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.

EPA Chief Stands Behind WOTUS

EPA's waters of the United States (WOTUS) rule, which seeks to clarify the scope of the Clean Water Act, was again defended by EPA Administrator Gina McCarthy in her recent remarks to the National Association of Regulatory Utility Commissioners (NARUC).

"We are confident we took the best science and that we've applied that science appropriately within the Clean Water Rule so that we could successfully defend its merits, which you know we will be moving towards at this point," McCarthy told the NARUC audience.

There was "tremendous opportunity to protect headwaters in a way that will prevent very high and expensive pollution treatment further down the pipe when we can get at these prevention opportunities upstream." McCarthy added.

The WOTUS regulations are "weakest" on substance and procedure, not constitutional grounds, said lawyer Sam Brown at a National Clean Water Law Seminar in Nevada. Since publication of the new rule at least 19 lawsuits have been filed and the rule has been placed on hold in 13 states.

The new rules are being litigated in court and also face stiff opposition from Congress as the Senate recently passed a resolution of disapproval of the proposed WOTUS rules.

Given that the resolution of disapproval on WOTUS would be vetoed if it were to reach President Barack Obama's desk, the attention will then turn to the omnibus spending plan that lawmakers are aiming to complete in December. And should that not contain any provisions to put the WOTUS rule on hold, courts remain the most likely to determine the fate of that rule.

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WTO Ruling on COOL Does Not End EU Meat Origin Labeling Efforts

European Union Agriculture Commissioner Phil Hogan has reassured Portuguese Socialist Member of the European Parliament Ricardo Serrao Santos that the World Trade Organization ruling against the U.S. Country of Origin Labeling (COOL) law does not affect labeling efforts in the EU.

Serrao Santos sought assurances the WTO ruling would not impact EU rules, to which Hogan said: "The WTO dispute outcome did not state that all origin labelling for meat is against WTO rules. Instead it found that the practical application of the U.S. system was discriminatory as it accorded less favorable treatment to imported livestock than to like domestic livestock, in particular due to disproportionate record keeping and verification requirements for producers and processors of imported livestock."

Hogan added that the WTO ruling could actually benefit EU exports.

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Washington Insider: More From Canada on COOL and TPP

New Canadian Ag Minister Lawrence MacAulay told the press this week that his government has yet decided which specific products would be targeted for retaliation under the pending WTO determination relative to the U.S. Country of Origin Labeling law.

Reuters is reporting the Minister noted that the country's International Trade Minister Chrystia Freeland has responsibility in the trade arena but suggested that retaliatory tariffs on U.S. goods can be expected. "You cannot have a deal with foreign countries and not have them comply with the rules," MacAulay said. "You have to take measures. Do we want to? No. But if we have to, I suspect we will."

The previous Canadian government had outlined a bundle of U.S. goods that would face retaliatory tariffs but MacAulay said the new government may not be bound by that list.

A World Trade Organization panel will soon issue a determination on the retaliation issue where Canada and Mexico have sought a combined $3.2 billion in tariffs on U.S. goods in spite of U.S. insistence that the damages incurred by the two countries is less than $100 million. A decision was originally set for Nov. 27 but has been delayed until early December.

Nevertheless, the timing of the Canadian trade sanctions seems to be firming up. There is a growing expectation that the WTO decision will come around Dec. 7, a date that would allow the new measures to kick in by Dec. 18, but also could allow U.S. lawmakers time to pass new provisions that avoid the retaliation, perhaps by a rider on the omnibus spending plan expected to be agreed to early December.

Reuters noted that MacAulay also commented broadly on the Trans-Pacific Partnership, "I suspect when I evaluate the whole thing, it will be something I support. The compensation package worth CD$4.3 billion ($3.24 bil.) to dairy, poultry and egg farmers by the prior Canadian government seems like a fair plan," he noted.

With regard to yet another TPP issue, Bloomberg is reporting that Sharon Bomer Lauritsen, assistant U.S. Trade Representative for agricultural affairs, said that while TPP does not specifically require countries to strengthen food safety systems, "some countries are expected to receive help with their food safety capabilities and stronger regulatory systems "like we have in the U.S."

She thinks that future sanitary and phytosanitary measures will be more transparent, backed by stronger scientific evidence under TPP rules. The provisions are meant to help members without robust SPS regulations improve safety while preventing U.S. exports from being rejected by other nations.

The U.S. has reaffirmed WTO SPS measures in every free trade agreement in the past 20 years, but has still had problems when trading partners replace tariffs and trade barriers with other restrictions, often under the guise of food safety. Lauritsen asserted that future TPP rules will require that signatories review the scientific basis of any such emergency measures and report their findings to countries on request.

Under TPP, the U.S. is not expected to see a flood of food products from other TPP nations, with the exceptions of dairy and sugar, which have traditionally been some of the more protected U.S. agricultural products.

So, the trade policy environment in the United States and its main trading partners is complicated just now, but some festering issues seem on the verge of being cleaned up to clear the way for the coming debate over the TPP. In general, the world has become much more protectionist over the past several years. Perhaps, the TPP will eventually be seen as a welcome means of reversing that trend -- a shift producers should watch carefully as it emerges, Washington Insider believes.

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(GH/CZ)

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