RFS hearing | Tax reform timeline | Ross on trade policy | Farm bill timeline, issues | Perdue’s farm bill RV tour | New food safety leadership at USDA | Mexico’s NAFTA 2.0 negotiator | KORUS 2.0 | JBS | Fed’s Fischer | Infrastructure | China | Japan beef import duties
— EPA to hold hearing today on RFS mandates. The Environmental Protection Agency will hold a day-long public hearing in Washington on the proposed Renewable Volume Obligations (RVOs). While last Friday’s court decision on prior RFS announcements will likely be mentioned today by several participants, the decision will not impact the announced 2018 corn-based ethanol mandate but will impact advanced biofuel determinations.
EPA will hear from many observers today, including Iowa Gov. Kim Reynolds; Nebraska Gov. Pete Ricketts; Chris Bliley of Growth Energy; Bob Dinneen of the Renewable Fuels Association; Frank Macchiarola of the American Petroleum Institute; and Donnell Rehagen of the National Biodiesel Board. Link for details.
— Tax reform timeline. The White House expects tax reform legislation to move through Congress this fall, advancing through the House in October and clearing the Senate in November, legislative director Marc Short said Monday — an optimistic timeline to many veteran congressional analysts. Markups also will begin in September, Short said. “So that, I think, is an aggressive schedule but that is our timetable,” Short said. Short said some Democrats might get on board, particularly those up for reelection next year in states Trump carried, he said.
Meanwhile, if Republicans still want to use reconciliation to push a tax code overhaul, they first must pass a fiscal 2018 budget resolution to authorize it — and that could take some time to accomplish. Rep. Mark Meadows (R-N.C.), chairman of the ultra-conservative House Freedom Caucus, has warned the measure lacks majority support in its current form. House Budget Chairwoman Diane Black (R-Tenn.) said she was still rounding up votes for the resolution, but said the elimination of the border tax “does help me a little bit.”
In September and October, Congress also has to fund the government and lift the debt ceiling, both issues which usually take time to settle.
— Secretary of Commerce Wilbur Ross comments on trade policy issues. A Wall Street Journal op-ed by Commerce Secretary Wilbur Ross, “Free Trade is a Two-Way Street: China, the EU and other trading partners put up formidable barriers to imports from America”, notes the following (link for details):
- “Defending U.S. workers and businesses against this onslaught should not be mislabeled as protectionism. Insisting on fair trade is the best way to ensure the long-term strength of the international trading system.”
- “The Trump administration believes in free and fair trade and will use every available tool to counter the protectionism of those who pledge allegiance to free trade while violating its core principles.”
— House Ag panel leader comments on new farm bill timeline. House Agriculture Chairman Mike Conaway (R-Texas) during the panel’s field hearing in San Angelo, Texas on Monday said hat he wants to get a farm bill on the House floor by the end of this year, in line with his Senate counterpart, Pat Roberts (R-Kan.). “The drama associated with expiration and short-term extensions and permanent law threats... I hope you need to go to a different theater to experience that this time, because we’re going to get it done,” Conaway said.
Key issues discussed. As expected, key topics during the field hearing were requests returning cotton to the Title I safety net program, improving livestock disaster assistance and strengthening conservation programs. Several participants noted the lack of equity needed to secure financing; the rise in the cost of pesticides, seeds, and equipment while commodity prices slump; and the deteriorating economic condition of rural America.
— Perdue to start farm bill tour on Thursday. USDA Secretary Sonny Perdue on Thursday will begin a five-state farm bill tour via RV, beginning Thursday at the Wisconsin State Fair. Labeled “Back to Our Roots”, the tour will also see him in Minnesota, Iowa, Illinois and Indiana. Listening sessions in those states will allow him to hear from producers and consumers across the country who are “on the front lines of American agriculture and … know best what the current issues are,” Perdue said in a statement. “USDA will be intimately involved as Congress deliberates and formulates the 2018 Farm Bill,” Perdue said. “We are committed to making the resources and the research available so that Congress can make good, facts-based, data-driven decisions. It’s important to look at past practices to see what has worked and what has not worked, so that we create a farm bill for the future that will be embraced by American agriculture in 2018.” A second RV tour is planned for later this summer.
— New FSIS/food safety leadership at USDA. USDA Secretary Sonny Perdue announced that beginning today, Carmen Rottenberg will be the Acting Deputy Undersecretary for Food Safety. This appointment follows nearly six years in leadership roles for Rottenberg in the Food Safety and Inspection Service’s (FSIS’) Office of the Administrator, including serving as the Chief of Staff, the Chief Operating Officer and, most recently, the Deputy Administrator. Paul Kiecker will now be the Acting Administrator. Since joining FSIS in 1988 as a food inspector, Kiecker has served in a number of roles at the Agency. Most recently, Kiecker served as Deputy Assistant Administrator for the Office of Field Operations (OFO).
Al Almanza, former administrator of the USDA Food Safety and Inspection Service, retired on Monday after 39 years at the agency. Almanza said highlights of his tenure include modernizing the poultry inspection system, reducing foodborne illnesses from listeriosis and E. coli and implementing stricter performance standards for campylobacter and salmonella in poultry.
— Mexico announces chief NAFTA 2.0 negotiator. Mexico named Kenneth Smith Ramos on Monday to be its chief technical negotiator in NAFTA renegotiations. Ramos, head of the trade and NAFTA office at the Mexican Embassy in Washington, will work just below Economy Secretary Ildefonso Guajardo and Undersecretary for Foreign Trade Juan Carlos Baker in leading the negotiations. Guajardo on Monday noted Ramos’ prior work in Mexico’s agriculture department as well as its economy ministry. “He is a man who has had a very, very long, intense and brilliant career in all foreign trade topics,” Guajardo said.
Meanwhile, President Donald Trump is keeping as his top envoy in Mexico, Roberta Jacobson, an expert promoted under Hillary Clinton and chosen by President Barack Obama. With NAFTA 2.0 talks scheduled to start on Aug. 16, key players are in place. Jacobson was nominated by Obama in June 2015, but her confirmation took almost a year, held up by Sen. Marco Rubio (R-Fla.) over her role in improving the U.S. relationship with Cuba as assistant secretary of State. Trump has undone parts of that rapprochement.
— KORUS a top agenda item for new South Korean trade minister. The administration of South Korean President Moon Jae-in tapped the chief negotiator of the Korea-U.S. Free Trade Agreement (KORUS) to be the country’s trade minister, government officials said. Kim Hyun-chong’s leadership on the five-year-old KORUS, as the trade pact is known, will come in handy as Seoul works on renegotiating the agreement per a request by President Donald Trump. “Kim … is a specialist in the field of economy and trade and is expected to resolve general trade issues based on his experience and know-how accumulated through his work concluding FTAs with major trading partners,” the presidential Blue House said during a briefing July 30.
The World Trade Organization’s seven-member panel of arbiters was reduced to five following South Korea’s announcement that Kim Hyun-chong will resign to negotiate the KORUS.
Paik Un-gyu, minister for trade, industry, and energy who was appointed July 24, responded with a counterproposal to kick off talks once the trade minister is appointed. The U.S. is reportedly reviewing the counterproposal.
U.S. Trade Representative (USTR) Robert Lighthizer July 12 formally notified South Korea that the U.S. is calling a special joint committee meeting within the next 30 days to start the KORUS renegotiation process. The U.S. wants to amend the deal, which the Trump administration has said is responsible for the $27.7 billion U.S. trade in goods deficit with South Korea.
Agriculture, Food, and Rural Affairs Minister Kim Yung-rok has vowed that no concessions on farming issues should be allowed in the deal, adding that rice should stay off the list.
— JBS said to enlist BNP Paribas to help sell Moy Park unit. Brazilian meat packer JBS has tapped French bank BNP Paribas to help it sell its Moy Park Ltd. unit which it put up for sale. JBS has been struggling to generate cash and announced plans June 20 to sell the Ireland-based Moy Park. Reports indicate that several firms are interested in purchasing Moy Park, and JBS tapped the French lending to see if that interest would translate into a sale. Those interested in Moy Park, according to reports, interest has come in from China’s WH Group and subsidiary Smithfield Foods, buyout firm CapVest Partners LLP, Louis Dreyfus Co and Groupe Bigard, as well as British foodmaker Two Sisters Food Group.
— Fed’s Fischer signals now it’s up to fiscal and government policy re: US economy. Monetary policy needs to take a backseat now in the policy arena, with Fed Vice Chair Stanley Fischer telling a Brazilian audience fiscal policy and government policy need to move to the forefront. Plus, he noted uncertainties on the policy side are holding the US economy back. “Uncertainty about the outlook for government policy in health care, regulation, taxes, and trade can cause firms to delay projects until the policy environment clarifies,” Fischer said. “Policies to boost productivity growth and the longer-run potential of the economy are more likely to be found in effective fiscal and regulatory measures than in central bank actions.”
— Infrastructure still on White House checklist. White House press secretary Sarah Huckabee Sanders on Monday said that infrastructure is still on President Donald Trump’s agenda. “The president’s been very outspoken on the need for a massive overhaul to the country’s infrastructure system, and that’s certainly still a priority — both legislative and in any capacity that he has the ability to carry that out,” she said.
— China’s Caixin manufacturing PMI came in at a four-month high of 51.1 in July, up from June’s 50.4.
Separately, China lashed out at the U.S. over North Korea, saying Washington was ratcheting up tensions with Pyongyang and violating U.N. Security Council resolutions through its plan to impose unilateral sanctions.
— Japan Finance Minister Aso: beef import duties to be discussed later this year. Increased Japanese import duties on imports of beef from some countries under “safeguard” provisions via the WTO will be discussed later this year, Japanese Finance Minister Taro Aso told reporters. “I’m aware of the U.S. agriculture secretary’s concern,” Aso told reporters after a cabinet meeting in Tokyo. “This measure would be abolished if the TPP (Trans-Pacific Partnership) were implemented, but it remains because the U.S. withdrew from TPP.” The length of time to gauge shipments is a point of discussion ahead, Aso acknowledged. “It’s true there have been debates that the span of time (used in tariff reviews) should be extended from the current three months,” Aso stated. “There’s room for consideration and we are likely to discuss issues of this kind in our economic dialogue.” A second round of bilateral economic talks between the U.S. and Japan are expected later this year.
