Washington Insider-- Friday

Fast Track Passes

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

TPP Talks Put Spotlight on Canada's Supply Management Programs

Now that the Obama administration has fast-track trade authority in its pocket (see longer item below), a major impediment to completing the Trans-Pacific Partnership (TPP) free trade agreement has been removed. U.S. negotiations on the agreement should now accelerate with some countries, notably Canada and Japan, both of which were waiting to see whether Congress would approve the fast-track measure before they offered any additional trade agreement concessions.

Canadian Prime Minister Stephen Harper said he wants to sign a TPP agreement which would transform Canada's trade relationships with a host of countries and possibly significantly alter its complex supply management regime that governs dairy and poultry. The United States has these programs firmly in its sights and can be expected to press continually for major reforms as part of Canada's commitment to TPP membership.

Domestic politics dictate that for now, Canadian officials still defend supply management. Canada apparently hopes that it can repeat the successes it had in negotiating bilateral trade deals with the European Union and South Korea under which its supply management scheme was off the table. Some have suggested that Canada may seek to craft a deal that would allow the United States, Japan and others to continue protecting their own "sensitive" sectors, thus creating cover for Canada to do the same for its dairy and poultry industries. Opposition to such a Canadian proposal can be expected to be significant and widespread among TPP participants.

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Senate Bill Would Cut Budgets for Workplace Safety Agencies

The fiscal 2016 budgets for the Occupational Safety and Health Administration (OSHA) and other federal workplace safety agencies would decline under a spending bill approved yesterday the Senate Appropriations Committee.

The proposal for OSHA's budget was $528 million, down about 4.5% from $553 million in fiscal 2015. The White House asked for $592 million. In addition, the subcommittee would cut funding for the National Institute for Occupational Safety and Health by 5.7%, the budget for the Mine Safety and Health Administration by 5%, the and Occupational Safety and Health Review Commission by 4.3%.

The cuts to the budgets for workplace safety agencies mirror those for agencies with responsibilities for clean air and clean water, indicating that Congress believes the government can perform its duties for less money than in the past or that these activities have become too costly, given current budget realities.

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Washington Insider: Fast Track Passes

On Wednesday, the Senate passed the "fast track" bill that would renew the president's Trade Promotion Authority (TPA) and reauthorize a benefits program for workers affected by foreign competition. The measure now goes to the president for signature. It is intended to support negotiations like the 12-nation Trans-Pacific Partnership (TPP) currently being worked out and allows the president to submit negotiated agreements to Congress for expedited, up-or-down majority votes.

The Senate also voted to reauthorize the Trade Adjustment Assistance program, and sent that bill to the House for consideration. That program provides unemployment compensation, training services and job-search and relocation reimbursements for workers who lose or may lose their jobs because of competition from foreign countries.

This week's votes were the latest fight in the ongoing trade policy debate, and came less than two weeks after House lawmakers effectively blocked both bills by voting against a similar TAA measure. The House eventually passed the TPA measure, despite vocal attacks from House Democratic leadership and labor groups. While the House leadership says it now intends to support TAA, it remains to be seen whether that support will be sufficient this time around, now that it's no longer tied to the fast track measure.

The TAA bill would provide $450 million in annual funding for the next six years. The measure also would extend the health coverage tax credit for covered workers retroactively for one year and onward until the end of 2019. The credit covers 72.5% of the cost of health coverage for individuals whose jobs are outsourced or who lose their pensions because of company bankruptcy related to trade.

Evidence of the importance of fast track to the TPP negotiations was quick to surface following the vote, observes suggest. For example, Australian Trade Minister Andrew Robb said the vote would allow ministers to meet "in the near future" to reach an agreement on the Trans-Pacific Partnership. Akira Amari, his Japanese equivalent, said he hoped the nations would get a deal by the end of next month.

When the president signs the fast track bill into law, it will end an extremely complicated, six-month, no holds barred legislative fight in the United States, and bring negotiations on the TPP closer to completion. This would follow a series of deadlines that were missed since the United States announced its participation in 2009. "This is obviously a positive development," Australia's Robb said in a e-mailed reply to questions Thursday. "The TPP brings transformational promise with more seamless trade and investment across 12 countries."

The vote bolsters efforts by Japan and the United States — the top economies among TPP members — to accelerate talks on the pact that covers about 40% of global commerce. It's a boost to Japanese Prime Minister Shinzo Abe, who's seeking to expand trade to breathe life into the world's third-largest economy, and to Obama, who wants to counter China as part of the U.S. "rebalance" toward Asia.

In addition, the TPP opens up the idea that America, not China, is the principal rule-setter in the region," Tom Switzer, a research associate at the United States Studies Centre at the University of Sydney, said on Bloomberg Television. "This is a big victory for the president. But it's also a big victory for U.S. business and engagement in the region."

The administration now hopes to complete an agreement this year on the TPP with the other 11 countries in the talks: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Japanese Agriculture Minister Yoshimasa Hayashi said in April that the TPP could boost demand for Japan's food exports among the 800 million people in the member nations, or 10% of global consumers. While South Korea isn't yet part of the negotiations, three out of five companies there support joining the TPP, according to a Yonhap News survey released Thursday.

The intra-party fight among Democrats over Trade Promotion Authority was not much of a surprise, but the bitterness of the opposition by organized labor and environmental groups and a few others was, observers say. Somewhat similar TPA squeakers were won by both Bill Clinton and George W. Bush in earlier trade policy skirmishes — but this one is being analyzed carefully for its implications for future trade policy, and for future Democratic economic policy.

Right now, it seems as if a strong future role for the United States in Asia has bipartisan support. Still, this year's TPA fight included disagreements over even the basic facts around trade — splits that may be unusually hard to bridge in the future, Washington Insider believes.


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(GH/CZ)