Washington Insider-- Friday
Vilsack Expects To Boost Farmer Optimism
Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.
Biden Taps House Ways And Means Lawyer As USTR
Katherine Tai from the House Ways and Means Committee has been tapped to be nominated to be U.S. Trade Representative for the Biden administration.
In a statement, Senate Finance Committee Ranking Member Ron Wyden, D-Ore., praised Tai as a potential pick and called on Senate Republicans to process her nomination "as quickly as possible" following the inauguration on January 20.
From 2007 to 2014, Tai worked USTR where she successfully prosecuted several cases on Chinese trade practices at the World Trade Organization. If confirmed, Tai, who is Asian-American, would be the first woman of color to serve as the U.S. trade representative. She is also fluent in mandarin which could be an asset in dealing with China.
However, Biden has said he would not make any “immediate moves” to lift the tariffs President Trump has imposed on roughly $370 billion of Chinese imports. Biden said he would first conduct a full review of the Phase One trade deal the Trump administration reached with Beijing.
USTR Welcomes UK Decision On Aircraft Tariffs With A Caveat
The UK announced they will not continue the tariffs related to the WTO case over civil aircraft as of January 1, 2021, to “de-escalate the large civil aircraft conflict and come to a negotiated settlement.
“The United States welcomes this decision and shares the UK's objective of reaching a negotiated resolution,” the Office of the U.S. Trade Representative said in a statement. “The United States does not agree, however, that the UK would have any authority to impose tariffs. Only the EU sued the United States at the WTO; the UK did not bring a case in its individual capacity. Therefore, the UK has no authority from the WTO to participate in any such action after it no longer is part of the EU.”
The statement pointed out the U.S. sued not only the EU but also France, Germany, Spain and the UK over the airbus subsidies which resulted in the WTO authorizing U.S. countermeasures against each country and the EU.
Bloomberg is reporting this week that the prospect of Tom Vilsack returning to oversee U.S. agriculture is drawing praise from some farmers who are hopeful the former Democratic Iowa governor will be an ally on everything from biofuels and dairy to China and climate-friendly farming.
Vilsack was announced this week as President-elect Biden's pick to lead the U.S. Department of Agriculture. If nominated and confirmed by the Senate, Vilsack, who served eight years under Barack Obama, would be one of the country's longest-serving USDA secretaries.
The next ag chief will arrive at the USDA in the midst of farmer receipts of a record $47 billion this year in federal aid to make up for losses tied to the pandemic and the president's trade war. The industry also is facing questions on the future of biofuels, food security and conservation at the same time Congress is set to begin work on the next Farm Bill. Vilsack's experience both in Washington and the Corn Belt is reassuring to many growers, even as he faces criticism from environmental and civil rights groups.
“Vilsack is a positive for agriculture,” said Dan Cekander, a fourth-generation corn and soybean farmer in central Illinois who voted for Trump in 2016, but backed Biden this year after disappointment in the current administration's approach on corn-based ethanol.
Cekander, though, said he gives Trump credit for compensating farmers on trade and pandemic-related losses, as well as for having the “guts” to take on China.
A former two-term governor of the top corn-producing state of Iowa, Vilsack has spoken out against the Trump administration's Environmental Protection Agency over the thorny issue of whether some oil refiners should be exempt from annual biofuel-blending requirements. Vilsack has said the approach by Trump's EPA has left farmers with surplus corn, suppressing prices.
While the EPA has the lead role over such biofuel policies, “having Vilsack as agriculture secretary would only increase the odds that those small refinery exemptions go away and contribute to more ethanol use,” said Cekander, also the founder of DC Analysis, which focuses on helping clients with the grain market.
Vilsack “knows that renewable fuel policy is essential to a strong agriculture economy,” said Randall Stuewe, chief executive officer of Darling Ingredients Inc., one of the largest producers of renewable clean energy.
While Vilsack is expected to reprise his role as a supporter of biofuels, Biden has promoted electric vehicles and taken a more nuanced approach to the Renewable Fuel Standard that mandates biofuel use. Vilsack could play a part in shaping the administration's electric vehicle and fuel policies, said Scott Segal, an energy lobbyist and co-chair of Bracewell LLP's Policy Resolution Group.
Vilsack also said any concern that a Biden administration would shun biofuels as part of a push to electric cars is unwarranted and wildly unrealistic. “We're talking about generations that will pass before we have a vehicle fleet that is even remotely close to being all electric,” Vilsack said.
Iowa Farmers Union President Aaron Lehman said Vilsack being part of Biden's Cabinet will be “tremendously important in helping on trade issues.” While it was important to address imbalances with China, Trump's trade war “put farmers on the front lines to bear the brunt of it and then try to pick up the pieces later,” Lehman said. “We would much rather be earning money from the marketplace than receiving a payment to make up for policies that have failed.”
One global and domestic issue incoming administration officials will be tasked with addressing right away is climate change. Cekander said he's interested in how the USDA might use existing programs like the Conservation Stewardship Program, which provides grants to help farmers and ranchers reduce their carbon footprints. Trump has previously proposed eliminating the program.
However, not everyone is a Vilsack fan, Bloomberg says.
National Black Farmers Association President John Boyd Jr. said his group, which has more than 100,000 members in 46 states, had a “tough time” with Vilsack during the Obama administration in getting support for legislation aimed at addressing discrimination against Black farmers. Boyd said if Vilsack leads the USDA again he should make racial justice issues a top priority.
The environmental advocacy group Friends of the Earth said in a statement it was “deeply disappointed” by Biden's selection of “an agribusiness lobbyist with a tarnished record on civil rights, consolidation, and the environment.”
The most immediate issue for all agencies though will be dealing with the ongoing devastation of the COVID-19 outbreak. “We would urge Vilsack to expand nutrition assistance programs in order to ensure that millions of individuals who are facing unemployment and food insecurity are able to meet their most basic needs through the pandemic,” National Farmers Union President Rob Larew said in a statement.
Vilsack's current role as head of the U.S. Dairy Export Council has given him a “front-row seat” in seeing how the pandemic has revealed the strengths and weaknesses of the country's food system, American Farm Bureau President Zippy Duvall said. “Tom Vilsack understands that the agriculture sector is far more complex than most people understand.”
So, we will see. The food and ag policy environment is enormously different now than it was when Vilsack was last in charge. His administration will face enormous new challenges that producers should watch closely as they emerge, Washington Insider believes.
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