Washington Insider -- Thursday

Beijing Talks End on Positive Note

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

Wheeler Formally Nominated to Take Over EPA Full Time

The White House announced Wednesday morning that President Donald Trump has formally nominated current acting EPA Administrator Andy Wheeler to take the role on a permanent basis. The action was widely expected as Trump had signaled that late in 2018.

"I am honored and grateful that President Trump has nominated me to lead the Environmental Protection Agency,” Wheeler said in a statement. “For me, there is no greater responsibility than protecting human health and the environment, and I look forward to carrying out this essential task on behalf of the American public.”

With Republicans holding a 53-to-47 margin in the Senate, Wheeler is fully expected to win confirmation. He has run EPA in an acting role since the departure of embattled EPA Administrator Scott Pruitt without any of the issues arising clouded Pruitt's tenure atop EPA and eventually led to his departure.

The Senate Environment and Public Works Committee will hold a confirmation hearing January 16 on Wheeler where Democrats may opt to focus in on Wheeler's time as a lobbyist for the coal industry. “Acting Administrator Wheeler has done an outstanding job leading EPA and is well qualified to run the agency on a permanent basis. I will work with committee members to get him confirmed," Environment and Public Works Committee Chairman John Barrasso, R-Wyo.

Rubio Introduces Bill to Protect Florida Farmers From Mexican Produce Dumping

Sen. Marco Rubio, R-Fla., and two other Florida lawmakers reintroduced legislation last week that would make it easier for Florida growers to petition U.S. authorities to investigate illegal dumping of Mexican fruits and vegetables across the border.

“We must do all we can to ensure a level playing field for Florida’s fruit and vegetable growers,” Rubio said on Jan. 3. “Absent any effective agreement with the Mexican government covering seasonal and perishable produce imports, I’m proud to support this bill to increase opportunities for Florida growers to successfully seek relief from the illegal dumping of Mexican winter produce into our domestic markets.”

The eight-page bill, Defending Domestic Produce Production Act of 2019, was originally developed in September 2018.

Along with Florida Reps. Vern Buchanan, R-Fla., and Al Lawson, D-Fla., Rubio said the bill would ease thresholds for Florida farmers to petition the Department of Commerce and the U.S. International Trade Commission to combat illegal subsidies and marketing of Mexican produce.

It’s not the first time the Florida delegation has raised this issue. Rubio urged U.S. Trade Representative Robert Lighthizer to include language protecting Florida growers in the run-up to the administration’s rewrite of the North American Free Trade Agreement.

However, the language was never added to the agreement reached between the two countries, and later, joined by Canada to create the U.S.-Mexico-Canada Agreement (USMCA).

“Mexico’s dumping into our nation’s agriculture market is problematic, and below-cost produce has put Florida’s farmers at a disadvantage,” Lawson said. “This issue is crippling Florida’s agriculture industry, and the Defending Domestic Produce Production Act will work to protect Florida’s farmers.”

Washington Insider: Beijing Talks End on Positive Note

The administration wrapped up the latest round of trade talks in Beijing and that China “committed to buy more U.S. agricultural goods, energy and manufactured items," the U.S. Trade Representative stated.

The talks concluded after three days with a cautious sense of optimism that the two large economies “might be able to reach a deal that ends their bruising trade war," Bloomberg reported.

The office of U.S. Trade Representative (USTR) Robert Lighthizer said the two sides considered ways to “achieve fairness, reciprocity, and balance in trade relations.” Officials discussed the need for any deal to include “ongoing verification and effective enforcement,” USTR said. The U.S. will decide on the next steps after officials report back to Washington.

President Donald Trump and President Xi Jinping have given their officials until March 1 to reach an accord on key changes to China’s economy on issues such as the forced transfer of American technology, intellectual-property rights, and non-tariff barriers. The USTR statement didn’t say whether progress had been achieved on its main concerns.

Observers told Bloomberg that positions were closer on areas including energy and agriculture but further apart on harder issues.

China was believed to be preparing its own separate statement on the talks.

Still, stocks rose globally after the U.S. and China concluded talks and appeared closer to an agreement, Bloomberg said. All major U.S. equities benchmarks were reported to be rising.

Chinese foreign ministry spokesman Lu Kang said a one-day extension in talks showed both sides are serious about the negotiations. Some disagreements remain on structural issues and they need to be addressed when more senior negotiators meet later on, according to Chinese officials involved in the discussions who asked not to be identified.

Later this month, Lighthizer is expected to meet with Vice Premier Liu He, Xi’s top economic aide who is leading negotiations for China, Bloomberg said. Liu made a brief appearance at the talks in Beijing on Monday, boosting optimism that China was serious about making progress on a deal.

The mid-level talks were the first face-to-face meeting between the two sides since their leaders met last December. Prior to the meeting, China made a number of concessions to U.S. demands including temporarily cutting punitive tariffs on U.S.-made cars, resuming soybean purchases, promising to open up its markets for more foreign investment, and drafting a law to prevent forced technology transfers.

The negotiations were extended from the two days initially scheduled, according to the Chinese. Trump tweeted “talks with China are going very well!” late on Tuesday. The U.S. president is increasingly eager to strike a deal with China soon in an effort to perk up financial markets that have slumped on concerns over the trade war, Bloomberg said. The S&P 500 Index has fallen about 7 percent since Trump and Xi agreed on a 90-day truce at their meeting in Argentina last month.

The negotiations are taking place at difficult moments for both sides and are entangled deeply in domestic and intra-national tensions for each. A key question concerns the main objectives of each. For example, China is widely accused of relying “too heavily” on overseas markets to build its economy, but makes the argument that its future trade market plans are especially important to the nation’s development.

While the negotiators are serious about these talks, the remaining disagreements on “structural issues” are enormously important, extremely sensitive and will be difficult to address as the talks continue. This is a process producers should watch carefully, now and in the future, Washington Insider believes.

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