Washington Insider -- Friday

Sonny Perdue's Plate is Full

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

‘Progress’ Can Be Made on US Dairy Trade with Canada: Trump Adviser

President Donald Trump can “make progress” on lifting trade barriers for U.S. dairy products in Canada, a member of his campaign agriculture advisory team said.

The Trump administration could open up the market for U.S. dairy in Canada if the White House moves to renegotiate the North American Free Trade Agreement (NAFTA), Chuck Conner, president of the National Council of Farmer Cooperatives, told an audience at the Consumer Federation of America's National Food Policy Conference April 12. “I think you can see the opportunity here as we look at our trade policy and re-evaluation, update, whatever you want to call it, of making some headway with the Canadians and their dairy policy.” Conner said.

Conner said that he will not be joining Sonny Perdue, the president's nominee to lead the USDA, at the department. Conner was one of the name some reports suggested could be USDA Deputy Secretary.

Dairy is not included in the free trade provisions of NAFTA, and Canada's supply management system restricts imports of cheese, butter, milk and other dairy products from the U.S. That has raised angst among U.S. dairy farmers, who say the restrictions violate existing trade agreements and are exacerbating a glut of milk in the U.S. A coalition of dairy trade groups including the National Milk Producers Federation and the US Dairy Export Council recently urged the Trump administration to fight back against what they said were Canada's protectionist trade policies.

Regarding country-of-origin labeling (COOL), Conner said that while the Trump administration will focus on a U.S.-centric, buy-American trade policy, that may not include reestablishing COOL labeling rules for beef and pork. “Does that translate into country-of-origin labeling? I'm not sure, I kind of doubt it,” Conner said.

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India Requests WTO Compliance Ruling in US Poultry Dispute

India asked the World Trade Organization (WTO) to confirm whether it sufficiently revised its laws to comply with a 2015 dispute ruling that found its ban on U.S. imports of poultry meat, eggs and live pigs violated international trade rules.

India argued that its amended domestic laws adhere with the ruling, but the U.S. countered that India's policies continue to run afoul of WTO rules and is seeking $450 million in annual retaliatory trade measures.

India’s argument at the WTO. “As India has brought its revised avian influenza measures into conformity with its WTO obligations, prompt findings by the [dispute settlement body] will assist the parties in securing a positive solution to the dispute,” the Indian delegation said in a WTO document it circulated April 12.

If the WTO finds India's policies are still illegal and sanction Washington's request for retaliation, it could provide relief to some U.S. poultry producers who are still being impacted from the largest outbreak of avian influenza in U.S. history.

Specifically, India said it modified its domestic law to comply with the ruling by:

Screening poultry imports according the standards outlined by the World Organization for Animal Health (OIE).

Recognizing the concept of disease-free areas.

Ensuring there was no discrimination between imported and domestic poultry and poultry products.

Conforming its recognition of disease-free areas according to the OIE Terrestrial Animal Health Code and the SPS Agreement.

India also complained that the U.S. did not agree to enter into a sequencing agreement with India and did not pursue a compliance investigation before seeking retaliatory trade action. A sequencing agreement is an informal process by which parties to a dispute agree on a timeline and sequence for resolving the dispute following any WTO ruling.

The WTO dispute settlement body will consider India's request for a compliance investigation at its April 19 meeting.


Washington Insider: Sonny Perdue's Plate is Full

A sort of cottage industry now aims at sorting out the challenges that await Governor Perdue’s formal arrival at USDA. For example, Bloomberg put together a list of such issues this week, based heavily on statements to the Senate Ag Committee as well as other comments. The group suggests that immigration and trade top the list.

However, it is extremely difficult to anticipate these early challenges, especially since many are expected to be intra-administration, Bloomberg says. Certainly, one early problem will be a common one—the budget. The administration proposed a considerable cut in its FY 2018 budget of some 21 percent for its smaller, discretionary programs, especially rural development and foreign food aid programs.

In his confirmation hearing, Perdue didn't openly criticize Trump's budget, of course, but said he would work to “get agriculture's share.” He expects to work for producers and consumers to “let this administration and any other people that are making these decisions” know what's important to America, he said. “I hope, in the context of a balanced budget that meets the objectives, that we can get agriculture's share there.”

However, this is not a new kind of fight for Perdue. As Georgia governor, he said he faced a declining budget and has had to do “more with less.” He remarked “flippantly” that he “grew a $20 billion budget in Georgia to $16 billion during that 2003 to 2011 period” — a comment that may not have comforted some supporters who hope for better results, even in the current anti-spending environment.

He also expects to help confront immigration issues early on, he said, and noted that he would advocate for changes to the H-2A visa program for temporary agricultural workers. Dairy farmers currently can't use the H-2A program because their workforce is year-round, not seasonal, he said. “If you go into dairy barns around the country you are going to find those cows are being milked by immigrant labor, and I do plan to be a voice in the administration to persuade policy makers there over this issue,” Perdue said.

Perdue noted that he has already met with Environmental Protection Agency Administrator Scott Pruitt to discuss regulatory issues and that he planned to launch a cross-agency initiative on evaluating “onerous, prescriptive types of regulations.” He called for “ongoing communications” identified with each of these agencies whether it's FDA, EPA, Labor, OSHA, others, to identify the unintended consequences of regulations before those regulations are promulgated to give us an opportunity to represent USDA, both agriculture producers and consumers,” Perdue said.

In general, his comments on regulation were broad, Bloomberg said. He didn't comment on pesticide issues or most conservation policies. He did, however, voice support for government cleanup efforts in the Chesapeake Bay, a program what would be cut under Trump's proposed budget—and, one that some farm groups regard as controversial.

Of course, trade is high on Perdue’s priority list. He promised to work with Commerce Secretary Wilbur Ross and U.S. Trade Representative nominee Robert Lighthizer to promote U.S. products overseas in upcoming trade negotiations. And, he wants to ease financing restrictions on U.S. trade with Cuba. As governor, Purdue led a trade delegation to Cuba in 2010. He now says that while the USDA wouldn't be able to lift current restrictions, he would work to help open access to that market—an approach could run into opposition from others in the administration, Bloombers said since the administration has held varying positions on such a policy.

Perdue also commented that USDA's Food Safety and Inspection Service is doing “a wonderful job” in stepping up US inspections during Brazil’s current meat inspection scandal. However, Bloomberg notes that several lawmakers have proposed a temporary ban on imports of Brazilian meat, including Sen. Heidi Heitkamp, D-N.D., a member of the Agriculture committee.

Perdue also will head USDA as it works to help Congress to reauthorize and implement the 2018 farm bill, a five-year policy vehicle for agriculture programs—especially, the crop subsidy and nutrition programs mandated by the legislation.

Perdue went a little further than usual on the farm bill, pledging to work with lawmakers on improving Title 1 provisions like the Price Loss Coverage and Agriculture Risk Coverage programs. And, he says he is willing to consider offering aid to troubled sectors like dairy before Congress wraps up its work on that legislation. “I'm absolutely committed to look for a way to provide immediate and temporary relief, even prior to the ’18 farm bill if it's within the discretion of the secretary,” Perdue said.

So, in spite of the numerous pressing ag sector problems, Perdue's nomination path has been long and complicated. He was the last Cabinet pick and the White House took more than six weeks to submit his financial and background check documents to the committee, Bloomberg says.

And, it is clear that the Bloomberg “challenge” list is only partial and that as Secretary, Perdue will be dealing with many, many broad issues at a moment when almost all politics are toxic. Certainly, the Department is in need of a strong cabinet officer with political support and experience to deal with problems known and unknown that loom ahead and will need to be watched carefully, Washington Insider believes.


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