Washington Insider -- Tuesday

By DTN's Washington Insider

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

South Korea Taps KORUS Negotiating Chief as Trade Minister

South Korea has tapped Kim Hyun-chong to be their next head of the Ministry of Trade, Industry and Energy, according to media reports, bring a familiar face in as the U.S. has requested the U.S. and South Korea revisit their trade deal.

Kim taking the helm puts someone familiar with the details of the U.S.-Korea free trade agreement (KORUS) as he negotiated the deal between the two countries.

The U.S. is seeking to amend KORUS to address the trade deficit the U.S. has with South Korea, with US Trade Representative Robert Lighthizer requesting the discussions under provisions in KORUS.

Kim served as South Korea's trade minister from 2004-2007, negotiating an estimated 40 trade deals the country inked during his tenure. He currently is a member of the WTO Appellate Body, appointed to serve a four-year term on the panel starting in December 2016.

South Korea has agreed to the request from Lighthizer, but has signaled the session may not mean a renegotiation of the deal. The initial focus, according to South Korea, is to determine whether the U.S. trade deficit with South Korea is really due to the trade deal or if it is due to other structural causes.

U.S. beef interests have expressed concern at the coming discussions, telling the US administration they fear the gains negotiated as part of KORUS could be negatively impacted. "Under KORUS, the U.S. beef industry has seen an 82% increase in annual sales to South Korea, from $582 million in 2012 to $1.06 billion in 2016," officials from the National Cattlemen's Beef Association, North American Meat Institute and U.S. Meat Export Federation said in a letter to USTR Lighthizer and USDA Secretary Sonny Perdue.

---

WOTUS Repeal Proposal Contains Sloppy Cost Analysis: Economists

A sloppy estimate of the economic impact of repealing the Obama-era Waters of the U.S. (WOTUS) rule was used in the proposal the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers put forward to rescind the regulation, economists told Bloomberg BNA.

The proposal relies on data and assumptions that industry previously criticized, according to economists and regulatory analysts. Chief among their complaints was the agencies used recession-era economic data and failed to account for some of the benefits of leaving WOTUS in place.

Their economic analysis even drew criticism from David Sunding, a University of California-Berkeley agricultural economist who was hired by industry groups to counter the analysis the Obama administration used to back its regulation. "I am not normally this dismissive, but this is the worst regulatory analysis I have ever seen," Sunding told Bloomberg BNA in an interview. Sunding had previously criticized the Obama-era study for using "flawed" data, which he said resulted in understated costs and overstated benefits. The Trump administration's approach relies on much of the same data.

The economic analysis projected that repealing WOTUS would be a net gain for the economy because the costs avoided through repeal would be greater than the benefits that would not be realized. The proposed repeal by EPA and the Corps is the beginning of a planned two-step process that also will see the agencies draw up a replacement.

Regulatory scholars indicated that EPA's economic analysis is likely the result of the agencies’ wish to move to quickly repeal the regulation following a February executive order. EPA conducted the cost-benefit analysis because presidential executive orders and past guidance issued by the agency and the White House require an economic analysis for "significant regulatory actions," the agency told Bloomberg BNA. EPA also said it would conduct a subsequent cost-benefit analysis for its replacement regulation.

---

Washington Insider: Scientists See Nitrogen as Growing Threat to Waterways

The New York Times is reporting that threats to U.S. waterways are growing as the climate warms. The article is based on a new study reported in Science this week that predicts that increasing rainfall as the climate warms will mean more nitrogen flowing into U.S. waterways—and, that this pollution can then trigger more massive blooms of algae, floating green mats, and even dead zones with almost no oxygen.

The Science study focuses on projected increases in rain from global warming, and ties these to additional fertilizer runoff that could “trigger dead zones and massive algae blooms.” The Times says this conclusion is the result of a new study and new data. “If greenhouse gas emissions keep rising, more and heavier rain will increase nitrogen flowing into lakes, rivers and bays by about 19% by the end of the century,” the study said.

While that may not sound like much, many coastal areas are already heavily loaded with nitrogen. The report’s authors calculated that an extra 860,000 tons of nitrogen yearly will wash into American waterways by century’s end. This pollution creates “low-oxygen dead zones and harmful blooms of algae in the Gulf of Mexico, Great Lakes, Pacific Northwest and Atlantic coast.”

“Many of these coastal areas are already suffering year-in, year-out from these dead zones and algal blooms,” Anna Michalak, an ecologist at the Carnegie Institution for Science at Stanford University said. “And climate change will make it all worse.”

When waterways are overloaded with nutrients, algae growth can run amok, creating dead zones. Algae can also choke waterways with “green mats of goop on top of the water” that are giant floating blooms, Michalak said.

The study, which is based on computer simulations, found the Northeast and Midwest will be hit hardest by the increase in nitrogen runoff. Most of the excess nitrogen from fertilizer use and the burning of coal, oil and gas would flow into the Mississippi River system and into the Gulf of Mexico, one of the largest dead zones on Earth, researchers said.

“The results are incredibly interesting and compelling,” said Samantha Joye, a University of Georgia marine sciences professor who wasn’t part of the team.

“When we think about climate change, we are used to thinking about water quantity,” said Anna Michalak, a professor of global ecology at the Carnegie Institution for Science in Stanford, Calif., and one of the authors of the study. “Climate change is just as tightly linked to issues related to water quality.”

The study’s authors looked at three emissions scenarios — high, stable and falling — in both the near and far future in more than 2,100 “sub-basins” or watersheds in the continental United States.

Their results show that in the high emissions scenario, which assumes that future greenhouse gas emissions trends follow those of the past, increased precipitation alone would cause “large and robust increases” in nitrogen amounts on the watershed scale, particularly in the Upper Mississippi Atchafalaya River Basin, the Northeast and the Great Lakes basin.

In the stable emissions model, in which a rise in global surface temperatures by two degrees Celsius from preindustrial times is more than likely, the Northeast would still see a robust increase in nitrogen loading.

This is in part because the nitrogen accumulation will occur in areas that already are experiencing it, and because watersheds in the Northeast and elsewhere drain into coastal regions where nitrogen pollution is already affecting water quality, the study said.

For instance, the Chesapeake Bay has experienced a “dead zone,” a result of hypoxia, regularly since 1950. Earlier this summer, the National Oceanic and Atmospheric Administration predicted a larger than average dead zone there, despite previous efforts at reducing nutrient levels.

The most notorious dead zone in the country surrounds the mouth of the Mississippi River in the Gulf of Mexico, which this year is expected to cover an area approximately the size of Vermont, nearly 10,000 square miles, according to research from Louisiana State University.

While the researchers did not specifically model the global effects of climate change on nitrogen loading in other parts of the world, they applied their models to analogous areas outside the United States. They found that large areas of East, South and Southeast Asia may experience increases in nitrogen levels similar to those seen in the United States.

Because these regions are home to more than half of the world’s population and are heavily dependent on surface water, the authors write, the effects of increased eutrophication are likely to be stark, turning the green revolution rather brown.

So, it will be important to see whether this study and others like it convince climate skeptics to maintain, or expand, efforts to develop necessary conservation practices which are often highly controversial. For example, the administration’s budget proposal for Fiscal 2018 cut Chesapeake Bay Compact funding, but Congress restored $73 million, which will keep the EPA’s Chesapeake Bay program running at least for now. These are fights producers should watch closely as they emerge, Washington Insider believes.

---

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN’s Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the US Ag Policy, US Farm Bill and DTN Ag News sections on their News Homepage.

If you have questions for DTN Washington Insider, please email edit@dtn.com

(TN)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.