Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.NMPF Downbeat on Prospects For Immigration Reform In The Near-Term
Despite continued calls for immigration reform from the ag sector, prospects for any legislation to clear Congress in the near-term remain dim, officials with the National Milk Producers Federation (NMPF) told reporters this week.
"I think it's going to be a challenge to get a bill through this environment. Given the politically charged nature of the issue is we approach a presidential election year," said NMPF President and CEO Jim Mulhern. Officials from several ag groups, including NMPF, are set to discuss the issue in a White House meeting this week, "so we may know more later," he added.
The window for lawmakers to coalesce around legislation before next year's elections is rapidly closing, noted NMPF Vice President for Government Relations Paul Bleiberg. A reform package "would have to be done in a relatively short period of time," likely "this year rather than next," in order to stand a chance of passage, he said.
US Ag Trade Officials Unable To Shed Light On Trump Tweets About Mexico Buying More US Ag Goods
USDA Undersecretary for Trade and Foreign Agricultural Affairs Ted McKinney and U.S. chief Ag Trade Negotiator Gregg Doud were both asked during a Tuesday hearing about the statements by President Donald Trump about "big" and "immediate" Mexican buys of U.S. farm commodities in the wake of the U.S.-Mexico agreement on immigration last week.
"I do not have any details to that regard," Doud said. McKinney indicated he had nothing to add except that "we have got things in line if they are serious about wanting to make some immediate purchases." He later suggested Trump was referring to a return to normal growth in U.S.-Mexico trade without tariffs in the way. "We do anticipate exactly what the president said in terms of restored, new, reinvigorated sales to Mexico," the McKinney noted.
Rep. Angie Craig, D-Minn., started the line of questions and said it "seems odd that the president has made this announcement and has yet to tell" two of his chief agriculture and trade officials. "So is the president promising additional purchases without that being true, or has [USDA and USTR] just not been told yet what the president is promising?" she asked.
Washington Insider: The Increasingly Complicated Trade Fight Implications
Bloomberg worked this week to drill down into some of the implications of a "new Cold War" that splits the globe into U.S. and Chinese technological zones and says this might lead to a new "digital iron curtain" that separates the globe — with implications for third countries like England.
It describes an area in the UK that has a "gleaming" Amazon.com Inc. warehouse across the street from the Huawei Cyber Security Evaluation Centre with "one-way glass that obscures its windows, CCTV cameras that bristle from its walls, and oversize air-conditioning units lined up outside to cool the servers within."
Partly on the strength of work at the center, whose 38 security inspectors are paid by Huawei Technologies Co. but subjected to the same vetting required for UK intelligence officers, the government has made a preliminary decision to let the Chinese tech giant build noncore elements of Britain’s sensitive 5G infrastructure - soon expected to connect everything from driverless cars to refrigerators.
That could challenge the intense U.S. pressure to exclude Huawei from allied 5G networks and suggests that any cold war to come is likely to bear little resemblance to the last - and that the old metaphor is ill-suited to a digital version. In the future, the western side of the contest, at least, is likely to play out between deeply intertwined capitalist economies, often joined by common global technological standards, rather than between the mutually excluding economic systems of the Soviet era.
The report notes the Chinese government white paper released on June 2 described the world two largest economies as a single industrial chain "bound in a union that is mutually beneficial." Such language would have been unimaginable coming from Moscow in the 1970s.
"It will be totally different, because the Soviet Union was completely shut down, and China cannot be," says Fan Gang, director of China’s National Economic Research Institute. Given China’s estimated $1 trillion "Belt and Road" initiative, stretching from Jakarta to Nairobi and Rotterdam, he thinks "the real question is, who will set the standards? Who will have the advantage?"
If the divided future comes to pass, Bloomberg says, the swath of the globe aligned with China might buy driverless cars from the likes of Baidu and scroll WeChat and Alibaba on Huawei’s 5G networks, under the watchful eyes of censors who can control the data through servers on their shores - while a more laissez-faire model persists in the other part of the world, ruled by Google, Amazon, Facebook, Cisco, and the odd European company, such as Ericsson.
In May, U.S. Secretary of State Mike Pompeo warned the UK against reliance on Huawei, and effectively banned the company from doing business on its shores. China responded with a plan to create its own "unreliable entities list" to punish companies that cut off Chinese ones for noncommercial reasons.
According to China’s state-affiliated media, Huawei’s 33 American suppliers would be candidates, including Intel, Microsoft, Oracle, and Qualcomm.
In a further potential escalation, Bloomberg said last month that China is developing plans to weaponize its dominance of the supply of rare-earth metals used to make electric cars as well as the radar, guidance, and sonar systems in high-end military hardware.
The discussion also spotlights the production of "rare-earths," an area where China "won a war over the last 15 years before anybody else knew they were fighting," says Brian Menell, chief executive officer of TechMet Ltd., which mines niche metals in Burundi and processes them. China either produces or controls 95% of the world’s rare-earth metals, Menell estimates.
"You will not be the leading 5G or chip provider in both the U.S. and China, that much is becoming clear," says Andrew Gilholm, who directs analysis for greater China and North Asia at Control Risks, a consulting firm. And, there are limits to how far this enforced separation can go. "How do you restrict exports of AI? These are intangible things that are not developed by one company or country but are developed globally on open platforms," he says.
The case of Vietnam also suggests that concerns about the emergence of internet governance blocs may be oversimplified. This year, Hanoi became one of the latest to adopt tough cybersecurity laws modeled on China’s, attracted by the promise of heightened domestic control. Yet Vietnam, which sees Beijing as its primary security threat, isn’t joining any Chinese camp. When it announced the first steps in a 5G rollout last month, its biggest mobile operator, Viettel Group, said it was building its own technology, not using Huawei’s.
The U.S. isn’t having an easy time getting allies to close ranks, either. It has so far persuaded only a handful of countries to ban Huawei, notably Australia and Japan. If Britain does decide to fall in line, it would be the first country in Europe to do so.
Back in the UK, security experts acknowledge that Huawei products expose mobile networks to security risks but says that’s largely the result of sloppy coding practices, not state sabotage. As long as those failures persist, the report says in language that’s both diplomatically vague and loaded, "it will be difficult to appropriately risk-manage future products."
It is clear that the intensifying war for technology and markets threatens severe potential implications for global and regional trade unless it is carefully managed, a process producers should watch carefully as it intensifies, Washington Insider believes.
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