Washington Insider--Monday

TPP Status Memo

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

APHIS SEEKS PUBLIC COMMENTS ON GE WHEAT TRIAL CONTROL PLAN

After recent detection of genetically engineered wheat outside of permitted fields, public comments are requested on a new plan to strengthen oversight. The plan calls for better post-harvest monitoring to detect volunteer plants before they can become established or spread, USDA's Animal and Plant Health Inspection Service said in a news release.

No varieties of GE wheat have been deregulated, but under the restrictions proposed by APHIS, companies wanting to test a new variety of genetically engineered wheat would first have to obtain a permit from APHIS before planting. Currently, companies are only required to notify APHIS before starting a field test of the wheat. Also, the proposal would require closer monitoring of the site of a field test after it concludes.

Karen Batra, a spokeswoman with the biotechnology trade organization BIO, said her group was still reviewing the proposal to determine how it will affect BIO's members. But she said she was concerned it could disproportionately affect the small scientific companies and the academic institutions that conduct much of the research on genetically engineered crops.

Genetically engineered wheat plants were detected in unauthorized fields in Oregon and Montana during 2013 and 2014, respectively. The source of the GE wheat could not be determined in Oregon and the wheat found in Montana was believed to be volunteers from previous GE wheat trials at the location -- but the investigation remains open, APHIS said.

The new permitting process is intended to allow for post-harvest monitoring so any remaining GE wheat plants can be addressed before they become established or spread.

APHIS is seeking public comment on its GE wheat field trial permitting plan and will consider them if submitted on or before October 26, 2015.

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BOEHNER: DEMOCRATIC VOTES NEEDED TO PASS GOVERNMENT FUNDING MEASURE

A stopgap funding measure for fiscal year 2016 will keep the government open past Sept. 30 and will require Democratic votes to pass, House Speaker John Boehner, R-Ohio, said in an interview on the Sept. 27 broadcast of CBS's Face the Nation.

Boehner said the U.S. government will not shut down and the House will take up a continuing resolution "that the Senate is expected to pass" this week.

Boehner noted he will clean up legislative items before leaving Congress Oct. 30. "I don't want to leave my successor a dirty barn. I want to clean the barn up a little bit before the next person gets there," Boehner said.

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WASHINGTON INSIDER: TPP STATUS MEMO

Trans-Pacific Partnership chief negotiators are meeting in Atlanta this week ahead of a trade ministers meeting that begins September 30. Bloomberg BNA reported a memo obtained last week from Congressional staff is providing inside information on the status of the talks, and the Treasury Department hopes to reach an agreement on currency manipulation with TPP countries in a side letter in the near future. The memo came from House Ways and Means Committee ranking Democrat Sander Levin, D, Mich., Bloomberg said.

The report noted the memo was distributed to Democratic members of the House Advisory Group on Negotiations ahead of a meeting last week with U.S. Trade Representative Michael Froman. It said its purpose was to summarize key outstanding TPP issues Democratic caucus members have been raising with USTR, including use of the "side letter" device.

The memo asserted the Sept. 30 meeting of trade ministers "is widely viewed as a bid to clinch a deal," but it also noted important differences in several key areas. In addition to currency manipulation, the memo addresses labor rights; environment; investment and investor-state dispute settlement; access to medicines; automotive market access; tobacco controls; rules of origin; state-owned enterprises; agricultural market access; food safety measures; and copyrights.

The document also discusses the potential time line for congressional consideration of the TPP when it is concluded.

Bloomberg noted with regard to ag market access, the Levin memo warned that the USTR, "appears to be poised to reach an agreement on dairy market access that the U.S. dairy industry will not be able to support," and suggested rice producers also may be unhappy with the deal, although the United States has been pushing Japan for better access to its rice market.

The dairy negotiations involve the U.S. and Canada, as well as Japan and New Zealand and have been a stumbling block in TPP market access negotiations for some time. Canada protects its dairy sector from imports through a supply management system that imposes tariffs ranging from 200% to 300% on dairy imports above certain limited amounts.

The memo also questioned whether the TPP will safeguard regulators' ability to block unsafe food imports "while also ensuring that U.S. agricultural exporters are not subjected to bogus food safety measures."

The period of exclusivity granted to biologic pharmaceuticals before "biosimilars" may enter the market is among the major outstanding issues in the talks, according to the memo. Some TPP parties have insisted on zero or no more than five years of exclusivity but the U.S. has called for 12 years, the memo said. "There is some discussion now of a provision requiring a period of 'five-plus' years, but the text of such a proposal is not available for members to review," the memo said.

Whether the state-owned enterprise (SOE) provisions will help level the playing field for U.S. businesses will turn on how broad country-specific carve-outs for particular SOEs will be and how SOEs are defined, the memo said. "Negotiations among the TPP parties over their individual, country-specific schedules of exempted entities are ongoing. While significant challenges remain with a handful of countries, progress with Malaysia appears to be particularly slow and difficult. It is difficult to assess the status of these carve-outs, however," the memo said.

Levin also expressed concern the SOE definition being used "is very narrow, allowing enterprises that are effectively controlled by foreign governments (but where the government owns less than a majority of the shares) to circumvent the obligations."

Under trade promotion authority procedures, the president must first notify Congress of his intent to sign a final TPP agreement 90 days before signing. The draft text must be published 60 days before the agreement is signed.

It seems unlikely the administration will be very happy with Levin's memo, especially with its suggestions of areas where important constituencies can be expected to be seriously unhappy with the deal, although the memo may give USTR an opportunity to explain its position.

So, it will be important to see what the details of the administration's draft text actually turn out to be. No one expects the completion of these talks will be any easier to sell to Congress than the run-up fights over trade promotion authority were, especially since Congressional alignment is increasingly uncertain these days and since coming budget battles likely will dominate all other discussions for the foreseeable future. Certainly, the TPP talks should be watched carefully by producers as they reach their final stages and details emerge, Washington Insider believes.


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(GH/CZ)