Washington Insider --Thursday

By DTN's Washington Insider

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

EU Agriculture Ministers Critical of Plans to Ban Biotech Crops

European Union agricultural ministers meeting recently in Brussels said they oppose a European Commission proposal that would allow national governments to ban products with genetically modified (GM) content for reasons other than sound science. Ministers from almost all 28 EU member states said the proposed legislation would violate EU single market rules as well as the EU's World Trade Organization (WTO) obligations.

EU member nations that favor GM technology and those opposed found common ground in criticizing the plan over concerns that if one member state banned a GM product and another did not, such a move would cause chaos in the EU single market that includes the fundamental right of the free movement of goods.

These are some of the same arguments that U.S. officials and agricultural industry representatives have made for years. The hope for U.S. agricultural producers and exporters is that with the message now being carried by a friendlier messenger, there could be some movement toward a wider opening of the European market for biotech crops.

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White House Threatens Veto of Western Drought Bill

White House advisers would recommend that President Obama veto legislation aimed at increasing water storage and refining federal water resource management in response to the drought that continues to plague large sections of the West, the Office of Management and Budget says in a Statement of Administration Policy issued Tuesday.

According to OMB, the proposed legislation would undermine the Endangered Species Act and could actually impede an effective response to the drought "by creating new and confusing conflicts with existing laws [and] adding an unnecessary layer of complexity to Federal and State cooperation." As a result, says OMB, "This additional standard could slow decision-making, generate significant litigation, and limit real-time operational flexibility critical to maximizing water delivery."

The question now is whether the bill's 26 co-sponsors (25 of whom are Republicans) will be willing to drop from the proposal language that the administration deems to be extraneous in return for the a greater chance of gaining federal drought assistance.

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Washington Insider: How the TPP Could Help Feed a Hungry Planet

Now that the Congress has agreed to authorize Trade Promotion Authority for the president, the general tone of the trade policy debate seems to have changed as observers dig deeper into what benefits can be expected from the Trans Pacific Partnership (TPP) now being negotiated. Last week, a major figure in U.S. and global trade policy, Robert Zoellick, wrote to the Wall Street Journal to emphasize a benefit most have overlooked.

While Zoellick has been out of the Washington limelight for a while, he has enormous credibility based on the roles he played as the eleventh president of the World Bank, U.S. trade representative during early stages of the Doha Round and as a deputy secretary of state.

He wrote to the Journal this week, he says, to emphasize the enormous opportunity the 12-country Asia-Pacific talks offer to transform ocean and fisheries conservation. He cites the UN's Food and Agriculture Organization as concluding that "90 percent of marine fisheries in every region of the world are now at risk — either significantly depleted or recovering" and much of the world has weak enforcement capabilities.

This is highly significant because more than 4.5 billion of the world's 7.25 billion people rely on fish as an important source of animal protein. At the same time, the UN predicts that the world population will grow by nearly 30% by 2050 and require 70% more food. But, while the global population's need for nutrition will be imperiled if overfishing continues, "the TPP offers a big step toward a solution."

He notes that an important amount of fishing overcapacity is due to government subsidies for the construction of vessels, engine upgrades and operating expenses (such as fuel). And, he notes that the University of British Columbia Fisheries Center estimates that "overfishing" subsidies are equivalent to approximately 20% of the global catch.

Working with Canada, Australia, New Zealand and others in the TPP negotiations, the United States is working to block subsidies for harvests of overfished stocks and illegal fishing. Among its proposed provisions are rules that would prohibit subsidies for fishing by an unlicensed country's fleet within another country's 200-mile exclusive economic zone, harvesting banned species, using banned gear, and fishing out of season. The TPP countries represent one-third of the world's wild catch of fish by weight. And eight of the 12 are among the world's top-20 fish producers.

Rough estimates by leading scientists suggest that illegal, unreported and unregulated fishing costs legitimate fishermen $10 billion to $23 billion annually — and at least $6 billion of that coming in the Asia-Pacific region. By a wide margin, the United States and Japan are the top importers of seafood. Yet a recent study in the Journal of Marine Policy estimates that 20% to 30% of U.S. seafood imports are caught illegally.

The United States has long been a leading advocate for the reform of global fishing subsidies. Republican and Democratic administrations have pressed this case in World Trade Organization negotiations, backed by bipartisan congressional support. The new Trade Promotion Authority specifies that U.S. negotiators should reduce or eliminate subsidies that decrease market opportunities for U.S. exports or unfairly distort agriculture markets (including fisheries) to the detriment of the United States.

Zoellick also notes that a trade deal with anti-subsidy provisions could serve important ocean-conservation goals that are not limited to the 12 TPP countries. If other large economies and fishing nations join the agreement, the benefits to ocean abundance increase.

A TPP pact also would strengthen the case for conservation in the proposed free trade negotiations with the European Union, where the United States also has introduced proposals to reform subsidies to fisheries. A global movement for reform could pull in China and other countries, whether through the World Trade Organization or separate negotiations.

Rebuilding an abundant ocean that can feed a hungry planet is a crucial conservation opportunity. The Trans-Pacific Partnership could turn out to be the most important ocean-conservation achievement of this, or any, presidency. And, Zoellick believes that policies that stimulate trade with strictly enforced rules, can deliver good conservation outcomes.

This is yet another case where trade negotiations can help level global playing fields and improve U.S. market access while protecting access to world resources, Washington Insider believes.

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