View from Washington By Steve Kopperud, Policy Directions, Inc. Complexities of Trade For an administration whose agriculture policy is predicated upon on-farm biofuels production, expanded broadband access, and increasing off-farm employment, the White House has morphed into the center of all things trade and export, particularly agricultural exports. Perhaps it’s because ag exports have been at record levels the last several years, providing one of the few bright spots in this country’s balance of trade. President Barack Obama never misses an opportunity to extol agricultural exports, having seized on this during his first term. He cites aggressive Chinese and European trade expansion that must be met, and in 2010, he promised to double overall exports by 2015. Prior to 2010, the White House talked a lot about exports, but did very little to expand markets. Today, the administration is all about multilateral and bilateral trade agreements. In early March, United States Department of Agriculture (USDA) Secretary Tom Vilsack proudly proclaimed – out of the blue – that biofuels of all sorts were now on the list of agriculture products the department will promote for export at international trade shows and other events. The White House is getting serious about expanding this nation’s agriculture exports. As this is being written, even as the Ukraine threatens to explode with Obama and Putin trading threats and literally flexing muscle, USDA continues to meet with its Russian counterpart to convince it to reaccept US pork treated with ractopamine. Agriculture broadly applauds the president’s new trade zeal, his desire for new authority – most industries are lobbying Congress to give him that new authority – and his newfound dedication to trade pacts, particularly the Trans-Pacific Partnership (TPP). TPP support is a no brainer for agriculture if one looks at the nations involved: the United States, Canada, Mexico, Australia, Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, and Vietnam. South Korea is itching to join the party and many wonder why China isn’t in the mix. The removal of nontariff trade barriers and the end of tariffs and other import restrictions on US agriculture products, including rendered animal by-products, among these nations mean huge profits if the deal is cut appropriately. This is why the administration badly wants trade promotion authority (TPA), also known as “fast track,” to deliver the TPP treaty immediately. The TPP can also help enact the US-European Union bilateral trade pact in the next president’s first term. TPA is statutory authority for the president to negotiate trade deals, and while Congress must still approve new treaties, it can’t amend them as long as the administration meets requirements included in TPA authority, such as labor and environmental protections. Potential trade partners like TPA because they have greater faith in US commitments if Congress can’t undo negotiated agreements. The wrinkle is that Congress must bestow TPA upon the president – all presidents since Ronald Reagan have enjoyed “I’m against fast track. Everyone would be well advised just not to push this right now.” ~Senate Majority Leader Harry Reid TPA, but it expired in 2007 – and the Democrat-controlled Senate has made it clear that won’t be happening soon. Senate Majority Leader Harry Reid (D-NV), calling a TPA bill “controversial,” made it very clear when he said earlier this year, “I’m against fast track. Everyone would be well advised just not to push this right now.” Reid’s reaction is no surprise; he has opposed TPA throughout his career, voting against several bilateral treaties during President George W. Bush’s administration. Reid is supported by several of his Democrat colleagues and several GOP members of the Senate as well. Opposition pivots among Democrats on a perception that a priority on trade belies the need for more aggressive domestic jobs creation and spending. Most Democrats also want to see much stronger labor and environmental protections built into any treaty the United States signs, and points to several bilateral treaties during the Bush administration where these priorities were ignored. Among Republicans and a few conservative Democrats, there’s a distinct lack of willingness to give this administration the power to negotiate long-term trade agreements without intense congressional scrutiny. For newly confirmed US Special Trade Representative Michael Froman, the lack of TPA is just one more major impediment on the road to TPP. Froman boldly predicted last autumn that TPP would be signed and sealed by the end of 2013. It’s now three months into 2014 and there’s no TPP on the horizon. The biggest problem blocking a TPP framework agreement is Japan. Including this country among the nation’s negotiating TPP was controversial as Japan has a reputation in trade negotiations to pledge one thing and, well, “reinterpret” that pledge later. In this case, there are two huge obstacles created by Japan. The first is its insistence on protecting five categories of agriculture items representing over 500 products. These products broadly fall within rice, beef, sugar, dairy, and wheat. The other is the United States’ failed effort thus far to convince Japan to open its market to US-made automobiles. At this writing, Japan and the United States were holding mid-March bilateral talks in hopes of clearing these hurdles. The United States will work to move the TPP ball forward when Obama visits Japan, South Korea, Malaysia, and the Philippines in April. The trip, rescheduled from last October when the federal government shut down, was to have been an opportunity for the president and his TPP counterparts to sign the trade agreement. No one believes the TPP will be even close to completion by April, so the president’s job goes from ceremonial pen wielder to negotiator-in-chief. R 6 April 2014 Render www.rendermagazine.com
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