Washington Insider -- Monday

Tough Trade Talks With China Continue

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

Biofuel Meetings Appear to Have Wrapped Up

The meeting between President Donald Trump and oil-state senators Thursday appears to be the final meeting on the topic of U.S. biofuel policy, with those lawmakers focusing on their concerns over a package of changes the administration has developed.

No details of Thursday's White House meeting have surfaced yet, although Sen. Bill Cassidy, R-La., said in a tweet that Trump had been receptive. “Just spoke with @realDonaldTrump on the renewable fuel standard — the president is very engaged on the issue, and feels as if we can work towards a solution which protects jobs,” Cassidy wrote.

Biofuel backers remain cautiously optimistic the package that reportedly has been agreed to will be the final word. However, they are also wary of the potential for the apparent package to change.

Said Senate Finance Committee Chairman Chuck Grassley, R-Iowa, last week: “I have been hoodwinked so many times, not just by EPA on this issue but by other bureaucracies as well, so I am going to see if what they talked about is the end product.”

It is not clear whether the plan will be announced prior to November 30, the date that EPA has to finalize Renewable Fuel Standard (RFS) volume requirements for 2020 biofuels and 2021 biodiesel.

The fact that neither biofuel backers nor oil industry interests are talking about the plan could be a sign it has met with approval by both camps. However, as signaled by Grassley, at least biofuel backers are wary until the final announcement is made.


Labor Department Sets Final Rule On H-2A Changes

The Department of Labor (DOL) will modernize the burdensome H2A visa process, eliminating the requirement to advertise a job opening in print newspapers.

The advertising will now shift to the SeasonalJobs.dol.gov website, a mobile-friendly platform, and on State Workforce Agency websites. The changes will take effect October 21.

“Both of these actions by DOL are critical changes the Administration is making to improve the H-2A application process,” USDA Secretary Sonny Perdue said. “By streamlining these processes, DOL is bringing the H-2A process into the 21st Century allowing farmers to be able to better and cost-effectively advertise for workers they need and fill out the required forms faster and more efficiently, because no one should have to hire a lawyer to hire a farm worker.”

Washington Insider: Tough Trade Talks With China Continue

The New York Times is reporting that both the United States and China issued statements Saturday saying their recent talks were productive. At the same time, the Times noted that the combination of Friday’s tough words from President Trump and the cancellation of a planned U.S. trip by Chinese ag officials to two U.S. states seemed to cast a cloud over prospects for a trade deal and caused something of a sell-off in New York stock trading.

China’s state-run Xinhua news agency said Saturday that fairly senior negotiators had “conducted constructive discussions” in Washington in recent days and had “agreed to continue to maintain communication.”

The tone of the Xinhua statement was matched by a separate statement from the United States Trade Representative in Washington. “These discussions were productive, and the United States looks forward to welcoming a delegation from China for principal-level meetings in October,” the statement said.

In addition, the Times emphasized that both sides’ trade negotiators have continued to look for a resolution of their differences even as tensions ratcheted ever higher over the summer — although the report noted that its sources “all insisted on anonymity, citing diplomatic sensitivities in the negotiations.”

The delegation of Chinese ag officials that had planned to travel to Montana and Nebraska in the coming week but cancelled at the last moment did not act because of “any new difficulty in the trade talks,” the NYT said. Instead, the trip was canceled out of concern that it would turn into a media circus and “give the misimpression that China was trying to meddle in American domestic politics,” the Times said.

The Chinese government has long taken the position that countries should not interfere in each other’s domestic affairs, a position developed partly in opposition to foreign criticisms of China’s human rights record.

In recent weeks, the Chinese government and many Chinese internet users have also reacted angrily to calls by American officials for Beijing to show restraint in responding to increasingly violent pro-democracy protests in Hong Kong. China’s foreign ministry has repeatedly objected to what it describes as intervention in China’s internal affairs over Hong Kong.

The question now is whether Vice Premier Liu He of China can make any progress when he comes to Washington for high-level talks next month. While the dates for those talks have not been confirmed, they look likely to be scheduled for Oct. 10-11, the Times said.

The biggest obstacle facing negotiators may be agreeing on the scale and ambition of any deal they try to reach. The Times cited several of its sources that argue that China especially wants to reach a partial deal that would head off President Trump’s planned increases in American tariffs on Chinese goods set for Oct. 15 and Dec. 15.

China is also seen as becoming increasingly wary of seeking any comprehensive resolution of the dozens of issues facing the two countries. As a result, its negotiators have tried to focus the talks on issues that can be resolved through regulations that the country already plans to issue by early January to implement a new law on foreign investments that the National People’s Congress approved in March.

At the same time, Chinese trade negotiators have tried recently to exclude issues like data flows, the location of data and the setting of cybersecurity standards. These concerns tend to infringe on the turf of China’s internal security agencies, which have resisted any limits on their ability to conduct comprehensive surveillance within the country and are wary of allowing in American tech companies, the Times said.

The United States has tried to persuade Beijing to adopt broad changes to Chinese laws to make the country more open to imports and to limit subsidies for industries, particularly advanced manufacturing industries that compete with American industries.

However, President Trump objected on Friday to any partial deal. “I’m looking for a complete deal, I’m not looking for a partial deal,” the president said during a joint news conference with Prime Minister Scott Morrison of Australia. “We’re looking for the big deal.”

There have nonetheless been several discussions between the two sides on reducing the value of American tariffs that are still pending and which are set to increase even further by mid-December.

The United States also has been pressing China to buy more American food in exchange, purchases China likely will need as an epidemic of African swine fever has killed huge numbers of hogs and pigs.

The two sides have nonetheless undertaken a series of smaller, confidence-building trade measures in the past two weeks.

So, we will see. The pressure is strong and growing on both sides to strike some deal that will support increased trade and reduce recent reliance on broad tariffs — especially if the economies continue to exhibit signs of weakening. Clearly, the economic and trade talks and the fights they concern are issues producers should watch closely as they intensify, Washington Insider believes.

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