Washington Insider -- Monday

AFL-CIO Pushback on USMCA

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

Feds Seize 1 Million Pounds of Pork from China at Newark Port

Roughly 1 million pounds of pork from China were seized by U.S. Custom and Border Protection (CBP) agents at the port of Newark, thwarting an attempt to smuggle the products into the U.S. in more than 50 shipping containers, officials announced Friday in Elizabeth, NJ.

“Agriculture specialists made a critical interception of these prohibited animal products, and stopped them from entering the U.S. before they could potentially cause grave damage,” said Troy Miller, director of Customs and Border Protection Field Operations in New York/Newark.

Bloomberg quoted Anthony Bucci, public affairs specialist at CBP, as saying the pork arrived in more than 50 shipping containers over the past few weeks, hidden in containers of products containing ramen noodles and laundry detergent.

"At this point, it is an ongoing investigation," Bucci told Bloomberg via telephone, noting the agency is also coordinating with USDA on the matter.

The concern is that the pork was coming in from China where African swine fever has impacted the country's hog herd.

Officials said that once the shipping containers have been examined, the confiscated products will be incinerated.

Senators Urge Trump to Prioritize Ag Biotech In US-China Talks

Reforms to China's system for ag biotechnology approvals should be a priority for U.S. negotiators in trade talks, a bipartisan group of 37 Senators wrote in a March 14 letter to President Donald Trump.

The letter was led by Senate Agriculture Committee Chairman Pat Roberts, R-Kan. It urged the president to press China to fulfil commitments to reform its approval process, made as recently as 2017 as part of the Administration’s 100-Day Action Plan of the U.S. – China Comprehensive Economic Dialogue.

The U.S. must continue to press China to implement "a timely, transparent and science-based system for the approvals of agricultural biotechnology products," the lawmakers urged. However, U.S. farmers use of those new technologies "is significantly hindered by delays in China's regulatory system, as producers who seek to access and compete in the global market risk rejection of shipments of grain and oilseeds," the lawmakers wrote.

A recent study conducted by Informa Agribusiness Consulting found China's delayed approvals for genetically modified (GM) crops have cost the U.S. nearly 34,000 jobs, $7 billion in GDP growth and $4.6 billion in wages.

China announced approvals for five GM crops for import – canola, soybean and corn varieties – while talks were underway in January. The move was seen largely as a goodwill gesture. The lawmakers acknowledged those recent "limited approvals" but noted China has yet to make any "systemic changes to their regulatory system." Systemic reforms, not just piecemeal approvals, are needed "to provide the predictability upon which U.S. producers, technology providers and exporters rely," the lawmakers argued.

The letter drew plaudits from the Biotechnology Innovation Organization (BIO), which has also urged Trump to press the issue of approvals during talks. BIO thanked Roberts and Senate Agriculture Committee Ranking Member Debbie Stabenow, D-Mich., – who also signed the letter – "for underlining how China’s broken regulatory framework for agriculture biotechnology is hindering U.S. innovation and holding back American farmers, companies, and exporters."

Washington Insider: AFL-CIO Pushback on USMCA

The AFL-CIO said last week that it would oppose congressional passage of President Trump's U.S.-Mexico-Canada Agreement on trade if Mexico doesn't first change its labor laws to conform to the deal.

"[T]he current draft of the new NAFTA recognizes [that] Mexico must enact and fully and effectively implement reforms to its labor law ... This must happen before Congress takes up any new NAFTA deal. But if the Administration insists on a premature vote on the new NAFTA in its current form, we will have no choice but to oppose it," the labor group told the Washington Examiner.

The labor federation's statement echoes complaints from Democratic lawmakers that the deal, which would replace the North American Free Trade Agreement, lacks enforcement mechanisms.

The Trump administration is currently trying to build congressional support for the deal, which it hopes to get passed by this summer. U.S. Trade Representative Robert Lighthizer met privately with the House Democratic Caucus in midweek to answer questions about it. An individual with knowledge of the meeting said it was "largely positive" but that "a lot of questions remain, especially on the labor standards question."

A key provision of the deal requires Mexico to set the average wages for factory workers at the equivalent of $16 an hour, a move that would make locating factories in Mexico much less attractive to manufacturers. However, it is unclear how many workers would be affected by the requirement, prompting concern from critics like the AFL-CIO that Mexico will wiggle out of it.

"As a threshold matter, any congressional consideration of [USMCA] must wait until Mexico has enacted and fully and effectively implemented labor law reform," the labor federation said.

Mexico's ambassador to the U.S., Martha Barcena, said last month at a DC forum on USMCA that her country was "very and totally committed to amend the labor laws," and that the current administration was just "waiting for the debate to take place" in Mexico's legislature, the Congress of the Union. She did not indicate when that would happen.

The AFL-CIO also criticized the deal for preserving patent protections for drugmakers and lacking an effective monitoring system for its rules.

Bloomberg also reported the federation’s vote to oppose the deal and concluded that “it remains to be seen whether the opposition from the labor group will fuel a big enough backlash to the updated NAFTA deal to force changes to the text.

One political legal observer told Bloomberg Law in November that the labor community’s relative silence at that point could translate to an endorsement of the trade agreement, but that’s no longer the case.

“The AFL-CIO does not have to offer a ringing endorsement of USMCA,” Edward Alden of the Council on Foreign Relations said at the time. “It just has to not oppose it.”

The Council’s NAFTA text emphasized the lack of targeted improvements in labor enforcement in the proposed deal and noted that “an effective enforcement mechanism must have mandatory monitoring and reporting, assurance that action will be taken promptly when violations occur, and, critically, an avenue by which workers can intervene when governments lack the will to act.”

U.S. unions have long asserted that Mexico’s lax labor laws undercut American workers’ wages and job security. Labor leaders have also contended that Mexican facilities establish sham unions that negotiate management-friendly contracts while preventing authentic organizing bids.

Numerous U.S. plant closings have reminded labor leaders of the realities of international trade, Bloomberg noted but also said that the new NAFTA wouldn’t have prevented the recent outsourcing of jobs at General Motors and Carrier to Mexico.

The positioning by the AFL-CIO came at the same time as congressional Democrats announced that they would be more actively pursuing worker-friendly trade policies.

The New Democrat Coalition, a caucus of 101 House Democrats, also released the goals of its Trade Task Force last week which included modernizing “outdated agreements, reasserting Congress’ involvement in tariff policy, and promoting a competitive workforce.”

Trade debates are a difficult venture, Rep. Ron Kind, D-Wis., said. “Finding a landing zone for our nation’s trade policy, and specifically the USMCA, will require the Administration to continue working with the New Democrat Coalition and the larger caucus to ensure all Members are heard and have outstanding concerns resolved,” the congressman said.

Clearly, there is growing attention to trade policies and trade issues — along with concerns producers should watch closely as these negotiations continue, Washington Insider believes.

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