Washington Insider-- Thursday

Biden Trade Shift Ends TAA

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

'Right to Repair,' Other Ag Regs Coming

The White House on Tuesday signaled there is an executive order coming from President Joe Biden that would direct USDA to draw up regs coming on agriculture, including 'right to repair' issue, boost competition. USDA will also be ordered to develop new rules on concentration in the industry.

White House Press Secretary Jen Psaki said the action will focus on several fronts to "increase competition in agricultural industries to boost farmers' and ranchers' earnings, fight back against abuses of power by giant agribusiness corporations, and give farmers the right to repair their own equipment how they like."

The effort will also direct USDA to develop regulations relative to the Packers and Stockyards Act. Those regulatory actions are not necessarily new as USDA Secretary Tom Vilsack has previously said the agency was going to develop new rules covering certain areas of the law. Further, Psaki said that the order will also direct USDA to come up with new rules relative to the "Product of the USA" labeling effort which is voluntary.

USDA will also be ordered to come up with plans to "increase opportunities for farmers to access markets and receive a fair return, including supporting alternative food distribution systems," Psaki said, including farmers markets, and "developing standards and labels that consumers can choose to buy products that treat farmers and agricultural workers fairly."

CFAP 2 Payments Again Nudge Higher

Payments approved under the Coronavirus Food Assistance Program (CFAP 2) stood at $13.75 billion as of July 5, up slightly from the prior week.

Acreage-based payments total $6.28 billion, with $3.45 billion for livestock, $2.74 billion for sales commodities, $1.22 billion for dairy and $63.77 million for eggs/broilers.

Payments under the CFAP 1 program also edged up to $10.59 billion.

While USDA has said they will make payments to contract poultry growers, payments that were announced earlier, there is still no word on when the agency plans to issue such payments to contract hog producers.

Indications are there are still regulatory issues that have to be addressed for those payments to move forward.

And there is also the matter of additional dairy payments that were expected to be announced by USDA Secretary Tom Vilsack in Wisconsin recently, but he did not make the trip as the focus of the visit by Vilsack and President Joe Biden was shifted to only be on infrastructure.

Washington Insider: Biden Trade Shift Ends TAA

The shift in trade policy by the Biden administration was one with several influences, including their focus on the U.S. economy and the pandemic and trying to bring what they viewed as stability after a tumultuous four years under the Trump administration.

That shift in trade policy had President Joe Biden signaling that inking new trade deals was down on their list of priorities. One impact of that was the July 1 expiration of Trade Promotion Authority (TPA), which helps an administration in trade negotiations with other countries and trading blocs.

Several administrations have used TPA to reach trade agreements, including the Trump administration which utilized it to put the U.S.-Mexico-Canada Agreement (USMCA) in place. That allows an administration to negotiate a trade deal and bring it back to Congress for an up or down vote with no amendments possible.

But another casualty of this shift on trade policy is the Trade Adjustment Assistance (TAA) program. While not directly linked to TPA, it also ended July 1. TAA provides aid for Americans who lose their jobs or whose hours and wages are cut due to competition from imports.

While the Senate approved a 23-day extension of TAA, the House failed to act, shuttering the trade assistance effort. While TAA has not totally stopped, there are no new applications from workers that can be approved. Payments to those already receiving the help will continue.

An estimated 48,000 workers, primarily in service industries, will lose eligibility for benefits over the next year, according to the Department of Labor, Bloomberg reported.

Manufacturing workers can still receive support, but case-management services that help them access job training and find reemployment will no longer receive federal funds.

The services sector was one of the hardest hit by the pandemic and the Labor Department said that workers in the hospitability, utilities and warehousing sectors accounted for more than half of the TAA petitions that the agency received.

On the Hill, there is plenty of finger pointing as to who is to blame for the situation. House Ways & Means Committee Chairman Richard Neal, D-Mass., and trade subcommittee Chairman Earl Blumenauer, D-Ore., blamed Republicans for the situation.

"While our country continues to deal with the reverberating effects of the pandemic, this reversion will also disproportionately harm women and minority workers, and will prevent workers affected by trade from China from accessing the program," they said. "House Democrats are looking for the earliest opportunity to put the program back on track, and will also seek to increase and modernize TAA's benefits."

But House Ways & Means Committee Ranking Member Kevin Brady, R-Texas, declared that a three-week extension of the program "makes no sense. Trade Adjustment Assistance should be paired with Trade Promotion Authority."

And that is about the main linkage there has been between the two programs. The last time TPA was renewed in 2015, the renewal of TAA was paired with it to bring Democratic votes. It is seen as a way to get both Democrats and Republicans, as Republicans typically like to see TPA renewed and will back TAA as it helps bring Democratic votes for TPA.

Perhaps even more surprising is that the TAA expiration came even as the Biden administration and U.S. Trade Representative Katherine Tai have touted their "worker-centric" trade policy. Some observers think that rings a little hollow now with the TAA lapse.

The Biden White House has defended their inaction, with an official telling Bloomberg that Biden "has strongly endorsed rapid passage" of TAA, adding there are several pathways to make it happen quickly.

"We will only pursue new trade deals after we have made investments in American workers and communities," the official told the news service. "Signing new trade deals is not the only metric of a successful trade policy. We are continuously pursuing inclusive, worker-centered trade policies that reinforce the United States' resiliency, recovery, sustainability, and competitiveness."

Now if history is any guide, workers could still see TAA benefits restored retroactively as that happened in 2015 -- TAA benefits were restored back to the start of 2014.

So we will see. The shift in trade policy by the Biden administration has been more in style than in substance except for their downplaying inking new trade deals. But the potential for TPA and TAA to be restored is something that should be watched closely, Washington Insider believes.

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