Washington Insider -- Wednesday

Biodiesel Market in EU Opens for US Soybeans

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

Biodiesel Market in EU Opens For US Soybeans

The European Commission (EC) confirmed that U.S. soybeans meet the technical requirements to be used in biofuels within the European Union (EU) and has formally recognized the plan until July 1, 2021. “Renewable energy is the future of Europe, and it is important that any biofuels put in the market respect the high sustainability standards we want for our renewables,” according to the European Commission. “By submitting the request for recognition, the U.S. has shown that it is ready to play by the rules.”

Conservation practices required for U.S. soybean production meet EU sustainability standards, and biodiesel produced from documented soybeans can now be used in the EU, the EC formally announced. The EU requires biofuels to meet a set of sustainability criteria outlined in its Renewable Energy Directive (RED). The U.S. soy industry has its own sustainability guideline, the Soybean Sustainability Assurance Protocol (SSAP) that, with the EC announcement, the EU acknowledges meets its rigorous RED requirements.

The authorization can be extended beyond 2021 if the plan puts in place the changes regarding the sustainability criteria in line with the requirements of the new revised Renewable Energy Directive, adopted last year for the period 2021-2030. The U.S. is required to notify to the Commission all changes it aims to apply to the certification procedures and the Commission may repeal its decision if the scheme is not correctly implemented, if it fails to submit annual reports or if it does not introduce improvements that may be set out in the future.

The new renewable energy framework, agreed to last July, includes a binding renewable energy target for the EU for 2030 of 32% with an upwards revision clause by 2023.

The U.S. today accounts for 75% of EU soybean imports and the country has positioned itself as Europe’s main supplier ahead of Brazil.

USDA Names Stalled Nominees to Non-Senate-Confirmed Positions

USDA announced Monday that it has put three nominees for positions that require Senate confirmation into roles that do not need Senate approval. USDA said that it has selected Mindy Brashears as Deputy Undersecretary for Food Safety, Naomi Earp as Deputy Assistant Secretary for Civil Rights, and Dr. Scott Hutchins as Deputy Undersecretary for Research, Education, and Economics.

Brashears was nominated for Undersecretary for Food Safety; Earp was nominated for Assistant Secretary for Civil Rights; and Dr. Hutchins was nominated for Undersecretary for Research, Education, and Economics.

Their nominations won approval from the Senate Ag Committee, but were not acted on by the full Senate before it adjourned. The administration has nominated the trio for their roles again, but no action has been taken as of yet.

The positions the three are now serving are lower-level positions and do not carry the same authorities as the roles they are awaiting Senate confirmation for.

Washington Insider: Debating Border Protections

Almost everyone has at least one eye on the negotiations in Congress that aim to craft a compromise over border security. Bloomberg notes that the lawmakers involved are more used to cutting deals than taking hard-edged positions on immigration and takes that as a “sign that leaders of both parties are in no mood for another shutdown.”

Still, President Donald Trump will need to sign off on any final agreement and, at least in public, his pronouncements indicate he’s insisting on the proposed $5.7 billion for a wall at the U.S.-Mexico border.

House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Mitch McConnell, R-Ky., who’ll be directing negotiations behind the scenes, picked 17 spending panel members well versed in the art of compromise, Bloomberg thinks.

The House-Senate conference committee will convene today to start negotiating a Homeland Security spending bill for the rest of fiscal 2019.

They aim to draft a compromise on border security that can get Trump’s signature and clear the way for Congress to pass six other spending bills to fund the rest of the departments and agencies affected by the shutdown until Oct. 1.

Leaders in both parties are setting early sights on a pared-down deal that probably won’t include big immigration law changes such as future citizenship for undocumented immigrants. It also is expected to focus on fencing rather than a wall, Bloomberg says.

In the meantime, the President has accepted speaker Pelosi’s invitation to deliver this year’s State of the Union address on Feb. 5, after the speech was delayed a week because of the government shutdown battle. “We have a great story to tell and yet, great goals to achieve!” Trump wrote Pelosi earlier this week. “I look forward to seeing you on the 5th.”

There is a great deal of other business underway now, as well. For example, the Senate advanced legislation 74-19 that would impose sanctions on Syria more than a month after president Trump said he would withdraw American forces from the conflict there. Democrats voted three times to block the measure during the five-week partial government shutdown, saying they wouldn’t agree to consider it until the agencies reopened.

The measure would direct the administration to impose sanctions on entities that do business with the government of Syrian President Bashar al-Assad, such as selling petroleum products or aircraft parts. House Foreign Affairs Chairman Eliot Engel, D-N.Y., introduced a stand-alone Syria sanctions bill in the House that was passed by voice vote last week.

The Senate measure also would let state and local governments refuse to do business with anyone who boycotts Israel. Sen. Dianne Feinstein, D-Calif., has said that while she supports Israel, she opposes the anti-boycott measure as a violation of the Constitution’s protection of free speech.

In the area of ag policy, Senate Agriculture Committee Chair Pat Roberts, R-Kan., announced on Monday that he is in the beginning stages of crafting a new Child Nutrition Act, which governs the National School Lunch Program. “If Congress is to pass a new child nutrition bill this year, we’ll need to have all parties come to the table with solutions to these challenges…not just politics and rhetoric,” Roberts said at the National School Boards Association Advocacy Institute.

A Senate child nutrition bill won committee approval in January 2016 but advanced no further. Roberts and Senate Agriculture Committee ranking member Debbie Stabenow, D-Mich., have signaled interest in getting the measure passed.

Bloomberg also noted that the deadline for the U.S. escalation of tariffs on $200 billion of Chinese goods if no breakthrough deal on trade relations is reached is nearing. Following a round of negotiations in Beijing in early January, Chinese Vice Premier Liu He has arrived in Washington for what the White House is describing as “very, very important” talks this week. President Trump is expected to meet Liu, according to Treasury Secretary Steven Mnuchin, who is also going to take part in the negotiations this week.

A delegation of Chinese officials including central bank governor Yi Gang, the deputy chief of the nation’s top economic planner Ning Jizhe and the deputy ministers from the government departments that oversee industrial policy, agriculture and treasury, are accompanying Liu.

Even as the U.S.-China negotiations get underway, the U.S. moved forward with criminal charges against Huawei, China’s largest technology company, alleging it stole trade secrets from an American rival and committed bank fraud by violating sanctions against doing business with Iran.

Huawei has been the target of a broad U.S. crackdown, including allegations it sold telecommunications equipment that could be used by China’s Communist Party for spying. The charges filed this week also mark an escalation of tensions between the world’s two largest economies, which are mired in a trade war that has roiled markets, Bloomberg noted.

The talks in the budget committee conference likely will top the news agenda for the time being since the long recent shutdown has left a dramatic impression on the US political consciousness. Certainly, these efforts at compromise are of key importance to producers and should be watched closely as they proceed, Washington Insider believes.

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