Washington Insider-- Tuesday

New US Trade Ambassador Introduced

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

Biden Had to Convince Vilsack to Come Back to USDA

Joe Biden held an event Friday in Delaware to publicly introduce some of his cabinet choices for domestic roles, including USDA and the Office of the U.S. Trade Representative (USTR).

That included, of course, Tom Vilsack to again head up USDA.

Biden noted that Vilsack “wasn't anxious to come back” to be USDA Secretary. “He wasn't looking for this job, but I was persistent,” Biden said.

Vilsack has continued to face backlash from some corners, particularly from black farmer representatives who contend Vilsack did not do enough in his first stint atop USDA. The situation is expected to translate into a higher focus on race issues relative to USDA and farmers.

Trump Administration To Unveil Proposed RFS Levels Soon

The Trump administration now plans on releasing its notice of proposed rulemaking (NPRM) yet this month on the proposed levels for 2021 biofuel and 2022 biodiesel levels under the Renewable Fuel Standard (RFS).

EPA had in May forwarded its proposed levels to the Office of Management and Budget (OMB) for review, but they remain listed as being under review.

In the meantime, indications are that EPA has opted to re-work the proposed levels to account for the impacts of the pandemic.

It is not clear what the new NPRM from EPA will say, but the regulatory agenda which revealed the action noted, “Relying on statutory waiver authority that is available when the projected cellulosic biofuel production volume is less than the applicable volume specified in the statute, EPA is establishing volume requirements for cellulosic biofuel, advanced biofuel, and total renewable fuel that are below the statutory volume targets.”

The action puts EPA on a path to finalize the levels in June 2021 under the Biden administration. That could result in one of the first biofuel decisions that the Biden administrations will have an influence on.


Washington Insider: New US Trade Ambassador Introduced

Bloomberg is putting an unusual light on the president-elect's proposed trade chief, Katherine Tai, who is appearing before Congress this week. The report says that there is a view that U.S. trade policy is getting a new guardian, but that after four years of radical policy-making in Washington, the selection will be greeted by many trading partners as a soothing event — perhaps as "the mop-up after President Trump's trade wars.”

Still, Bloomberg thinks the nomination could be seen as “potentially radical in its own right,” and argues that the consensus in Washington is that trade policy is not going to be a high priority for the incoming administration — and in “the gossipy world of Washington politics,” some will see the current nomination as confirmation of that.

U.S. Trade Representatives (USTRs) of the past have often had close political or personal connections to the presidents they served, but Tai is starting without any that are apparent. She also is making an unusually large leap from the staff ranks in Congress to become lead trade negotiator for the world's largest economy. She has never held elected office or worked in the senior politically appointed ranks of the executive branch.

Yet Tai is arguably the most qualified person for the job right now, Bloomberg says. Especially in a Washington where the politics of trade have been shifting and there is “significant bipartisan unease with the belligerent approach Trump has taken.” As the top Democratic trade staffer on the House Ways and Means Committee, Tai is already a major player who helped steer congressional Democrats' efforts to inject strong labor provisions into Trump's renegotiated NAFTA.

Her last job as a civil servant at USTR before her shift to Capitol Hill in 2014 was chief litigator in cases involving China. She not only speaks Mandarin but lived in China some 25 years ago teaching English there as a recent Yale graduate. But her most important qualification may be a new perspective on trade she seems to be ready to bring to the job. In this regard, at 46, she represents an important generational leap.

If she is confirmed by the Senate, for the first time in decades the person running the U.S. trade portfolio won't be a product of the 1990s policy wars that started with NAFTA and ran through the creation of the World Trade Organization and the battles over China's 2001 accession to it.

Robert Lighthizer, Trump's USTR, is often portrayed as a wily trade revolutionary. Yet he too is really a product of last century's trade battles, Bloomberg notes. He first made his name as a deputy in the Reagan administration. His biggest innovation was to bring back “dormant tariff-yielding mechanisms” from that era.

Tai, by contrast, is unencumbered by policy positions she took in the past. Moreover, she belongs to a corps of “Democratic trade wonks” who have spent the past four years deliberating how Trump could have outflanked them on trade and considering how to respond.

In rare public comments in August, Tai made what she herself flagged as an “oblique” criticism of Trump's tariff-driven approach. It was that U.S. approach to trade needed to be more “strategic.”

That is polite criticism. But what Tai went on to say was that the U.S. needed less weaponized tariffs and more investment in strategic industries, or industrial policy. Tariffs were “defensive” instruments, she said, while the U.S. needs to play offense by doing more at home.

However, Bloomberg notes that it is still “hard to get a handle on what exactly a Biden trade or broader international economic policy will look like.”

In recent writings some key members of the Biden team have laid out a broader vision built around a robust defense of American interests, though the precise mechanisms for doing that remain largely undefined. On Friday as he presented Tai, the President-elect offered what amounted to two campaign slogans: “Trade will be a critical pillar of our ability to build back better and carry out our Foreign Policy for the Middle Class.”

Trump's rallying cry was, of course, America First. Biden has promised to rebuild frayed trade and security relationships with allies. Which means Tai now has to balance that promise with a defense of the American middle class' economic future and to help create a new U.S. trade policy to do so.

So, we will see. It is expected that Tai's congressional testimony will add significant detail to the emerging new trade policies that Bloomberg — and, others — now see as so murky. In addition, at least some of the changes proposed may test expectations that the new policies will play a smaller role in future policies. In today's highly competitive global economies, trade policy likely will be extremely import and producers should watched closely as potential shifts are debated and begin to emerge, Washington Insider believes.

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