used relative to steel and aluminum imports, will focus on whether imports autos and auto parts potentially reduce research, development and jobs for skilled workers in connected vehicle systems, autonomous vehicles, fuel cells, electric motors and storage, advanced manufacturing processes, and other cutting-edge technologies, Commerce said.

Commerce Secretary Ross sent a letter to Secretary of Defense James Mattis informing him of the investigation.

Some observers say Trump’s call is merely a tactic to goad Canada and Mexico into accepting an overhaul of the North American Free Trade Agreement (NAFTA 2.0).

And Senate Majority Leader Mitch McConnell, R-Ky., expressed concern that the potential duties could have on U.S. agriculture.

Washington Insider: Farm Bill Complications Continue

It appears that the House Agriculture Committee is still determined to pass its farm bill in its current form, without Democratic support, Bloomberg is reporting. To do that, committee chair Mike Conaway, Texas will need Freedom Caucus votes but he still lacks a “pledge of support” from that quarter yet, Bloomberg says.

Mark Meadows, R-N.C., chairman of the conservative House Freedom Caucus, told reporters last week that he can’t promise his members will provide the necessary farm bill votes—even if they succeed in forcing a separate vote on unrelated immigration legislation. “We haven’t guaranteed anything,” said Meadows. “We’re still negotiating on immigration.”

The farm bill was defeated 198-213 after 30 Republicans joined all Democrats in opposition. The House conservatives sought to use their votes against the farm bill as leverage to press for action on an unrelated immigration bill, while Democrats objected to provisions in the farm bill that would set new work requirements for food stamp recipients.

“I’m hopeful that whoever leadership is negotiating with will commit to a certain number of yes votes,” House Ag Committee Chairman Mike Conaway, R-Texas, told Bloomberg May 23.

The House deadline to vote on a motion to reconsider the farm bill was extended to June 22 by language attached to the rule governing floor consideration of three bills on the House floor this week.

House Majority Leader Kevin McCarthy, R-Calif., has offered the Freedom Caucus a vote on Judiciary Chairman Bob Goodlatte‘s R-Va., immigration bill — a measure that would provide temporary and renewable status to undocumented immigrants who were brought to the U.S. as children. The immigrants, known as “Dreamers,” would not get a path to citizenship.

“I’m 100 percent confident that we will have some kind of a farm bill by September whether it’s an extension of the existing policy or new policy we will have that in place,” said Meadows. So far, authorizers and leadership are not conceding that an extension might be needed.

The vote on a motion to reconsider doesn’t allow Conaway to make any changes to his bill. If he did, he would have to introduce the measure all over again and return to the House Rules Committee.

“I don’t have any more things to change,” Conaway told reporters. “We’re going to pass [our bill].”

The House bill would reauthorize various commodity, trade, rural development, agricultural research, and food and nutrition programs. Under the current farm law, program authorizations will expire Sept. 30 or at the end of the applicable crop year.

Democrats had opposed additional work and work-training requirements for SNAP recipients in the House bill. But following the original failure of the bill, committee ranking member Collin Peterson, D-Minn., signaled their willingness to reopen bipartisan talks, especially on the Supplemental Nutrition Assistance Program.

Peterson told Bloomberg this week that he hasn’t heard from Conaway regarding any re-negotiation. “It’s not my place to call him, he’s in charge,” said Peterson. “It doesn’t surprise me, given what he’s done so far.”

So, it is too early to estimate what all of this means. There is still a strong sense that a farm bill will pass, but the budget hawks’ opposition to the current Supplemental Nutrition Programs is quite strong, as is Democratic support for the program. In addition, the high level of uncertainty regarding ag export market access under ongoing trade negotiations likely will build-in even greater than usual support for farm safety net programs. Certainly, these are fights that producers should watch even more closely than usual as they proceed, Washington Insider believes.

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN’s Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the US Ag Policy, US Farm Bill and DTN Ag News sections on their News Homepage.

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