Washington Insider -- Wednesday

Trade Conflicts and the Future of American Power

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

Ag Groups Hail New Biotech Disclosure Rule

U.S. agriculture groups are praising the USDA's final bioengineering disclosure standard, arguing the rule strikes the right balance between consumer demand and the needs of farmers and the food industry.

"The rule is a victory not only for consumers who want transparency but for the entire food value chain, from the farmer to food manufacturers," said American Farm Bureau Federation President Zippy Duvall. "It provides clarity to the marketplace so that consumers can make informed decisions on the issues that matter to them, and protects the innovation that is critical to the sustainability of agriculture."

Corn, soybean, and sugar beet grower groups have also weighed in with support for the rule, but several leading food manufacturers worry the National Bioengineered Food Disclosure Standard contains a major loophole that limits the scope of the regulation and confuses consumers.

The main issue at the heart of the divide is whether the rule should cover highly refined oils, sugars and other ingredients made from genetically engineered corn, sugar beet, soybeans and other crops.

The final rule exempts highly refined ingredients, a move hailed by ag interests who argue the end products contain undetectable levels of bioengineered genetic material and are indistinguishable from their non-engineered counterparts.

The rule "recognizes that there are no differences between oils, starches and sugars made from bioengineered or conventional crops," said Richard Gerstenberger, president of the American Sugarbeet Growers Association.

USDA followed the "plain language of the law by requiring disclosure when foods contain genetic material modified via bioengineering, but not when bioengineered genetic material is absent," said John Bode, president and CEO of the Corn Refiners Association. "Appropriately, the regulation does not impose labeling requirements that would mislead consumers."

But the exemption greatly narrows the scope of the rule: some 90% of U.S. corn, canola, soybeans and sugar beet are GE and an estimated 70% of processed foods contain oils, sugars or starches made from GE crops.

In comments submitted on the draft rule, the Grocery Manufacturers Association estimated the exclusion of highly refined ingredients made from GE crops would result in some 80% fewer products covered by the disclosure standard.

Partial Government Shutdown Impacting Tariff Payments And Loans

Direct payments for farmers who have not certified production as part of the Market Facilitation Program (MFP), as well as farm loans and disaster assistance programs, were put on hold beginning this week, and will not start up again until the government reopens.

Food stamp payments for eligible recipients are guaranteed benefits through January. Other feeding programs, including the Women, Infants and Children (WIC) program, which provides food aid and nutrition counseling for pregnant women, new mothers and children, and food distribution programs on Indian reservations, will continue on a local level, but additional federal funding will not be provided.

School lunch programs will continue through February.

Washington Insider: Trade Conflicts and the Future of American Power

As the new year begins, much of the media is focusing on the nation’s longer-term future the impacts of current developments. For example, the Washington Post says that at the halfway point of the president’s term in office his current “political isolation is deepening.”

It’s not just the administration’s domestic agenda that’s facing scrutiny, the Post says. Recently, President Donald Trump received a stinging bipartisan rebuke from Congress over his administration’s embrace of the Saudi-led war in Yemen and the “particularly reckless royal holding power in Riyadh.” Also, the high-profile climate meetings that took place in Poland underscored the extent to which this White House has distanced itself from the international mainstream on environmental policy, and highlighted, yet again, how the rest of the world is plowing ahead in spite of the President, not with him.

Of course, the President came to power promising to be a “disrupter” on the global stage, intent on reforming a post-World War II international order that he thinks had “outlived its usefulness for Americans.” However, the administration’s efforts overseas have unsettled Washington as much as they have disturbed American partners abroad, the Post said.

The focus of the article was efforts by the Atlantic Council, an organization “deeply invested in the furtherance of American leadership,” to push a new set of “principles” to safeguard the “rules-based order,” the euphemism often used to describe something like the status quo crafted by the United States more than half a century ago. The Council wants to “revitalize” and “defend” this order, not just from the rising authoritarian might of China, but in the face of any “nationalist and protectionist agenda.”

At the recent Council forum, speakers warned of the White House’s disregard for “values-based” foreign policy—seen both in the President’s accommodation of figures such as the Saudi crown prince and his “demagoguery” over migrants and refugees coming to the United States. Several speakers argued that U.S. credibility is evaporating among allies.

Jake Sullivan, a former Obama administration official and Clinton adviser outlined what a modern foreign policy ought to look like.

An energized, inspiring, and ultimately successful foreign policy must cut through the administrations “false choice” between globalism and nationalism,” wrote Sullivan. “It must combine the best kind of patriotism and internationalism and reject the “worst kind of nationalism.”

But that’s a tricky needle to thread, the Post says. While the administration has worked to describe the choices of the previous era as supposed obstacles to the American national interest “it also has described itself as at the forefront of a nationalist wave taking control across the world.”

Also, among the Democrats, there’s a burgeoning debate about what kind of counter to “internationalism” ought to be embraced. It is one thing to scorn the “Davos elite,” but it’s another thing to pursue policies that target the power and privileges of influential multinational corporations or question the benefits of free trade and capitalism. It’s sensible to urge American restraint in the Middle East and other geopolitical flash points, but it’s harder to convince official Washington to eschew military entanglements in general.

And though the president and his political rivals may not agree on much, both may succumb to the old temptations of the Cold War.

At the recent Council’s forum, the specter of China loomed over proceedings. Adm. Michael Rogers, a former head of the National Security Agency, feared China could outpace the United States in its cyberwarfare capacities.

That the United States is almost inexorably lurching into a power confrontation with China ought to be a concern, suggested Emma Ashford and Trevor Thrall of the libertarian Cato Institute. “The growing consensus on China is troubling. Having identified China as America’s biggest strategic challenge, neither party has identified a clear goal,” Ashford and Thrall wrote. “Nor have they articulated how a new approach to China would provide a foundation for a broader vision of American foreign policy... The risk of creating a self-fulfilling prophecy on China — through confrontation without purpose — is real.”

Analysts liken the current moment to an earlier era of 19th century politics, when Europe’s industrializing, imperial powers entered into alliances that ultimately convulsed the world into conflict.

“What we are seeing today resembles the mid-nineteenth century in important ways. The post-Cold-War order cannot be restored, but the world is not yet on the edge of a systemic crisis,” wrote Richard Haass, president of the Council on Foreign Relations.

A century ago, that crisis arrived. This time, the current crop of American politicians — President Trump included — can still stave off calamity.

“Now is the time to make sure one never materializes, be it from a breakdown in U.S.-China relations, a clash with Russia, a conflagration in the Middle East, or the cumulative effects of climate change,” Haass continued. “The good news is that it is far from inevitable that the world will eventually arrive at a catastrophe; the bad news is that it is far from certain that it will not.”

So, we will see. The Atlantic Council likely will not find many fans in the administration but many others in Congress and among business groups may be much more attracted. The outcome will be of strong interest to producers, and should be watched closely as this debate intensifies, Washington Insider believes.

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