Washington Insider--Monday

Continuing Environmental Regulations War

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

Date of WTO Arbitration on COOL May be Pushed Back

Mexico last week filed a correction with the World Trade Organization regarding the amount of retaliation it is seeking to impose on the United States due to the U.S. country of origin labeling (COOL) law. Its "correction" raised the total amount by approximately $60 million. However, by posting the new figure of $713 million, Mexico likely will delay the final arbitration ruling for another two weeks.

Canada has asked the WTO for permission to impose retaliatory tariffs on $2.52 billion worth of U.S. products. If the WTO Dispute Settlement Body moves ahead with that request, Canada could receive permission before Mexico does. In the past, however, the WTO has chosen to combine the Canadian and Mexican complaints about COOL, and it is not clear whether it will continue to do so. In any case, it is likely that the arbitration proceedings will not conclude until late August or early September.

The House already has voted to repeal the COOL law, but the fate of a similar proposal in the Senate won't be known until later this month because opposition to repeal is stronger in that chamber and there likely will be calls to rewrite rather than repeal COOL. However, given that Congress has been trying –– without success –– to write a country of origin labeling law that would pass WTO muster since the 2002 farm bill, the prospects for a sudden breakthrough on this front appear dim.

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Senate Set to Vote on President's Trade Bills

Following last week's House vote to give President Obama fast-track trade authority, the Senate tomorrow is expected to begin its consideration of the measure. Senate Majority Leader Mitch McConnell, R-Ky., already has filed cloture on the House-passed bill for Trade Promotion Authority (TPA), also known as fast track, and on a package of trade preferences that includes an amendment sought by Democrats that would provide assistance for workers displaced by foreign competition.

As was the case in the House, opposition to the trade bills is being led by Democrats. Senate fast-track supporters would need to line up 60 votes to get around a procedural hurdle before passing the bill. That is looking to be increasingly difficult because some of the previously pro-trade Democrats are said to be wavering. McConnell is thought to need at least 11 Democratic votes.

The horse-trading on this issue has become intense, with a number of senators seeking to bargain their votes on TPA for consideration or inclusion of sought-after legislation. It is to be hoped that this complex process will play itself out by Friday, when Congress is scheduled to begin its week-long Independence Day recess.

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Washington Insider: Continuing Environmental Regulations War

The urban-rural clash over environmental rules is continuing to escalate this summer, with rural interests working hard to limit the Environmental Protection Agency’s rule-making authority through legislation and agency budget cuts. At the same time strong public concerns over water quality in several regions are being watched closely. The Chesapeake Bay watershed is an example, particularly given its continuing efforts to impose limits on nitrogen, phosphorus and sediment pollution under the Chesapeake Bay compact.

The EPA recently posted interim evaluation of 2014-2015 sector-specific milestones for each of the Chesapeake Bay states in an effort to track progress and define areas of particular concern. Each of the member states is implementing specific constraints on various sectors in their efforts to achieve the 60 percent reduction goal by 2017.

The states sharing the 64,000-square-mile watershed are obligated to take all actions necessary, by 2025, to reduce nutrient — collective name for nitrogen and phosphorus pollution — and sediment loading to levels that will allow the Chesapeake Bay's ecosystem to thrive, under a total maximum daily load program established by the EPA in 2010.

The implementation plan includes biannual milestones. Annual and interim assessments of bay restoration progress are required by a federal executive order, which requires multiple federal agencies to work to restore the bay.

Overall, the results are seen as mixed, but encouraging EPA says. For example, the agency said that while all six states that make up the watershed are committed to reduce nitrogen, phosphorus and sediment pollution by 60% from 2009 levels, only West Virginia and Delaware are now on track to fully meet these goals.

In evaluating the progress made toward meeting the 2017 goal, the EPA looked at overall reductions as well as reductions achieved in wastewater treatment, urban and suburban runoff and agriculture. For instance, agriculture, septic and wastewater sources in West Virginia are all on track for nitrogen targets, whereas the urban sector is off target. Virginia is reported to fall short in achieving sediment reductions in the urban and agriculture sectors. Most of the states are doing well in one or more key areas, but falling behind in others.

In a somewhat surprising aspect of the report, the foundation characterized Pennsylvania's activities as falling "dangerously short" and noted that the state would have to reduce nitrogen pollution by an additional 14.6 million pounds, or 22%, by the end of this year to get back on track—in spite of strong, early stage efforts. According to the report, Virginia and Maryland have a better chance of meeting their respective goals.

The 2015 report card is being interpreted as an important indicator of progress for the compact’s strict rules, and is watched carefully in areas like northern Ohio where recent water quality problems have been severe, as well as in other areas where combinations of existing state and national programs are being mobilized to deal with environmental quality problems.

Still, observers suggest that the broader lesson from the Chesapeake Bay is that, in spite of widespread suspicion about “big government” today, public interest in environmental quality remains strong. As a result, agriculture — as well as construction and other industries with heavy environmental impacts — likely can expect continued interventions to deal with persistent environmental threats as they occur, Washington Insider believes.


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(GH/CZ)