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READ the NAFB’s National Ag News for Monday, March 4th
Will The WTO Decision Impact China-U.S. negotiations?
The World Trade Organization found that China exceeded its agreed-on limits for government subsidies on multiple crops. Politico notes that U.S. Trade Representative Robert Lighthizer says the case could indeed become part of the negotiations and hoped-for trade deal with China. Lighthizer says there’s another WTO challenge in process that targets how China administers its import quotas on multiple agricultural products. Lighthizer told the House Ways and Means Committee last week that they’re trying to resolve those issues with China within the context of a potential agreement. White House Chief Economic Adviser Larry Kudlow told CNBC that the outlook for a deal with China is “very positive.” That’s a different outlook than the one Lighthizer had during testimony to the Ways and Means Committee in which he said, “there’s still substantial work that needs to be done.” President Trump did say last week that they’ve made “major progress” in talks with China but also acknowledged the possibility things could still collapse. During a press conference in Vietnam, Trump said, “I’m never afraid to walk away from a deal. I would do that with China, too, if it didn’t work out.” Also, on the trade front, the Trump Administration published its key objectives for a potential agreement with the United Kingdom, the first step in the process of beginning trade negotiations.
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Ag Organizations Collectively Endorse USMCA at Commodity Classic
The National Corn Growers Association, American Soybean Association, the National Association of Wheat Growers, and the National Sorghum Producers announced their collective support for the U.S.-Mexico-Canada Trade Agreement. The announcement came as the organizations took part in the Commodity Classic, held in Orlando, Florida. The groups say Mexico and Canada account for 25 percent of all U.S. agriculture exports and the USMCA preserves and builds upon the existing trading relationships between the U.S., Canada, and Mexico. Members of all four organizations will be advocating members of Congress to ratify the agreement this year. They’ll also be urging the administration to keep the current NAFTA agreement in place until the new one is ratified. NCGA President Lynn Chrisp says, “Mexico and Canada are the corn industry’s largest, most reliable market. In fact, Mexico is U.S. corn’s number one buyer.” Davie Stephens, ASA president, says, “Passage of USMCA would boost both national and rural economies, and for soybeans, it would ensure tariff-free access to two strong markets.” Wheat Growers President Jimmie Musick says, “USMCA will include tariff-free access to imported U.S. wheat for our long-time flour milling customers in Mexico.”
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Perdue Wants to Restore Original Intent of SNAP
Ag Secretary Sonny Perdue says he’d like to restore the “original intent” of the Supplemental Nutrition Assistance Program. During a Senate hearing last week, he called it a “second chance, not a way of life.” The Secretary’s comments came after the USDA published a proposed rule in the Federal Register to move more able-bodied SNAP recipients to self-sufficiency by working. The rule aims to restore what the system was meant to be, assistance through difficult times rather than lifelong dependency. The proposed rule focuses on work-related program requirements for able-bodied adults that don’t have dependents. It would apply to people between ages 18 and 49 who aren’t disabled and don’t have dependents. The rule would not apply to the disabled, pregnant women, or the elderly. Those who are eligible to receive SNAP benefits, including the underemployed, would still qualify. There haven’t been any statutory changes to the welfare reform legislation that was signed in 1996. However, an abuse of administration flexibility in the SNAP program has undermined the ideal of self-sufficiency through work. During the Senate hearing, Perdue said, “We do not believe in states where the unemployment is four percent that able-bodied-adults without dependents should be able to stay on food assistance interminably.”
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Ag Groups React to Wheeler Confirmation
Groups reacted to the announcement last week that the Senate had confirmed Acting Environmental Protection Agency Administrator Andrew Wheeler to head the agency permanently. Farm Bureau President Zippy Duvall says his organization welcomes the Senate’s confirmation of Wheeler as administrator. “This is a tribute to his deep experience and the expertise he brings to the office,” Duvall says. “Mr. Wheeler knows first-hand the impact EPA policies have on America’s economy from his previous years in the private sector. The U.S. government needs more people like him.” Growth Energy CEO Emily Skor congratulated Wheeler on his confirmation. “Giving American drivers access to affordable and renewable fuel choices starts with following through on the president’s commitment to allow E15 sales year-round on June 1 or sooner,” Skor says. Senate Ag Committee Chair Pat Roberts says he looks forward to continuing to work with the new EPA Administrator. “He’s taken the time to listen to concerns of farmers and ranchers regarding the damaging ‘Waters-of-the-U.S.’ rule,” Roberts says. “Mr. Wheeler has already demonstrated a high regard for the concerns of rural America, and I look forward to working with him on issues important to agriculture.”
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Legislation Introduced to Renew Expired Biodiesel Tax Incentive
The National Biodiesel Board thanks Senators Chuck Grassley of Iowa and Ron Wyden of Oregon for introducing legislation to extend expired biodiesel tax incentives. The legislation would provide a two-year extension of expired temporary tax incentives, including the biodiesel and renewable diesel tax incentive. The legislation also includes important tax provisions for those impacted by natural disasters. Kurt Kovarik, NBB Vice President of Federal Affairs, says his organization is hopeful the House and Senate will address the expired provisions “as soon as possible.” Congress did renew the biodiesel tax incentive in February of 2018, but only retroactively for the previous year. “Biodiesel producers have counted on the credits to secure blending contracts and financing for plant expansions and upgrades,” Kovarik says, “Now they’re facing the longest period of uncertainty ever, as the tax incentive remains expired two full months after the start of 2019.” He says stable long-term tax policy is important to continue the nation’s path to cleaner fuels and energy security.
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U.S. Share of Japan Beef Market Shrinks in January
Members of the Trans-Pacific Partnership saw their beef exports to Japan grow by more than half in the month of January. The members’ share of the market hit 56 percent, while U.S. beef exports to Japan grew 21 percent. However, the U.S. share of the market shrunk by six percent. The industry website Meating Place Dot Com says the news comes on the heels of U.S. Trade Rep Robert Lighthizer saying he’d like to begin discussions on a bilateral trade agreement with Japan in March. U.S. producers lost out on Japan’s tariff decreases, which eventually will drop to nine percent, since President Trump withdrew the U.S. from the trade pact in 2017. The Japanese Finance Ministry says TPP members Australia, Canada, New Zealand, and Mexico shipped 33,000 metric tons of beef to Japan in January, up 56 percent year over year. The tariff rate for these countries dropped from 38.5 percent after the agreement took effect down to a current 27.5 percent.
