Washington Insider -- Wednesday

Farm Bill Conference Stalls

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

US Said To Rebuff Canadian Efforts to Join US-Mexico NAFTA Talks

The U.S. has either ignored or rejected an apparent request by Canadian Foreign Minister Chrystia Freeland to join talks taking place Thursday in Washington between U.S. Trade Representative Robert Lighthizer and Mexican Economy Minister Ildefonso Guajardo, according to several media reports.

Indications are that the apparent U.S. stance has come from a view that Canada needs to make some concessions before they will be invited into the discussions. However, Canadian officials have indicated they were not wanting to offer concessions until the talks reached their final stages.

This comes as U.S. officials have signaled they may reach a NAFTA deal with Mexico before Canada. There have been no three-way talks between the NAFTA 2.0 parties since May. However, Freeland and Lighthizer have continued to discuss issues via telephone.

Still others indicate that Lighthizer may have been rubbed the wrong way by Canada's recent series of meetings with politicians and lawmakers.


US, EU Officials Still Split on What Will Be In Ag Discussions

U.S. and European Union (EU) officials continue to give different signals on what the two sides will negotiate on as part of the agreement reached last week between President Donald Trump and European Commission President Jean-Claude Juncker.

U.S. officials have taken the position the negotiations will be about all of agriculture, while the EU side insists the talks will only deal with soybeans. U.S. Trade Representative Robert Lighthizer insisted the talks will cover more than just soybeans. "We are negotiating about agriculture, period. That's part of the process," Lighthizer said at a Senate hearing.

USDA Secretary Sonny Perdue Monday reiterated that agriculture will be part of those discussions. “Certainly our USTR Rep. Lighthizer definitely plans to make agriculture a topic in these discussions going forward," Perdue said. "I think the truce that was called was, let’s see how we can have conversations for the benefit of both the United States and the EU. For us, that includes agriculture.”

Perdue also said the EU demands on geographical indicators were another issue the U.S. has with the bloc. “We feel the EU has become increasingly aggressive in their agreements and frankly we’ve become aggressive in our warnings to these countries who want to trade with us that they better be careful about accepting any kind of geographical indicators from the EU trying to brand or trademark or patent common food names that have been in the world for more than 100 years,” Perdue said.

Meanwhile, indications are that Lighthizer will lead the talks but National Economic Council chief Larry Kudlow will also play a key role in the coming discussions

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Washington Insider: Farm Bill Conference Stalls

POLITICO is reporting this week that the farm bill conference is stalled in the Senate. It notes that Senate Ag Chairman Pat Roberts, R-Kan., was hopeful that the Senate would vote last week to start formal farm bill conference talks and name its conferees. That was expected to have kept Congress on track to pass a farm bill by the Sept. 30 deadline.

However, that didn’t happen. Now, the House is out for summer recess, which means the first public meeting of the conference committee won’t take place until September at the earliest, POLITICO says. The Senate is likely to vote Wednesday — but only if Roberts and ranking member Debbie Stabenow, D-Mich., can sort out some lingering issues that have held up next steps for the bill.

One source of the delay was that Senate leaders failed to reach a deal on addressing the request of Sen. Deb Fischer, R-Neb., for a vote on her bill that would ease regulations on service hours for agricultural truckers.

Roberts has also had to juggle an attempt from Sen. John Kennedy, R-La., to revive his amendment that would require SNAP recipients to show photo ID when making purchases using benefits.

Roberts and Stabenow also have to determine who will make the final cut and be named to the conference committee, which is proving to be a difficult task because more lawmakers want to be on the panel than there are seats available.

There will be five Republicans and four Democrats named to the Senate conference committee on the farm bill, a spokesman for Senate Majority Leader Mitch McConnell, R-Ky., told DTN Political Correspondent Jerry Hagstrom late Tuesday.

The names of the conferees will be released on Wednesday.

They may be in order of seniority. That would mean the Republicans would be Roberts, Senate Majority Leader Mitch McConnell, of Kentucky, Sen. John Boozman of Arkansas, Sen. John Hoeven of North Dakota and Sen. Joni Ernst of Iowa.

The Democrats would be Senate Agriculture ranking member Debbie Stabenow of Michigan, Sen. Patrick Leahy of Vermont, Sen. Sherrod Brown of Ohio and Sen. Amy Klobuchar of Minnesota.

It would mean that neither Sen. Charles Grassley, R-Iowa, nor Sen. John Thune, R-S.D., who have differences with Roberts over the bill, would be among the conferees.

They will have to be able to hold their weight against the 47 House members chosen by Republican and Democratic leaderships to serve on the committee.

In the meantime, in a look at the general economic picture, POLITICO says that a “true bailout” that covers the full cost of a government aid package to help U.S. manufacturers, farmers and fishermen negatively affected by President Trump’s new tariffs on steel and aluminum from around the world and a host of products from China could reach $39 billion according to the U.S. Chamber of Commerce. That works out to be another $27 billion on top of the $12 billion the administration announced last week would be available to help U.S. farmers.

“While America’s agricultural industry has been hit extremely hard by escalating tariffs, it’s not alone,” Neil Bradley, U.S. Chamber executive vice president and chief policy officer said. “Thousands of U.S. companies – including manufacturers, input suppliers, fishermen, and businesses from numerous other industries – are finding it more difficult to sell American made products abroad amid the growing trade war.”

The Chamber estimates that U.S. automobile, motorcycle and parts manufacturers would need up to $7.6 billion in federal aid if the assistance promised for farmers is extended to other sectors. Chemical manufacturers would need $960 million; prepared food manufacturers, $884 million; fishermen and crabbers, $811 million; soap manufacturers, $725 million; beverage manufacturers, $765 million; shipbuilders, $632 million; and furniture makers, $567 million.

However, it seems unlikely that the administration will go the “full bailout” route. Last week U.S. Trade Representative (USTR) Robert Lighthizer told lawmakers at a Senate Appropriations subcommittee hearing the administration had no plans “at this time” to extend its farmer aid package to other sectors.

Bradley emphasized that what the business group would really like is for Trump to remove the tariffs and back off from the threat of imposing more. “The best way to protect American industries from the damaging consequences of a trade war is to avoid entering into a trade war in the first place,” he said.

However, USDA Secretary Sonny Perdue commented from Argentina where he had been since Friday, meeting with his fellow ag ministers from the Group of 20 nations. While there, he told Reuters that farmers shouldn’t expect to be completely compensated for their losses. “Obviously this is not going to make farmers whole,” Perdue said. He also said that about $7 billion to $8 billion of the aid will be in direct cash relief, while other money will go toward export promotion and buying up excess crops.

POLITICO also noted that the influential Koch network warned that President Trump’s tariffs could result in “long-term damage” to the country.

The group criticized the administration’s basic trade policy, suggesting that “whenever, in order to win on an issue someone else has to lose, it makes it very difficult to unite people and solve the problems in this country. You see that on trade: In order to get to a good place on trade, convince the American people that trade is bad,” Brian Hooks, one of Charles Koch’s top deputies, said this weekend during a briefing for reporters at the network’s gathering in Colorado.

Those comments prompted former White House chief strategist Steve Bannon to attack the network in turn. In an interview with POLITICO on Sunday, Bannon called the comments unhelpful. “We can have a theoretical discussion later, OK? This is why they don’t know what it means to win, OK?”

Still, it seems that more and more questions are being raised by the administration advocates of the “get tough” policy. In addition, it seems increasingly difficult to overlook the numerous damages from the administration tariffs especially as the trade policy advocates appear to have a major problem describing what “winning” means for the “get tough” policy hardliners, Washington Insider believes.


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