Trade Tightrope

January 30, 2018 04:29 PM
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Producers can breathe easier because of moves the Trump administration has made to ease regulatory pressure on water. Yet trade will be a top concern this year if agriculture becomes a bargaining chip in negotiations between the U.S. and other countries.

In 2018, the U.S. will continue renegotiating both NAFTA and the South Korean Free Trade Agreement, also known as KORUS, explains John Dillard, attorney at OFW Law in Washington, D.C., and a Farm Journal columnist. The U.S. is playing defense after backing out of the Trans Pacific Partnership, which has enabled China to become more influential in trade talks.

Challenges Ahead. Whether with Asia or North American partners, trade will be a volatile issue. “While NAFTA could certainly use updating, it has been largely positive for American agriculture. The U.S. is currently sticking by some provisions that are non-starters for Canada and Mexico,” Dillard says. “This could be a negotiating tactic or it could be a pretext for exiting the trade agreement. If we leave NAFTA, the negative effects on the farm economy will be hard to overstate. Also on trade, Trump is itching to levy tariffs on steel and aluminum in 2018. This could trigger a trade war with China that could ensnare agriculture as collateral damage through both increased equipment costs and retaliatory tariffs on farm products.”

Beyond trade, producers should monitor several other policy issues, according to Dillard and Todd Janzen, founder of Janzen Agricultural Law in Indianapolis.

Water Focus. Look for EPA to rescind the 2015 Waters of the United States (WOTUS) rule this year, Dillard says. “EPA is also gearing up the process to propose a new WOTUS definition that will likely take a more conservative approach to defining EPA and the U.S. Army Corps of Engineers’ jurisdiction over streams and wetlands,” Dillard adds. “I expect that we’ll see at least a proposed rule in 2018.” Litigation likely will continue for years, but he doesn’t expect farmers to feel many changes.

Pesticide Problems. Conversely, a federal case in California about neonicotinoid seed treatments, Ellis v. Housenger, could cost farmers the ability to use a major crop-protection tool if EPA loses.

“A group of environmental-activist plaintiffs allege that EPA failed to comply with the Federal Insecticide, Fungicide and Rodenticide Act and the Endangered Species Act when approving several neonicotinoid pesticides,” Dillard says. “In May, a U.S. district court held that EPA failed to conduct some of the proper studies and consultations. Now, the fight is over whether these products should be pulled off the market while EPA conducts these studies.”

Tech And Welfare. License to operate is an issue in a couple of state cases. A group of states’ attorneys general have filed cases with the U.S. Supreme Court challenging California’s law that all shelled eggs sold in the state comply with Proposition 2 cage-size requirements, Dillard says. “Similarly, there is another challenge to a Massachusetts animal welfare law. It may be a long shot, but if these cases are successful, it would end the prospect of state governments setting de facto national standards,” he says.

Farmers should also watch regulation concerning autonomous technology, Janzen adds. “The California equivalent of OSHA promulgated new rules that protect farmworkers working around driverless farm equipment moving across fields. The regulations require the driver to remain on the machine or within 10 ft. of it if guided down a furrow,” Janzen explains. “I think this is an overreaction to new technologies on the farm. Let’s hope it is not a blueprint that other state agencies follow.”

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