Washington Insider -- Monday

By DTN's Washington Insider

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

China Won't Challenge WTO Ruling on Domestic Producer Supports

While China expressed disappointment at the decision by the WTO that their supports to domestic wheat and rice producers did not meet their WTO commitments.

The WTO ruling "once again highlights the unfair treatment suffered by developing members with regard to the WTO rules on agricultural subsidies," the Chinese stated.

But, in a surprising turn, China announced it would not file an appeal in the case, a Geneva trade official said. China's decision paves the way for the decision to be adopted, which would then require China to implement changes in a "reasonable" period of time or compensate the U.S. for continued non-compliance.

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EPA Rejects Comment Period Extension on E15 Proposal

EPA received two requests to extend the comment period beyond April 29 on its proposed rule to allow year-round sales of E15 rule and to make reforms to the Renewable Identification Number (RIN) market regulations – one from the National Wildlife Federation and one from the American Petroleum Institute.

But EPA has rejected the requests, saying the agency "continues to believe that the current 39-day comment period is appropriate and therefore is denying the request for an extension of the comment period."

EPA said in denying the requests that the "regulatory modifications detailed in this proposal are necessary to finalize by the start of the summer driving season on June 1 and extending the comment period would hinder the Agency's ability to make a decision in a timely manner."

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Washington Insider: Storm Aid Battle Intensifies

The head of the Federal Emergency Management Agency sided with Republicans in a bitter congressional dispute over the amount of government assistance that should be made available for rebuilding Puerto Rico. FEMA’s head said “it wouldn’t be good for the island if Washington paid the full cost for recovery efforts after Hurricane Maria.”

Pete Gaynor, FEMA’s acting administrator, said Friday that “repairing the damage from Hurricanes Irma and Maria in 2017 will be faster and more efficient if Puerto Rico continues to shoulder some of the cost. That gives the island an incentive to ensure the work is done properly.”

“If you don’t have skin in the game, then it’s not in anyone’s best interest,” Gaynor told the press. As long as the island maintains responsibility for part of the price, he said, “then everyone’s a winner. And it’s in their interest to do it as quickly as possible.”

Congress has been at odds for some time now over a major disaster relief supplemental spending bill to fund a wide range of flooding, wildfire and hurricane recovery. The main dispute concerns how aid to Puerto Rico should be handled. President Trump has accused Puerto Rico of squandering past aid and he told Republicans he opposes more money for the island.

Bloomberg is reporting that the dispute is becoming increasingly bitter. The House in January passed a bill that would increase the federal government’s share of Puerto Rico’s disaster funding to 100 percent from 90 percent for most types of projects, while also providing a $600 million funding boost to its nutrition assistance program. That bill stalled in the Senate.

Republicans and Democrats have also sparred over the actual cost of increasing the federal government’s share of Puerto Rico disaster aid. Democrats say that the 100 percent match would cost about $400 million based on current allocations of recovery money. Republicans have focused on long-range estimates that the provision would end up costing $5 billion.

The House plans to vote the week of May 6 on a $17 billion version of its bill that also contains more funds for recent Midwest floods. The House is expected to pass the measure but there is no sign the standoff between Democrats and Republicans in the Senate on the bill will end anytime soon.

"Hurricane Maria was one of the deadliest and most destructive storms in American history, and the severe effects of the hurricane are still lingering,” said Evan Hollander, the Democratic spokesman for the House Appropriations Committee. “Attacking struggling Puerto Ricans with baseless claims that they aren’t doing enough to help their own recovery is insulting.”

Gaynor defended his agency’s efforts in Puerto Rico, saying that FEMA has almost 3,000 employees working on recovery from Irma and Maria. He added that since the beginning of the year, FEMA has obligated an average of $50 million a week to the island.

Still, he said he understood the island’s concerns about the pace of recovery.

“It’s probably fair that it’s not moving fast enough,” Gaynor said. “When you’re a disaster survivor, or whether you’re the governor of any state, you want recovery to happen as fast as possible. I fully understand that.”

Gaynor said the extent of the devastation on the island makes recovery more difficult.

“Part of our challenge is the scale of destruction and damage in Puerto Rico,” Gaynor said. “We’re trying to rebuild infrastructure that took 50 years to build.”

These funding questions are sure to come up when Gaynor testifies before the House Appropriations Committee on tomorrow.

“We are fully invested in Puerto Rico,” Gaynor said. “We don’t want to fail at recovering Puerto Rico, because it’s not good for Puerto Rico residents or the government. And it’s definitely not good for FEMA or the federal government.”

So, the current proposal is big and complex, and contains much needed aid for large numbers of producers and others. Assistance to ag, especially in the Midwest, is by far the largest component. Even so, it is not clear what the eventual outcome of the current standoff will be. This certainly is a battle producers should watch closely as it proceeds, Washington Insider believes.

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