Washington Insider-Thursday

States and the Administration's Clean Water Rule

Editor's note: Washington Insider will not be updated on July 3rd, a federal holiday. Updates will resume on Monday, July 6.

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

Japanese Business Leaders More Optimistic About Prospects for Pacific Trade Deal

President Obama's signing the Trade Promotion Authority bill into law earlier this week has resulted in a burst of optimism and additional enthusiasm from Japan's business community regarding the ongoing Trans-Pacific Partnership (TPP) negotiations.

On Monday, the head of Keidanren, Japan's business federation, predicted that bilateral trade talks between Japan and the United States would accelerate now that the Obama administration has TPA in its pocket. "We believe that U.S.-Japan negotiations are now in their final stage, and since the TPA bill has recently been enacted, it will certainly speed up the negotiation process, hopefully," said Keidanren Chairman Sadayuki Sakakibara. The Keidanren is a big deal because it represents 1,300 large corporations and 110 industrial associations in Japan.

The bilateral talks have been pursued for months, with but slow progress. Some observers say that Japan has been reluctant to make final offers to the United State on agricultural and automotive trade until President Obama had Trade Promotion Authority. Others, however, believe the slow pace of the discussions had more to do with internal Japanese politics and the power of agricultural interests there that have no interest in lowering Japan's substantial tariffs on farm products. Monitoring progress of the bilateral talks over the next couple of months should indicate which view was closer to the truth.


Brazil's Rousseff Could Get a Popularity 'Bump' Following Meeting with Obama

Brazil President Dilma Rousseff was in Washington earlier this week for meetings with President Obama that had several goals.

For President Obama, one goal was to put to rest the ill will the United States earned last October when it came to light that U.S. security agencies had monitored Rousseff's private communications. "Since then, some things have changed," Rousseff said. "And the change is particularly due to the fact that President Obama and the U.S. government have stated on several occasions that they would no longer engage in intrusive acts of spying on friendly countries. I believe President Obama," she added.

Another major reason for the meeting was for both countries to commit to ongoing efforts to expand bilateral trade and investment flows, and remove non-tariff trade barriers on industrial and agricultural goods, including regulatory convergence and harmonization of technical standards.

Rousseff likely also had another goal in mind, and that was to repair her damaged reputation at home by demonstrating her skills on an international stage. However, if that was something she hoped to accomplish, it is unclear whether she accomplished that goal. A nationwide poll released yesterday in Brazil showed that the popularity of Rousseff's government fell to a new low, with the number of Brazilians considering Rousseff's government "great" or "good" dropping to just 9% from 12% three months ago, according to Reuters. However, the poll was taken between June 18 and 21, meaning the Rousseff government could still climb back into double-digit popularity numbers as a result of her Washington trip.


Washington Insider: States and the Administration's Clean Water Rule

The actual state of play on the fight over the scope of Clean Water Act's jurisdiction is still very murky. A "final rule" has been published jointly by the Environmental Protection Agency and the U.S. Corps of Engineers and will take effect Aug. 25 — but will be considered final on July 13 for the purposes of judicial review.

In the meantime, more than half the states have filed lawsuits in several different federal courts across the country, with more suits are expected from both states and regulated industries.

The argument, experts say, concerns the concept of "navigable or interstate waters," EPA's main Clean Water Act responsibility. The states mostly would like to limit EPA's authority narrowly to navigable waters, waters and wetlands that abut and maintain a continuous surface connection with navigable waters or to continuously flowing streams that feed directly into navigable waters.

For the first time, the new rule defines EPA's role concerning tributaries — and limits statutory coverage for wetlands and waters adjacent to navigable waters and their tributaries. The rule also allows the EPA and the Army Corps to determine jurisdiction on a case-specific basis by assessing the effects isolated wetlands and waters have on downstream navigable waters, either singly or in combination with similarly situated waters and wetlands.

The rule's definition of a "water of the U.S." under the Clean Water Act applies to all clean water programs, including discharge permits and dredge-and-fill activities in wetlands and other waters.

Steve Miano, attorney with a Philadelphia-based law firm, told the press recently that the U.S. Supreme Court has ruled that in situations where the law is unclear, deference should be given to a federal agency's reasonable interpretation. If that is the case, it will be interesting to see how the courts treat the question of deference to the EPA and the corps in this challenge.

In general, a broader definition of "the waters of the U.S. " would seem to place more area under federal authority — even while it increases responsibilities for waters under state and local authority. For instance, states are required to identify impaired waters and develop total maximum daily loads of pollutants to bring them into compliance with water quality standards. They also are required to set water quality standards or pollution discharge limits.

An additional complication arises from congressional efforts to block EPA from using federal funds to "implement, administer and enforce" its new rule, a shift that could have implications for states, as well. Some state water officials have been telling the press that implementing the rule in the absence of EPA or Corps guidance would be a challenge. For example, they could need to identify the ordinary high water mark in tributaries, according to Julia Anastasio, executive director and general counsel for the Association of Clean Water Administrators. "And it's not just guidance, but funds for training too."

So, this fight over basic clean water definitions has become a three way duel, observers say, with the states and many rural interests on one side, environmental and citizens' groups actively involved in favor of more extensive regulations and EPA attempting to show progress in the fight against pollution and toward enforcing basic rules.

In some cases, the state role is more than a little ambiguous because those offices would prefer to let EPA take the heat for unpopular rules they believe the law requires them to enforce.

Clearly, this fight will not abate as long as major pollution problems continue to grab headlines. How it will be pursued through thickets of budget issues, administrative procedures and party politics remains to be seen, but its implications remain important to all, Washington Insider believes.

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