Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.EU Warns It Will Cut Soybean Imports if US Imposes Tariffs on Cars
The European Commission has warned President Donald Trump that the bloc will step back on its commitment to buy more American soybeans if he introduces punitive tariffs on European Union (EU) cars.
Visit by Jean-Claude Juncker, President of the EC, and Cecilia Malmström, Member of the EC, to the United States of America, July 2018
The U.S. Commerce Department has delivered its guidance on whether car imports pose a threat to U.S. national security that justifies import taxes, giving Trump 90 days to decide whether to impose them.
European Commission Jean-Claude Juncker reacted to the news by saying that Trump has promised him not to damage trans-Atlantic trade with such measures during a summit in Washington last summer.
“Trump has given me his word that there will be no car tariffs for the time being,” Juncker told the German newspaper Stuttgarter Zeitung.
“I believe him,” he added. “However, should he renege on that commitment, we will no longer feel bound by our commitments to buy more US soya and liquid gas.”
Commission spokesperson Margaritis Schinas also stated that if the U.S. goes ahead with “actions detrimental to European exports”, the EU executive “would react in a swift and adequate manner.”
Over the weekend, German Chancellor Angela Merkel said American authorities appeared to have already concluded that European cars represent a national security threat.
Merkel noted that if cars produced in German automaker BMW’s largest factory in South Carolina “are suddenly a threat to the United States’ national security, that startles us.”
Trade Tensions Weighing On Global Trade Growth: WTO
Escalating trade tensions are a key factor that is producing a slowing of global trade growth, according to the World Trade Organization (WTO).
The latest update of the WTO's World Trade Outlook Indicator (WTOI) came in at 96.3 as of December 2018, the lowest mark for the index that analyzes several principal drivers of trade. A WTOI reading of 100 represents baseline growth on par with the medium-term trend, while readings above or below that represent faster or slower than trend global trade growth.
Weakness in the overall index was attributed to "steep declines" in most component indices, WTO said. "Indices for export orders (95.3), air freight (96.8), automobile production and sales (92.5), electronic components (88.7) and agricultural raw materials (94.3) have all fallen below trend," it noted. Only the container port throughput index remained on trend with a reading of 100.3.
Index values were lower year-over-year for all WTOI components, with the biggest declines seen for electronics, down 12.9 points, and automobile production and sales, down 10.3 points. Meanwhile, the ag raw materials index was down 5.1 points, year-over-year, with declines at or just under one point per month seen for October through December.
Trade turmoil is the key issue weighing on global trade growth, according to WTO. The almost-across-the-board index declines "should put policy makers on guard for a sharper slowdown should current trade tensions remain unresolved," the trade body warned. "Conversely, greater certainty and improvement in the policy environment could bring about a swift rebound in trade growth."
The U.S.-China trade war is perhaps the biggest present drag on global trade, with the two sides actively engaged in talks aimed at averting further escalation. The outcome of those negotiations remains uncertain with some signs that a final deal may still be a ways off.
Washington Insider: Rep. DeLauro Hits FDA Delays in Water Quality Enforcement
Finding and fixing water quality problems for leafy greens is one of the industry’s major problems, but leaders at the Food and Drug Administration (FDA) charged with implementing the Food Safety Modernization Act (FSMA) knew that all along, Food Safety News is reporting this week.
As a result, they decided to allow “more time for education and training” for the new rules. The original 2018 compliance date for the FSMA water quality standards was pushed back to 2022 and FDA called in 45 state agricultural departments to help get growers and others in the food supply chain up to speed.
But this week, after FDA released embarrassing findings from its investigation into last year’s E. coli outbreak linked to romaine lettuce, “the agency learned its patience has a price,” FSN says. One of the authors of the Food Safety Modernization Act who is still a congressional leader on food safety, Rep. Rosa DeLauro, D-Conn., let FDA know “she’s seen enough delay.”
“The FDA’s investigations into last year’s romaine lettuce recalls have confirmed what we already knew to be true: dirty irrigation water contaminates produce and makes people sick. The fact that people are dying and lives are being destroyed while the FDA caves to big corporate interests is unconscionable,” she said.
She also called on FDA to “take its own findings to heart and implement science-based standards to test irrigation water. Eight years after the Food Safety Modernization Act was signed into law, it is long past time these important rules went into effect — not delayed into the next decade. Enough is enough,” she said.
DeLauro’s criticisms are important to FDA and the food industry since she chairs the Congressional Food Safety Caucus and is a senior Democrat on the Agriculture Appropriations Subcommittee which has jurisdiction over funding and oversight of the FDA. She charges that the FDA has actually has done little “to advance real actions that would prevent food outbreaks in the first place,” FSN said.
DeLauro noted that investigators positively identified the outbreak strain in the sediment of an irrigation reservoir on the implicated farm in Santa Maria in Santa Barbara County, Calif.
“These findings build upon FDA’s Environmental Assessment into last year’s E. coli outbreak linked to romaine lettuce produced in the Yuma growing region. That investigation also positively identified the outbreak strain in contaminated irrigation water, which was found in three separate locations along an irrigation canal used by multiple farms. Together, both outbreaks resulted in 272 illnesses, 121 hospitalizations, and 5 deaths” the congresswoman said.
Despite scientific evidence that contaminated agricultural irrigation water poses serious risks to produce safety, the FDA is continuing to delay implementation of the Produce Safety Rule’s testing requirements of agricultural water under the FSMA. The original compliance date was set for 2018. However, under current policy, FDA will not begin any enforcement of the water testing rules until at least 2022.
DeLauro has a strong reputation as a well-informed, formidable critic of federal agencies, as well as of industry safety problems. She has made the case for some time that one of the food industry’s key areas of vulnerability is water quality, so the FDA’s willingness to move fairly slowly to shore up protections against a similar outbreak like those that hammered the industry last year is somewhat surprising. Certainly food safety is of vital importance to producers and this FDA-DeLauro fight is one that should be watched closely as it intensifies, Washington Insider believes.
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