For the Week Ending October 20, 2017

‘GIPSA’ RULES RESCINDED IN BIG WIN FOR U.S. PORK INDSUTRY

In a major win for the U.S. pork industry, the U.S. Department of Agriculture on Tuesday announced it will rescind the “Farmer Fair Practices Rules” written in by the agency’s Grain Inspection, Packers and Stockyards Administration (GIPSA) during the Obama administration. Designed to regulate the buying and selling of livestock, the USDA announced it will take no further action on the rules. Commonly known as GIPSA, NPPC was the leading voice against the rules since because they would have unleashed a wave of costly, unwarranted litigation and inhibited competition in the pork industry. In the case of livestock contract disputes, GIPSA would have eliminated the need to prove that a contract actually harmed competition. It also would make all contract breaches federal violations of the Packers and Stockyards Act of 1921. An independent market research firm found that the GIPSA rule today would cost the U.S. pork industry more than $420 million annually – more than $4 per hog – with most of the costs related to lost market opportunities due to lawsuits and packer risk management.

NAFTA RENEGOTIATION TALKS EXTENDED

The timeframe for North American Free Trade Agreement (NAFTA) renegotiation talks was extended this week as the United States, Canada and Mexico seek alignment on controversial issues surrounding the auto industry, dairy, dispute resolutions and a “sunset clause.” The sunset clause, proposed by the United States, would prompt the termination of NAFTA every five years if a new endorsement from all three countries is not signed. Talks will resume on Nov. 17 in Mexico City, with additional rounds expected to extend into next year. NPPC continues to urge the Trump administration not to withdraw from NAFTA, to maintain zero-duty market access for pork exports to Canada and Mexico and to ensure that pork trade is not disrupted. A U.S. withdrawal from NAFTA would cost the U.S. pork industry $1.5 billion.

REGIONAL TRADE ALLIANCES BUILD MOMENTUM

As the United States continues to focus on renegotiation of existing free trade agreements, regional trade alliances are gaining momentum. At an Asia-Pacific Economic Cooperation meeting in Vietnam this week, a senior official with Japan’s finance ministry said the country remains strongly committed to a potential Trans-Pacific Partnership trade agreement with the 11 countries still actively seeking to complete the agreement following the United States’ departure. While citing the possibility of negotiating bilateral agreements, he said TPP-11 is Japan’s number one trade priority. Meanwhile, the Pacific Alliance will meet on October 23 to explore the addition of new alliance members. The Pacific Alliance – currently comprised of Chile, Colombia, Mexico and Peru – is considering Australia, Canada, New Zealand and Singapore as new members. The Pacific Alliance is an agreement that covers trade protocol and includes a visa waiver program and financial integration between member countries. Other than Columbia, these countries are also engaged in the effort to revive TPP-11, raising the prospect of an even larger multilateral Asia-Pacific trade agreement.

JAPANESE EDITORIAL CALLS FOR HARD-LINE STANCE ON POTENTIAL U.S. TRADE TALKS

A high-profile editorial in one of Japan’s major national newspapers today called on its government to stand firm against what it views as the United States’ “protectionist” trade strategy, one that it says has been on display in the U.S. handling of the NAFTA and KORUS renegotiations. Following recent discussions between Vice President Pence and Japanese trade officials, and ahead of President Trump’s visit to Japan next month, the editorial advocated against making any concessions beyond what was on the table when the Trans-Pacific Partnership agreement was negotiated. It also called for Japan to remain focused on advancing TPP-11 and its pending agreement with the European Union as the best way to compel the United States into a fair bilateral trade negotiation and a possible re-evaluation of its stance against multi-lateral trade agreements.

EPA ADMINISTRATOR ENDS ‘SUE AND SETTLE’ PRACTICE

U.S. Environmental Protection Agency Administrator Scott Pruitt this week issued a directive to end the agency’s practice of initiating “sue and settle” lawsuits aimed at imposing regulations that would not otherwise be implemented. NPPC strongly supports Administrator Pruitt’s directive.  Sue and settle is a common strategy of activist groups that has routinely been used against pork producers and the agricultural sector. In 2011, when it became apparent that NPPC was set to win its challenge against EPA’s Confined Animal Feeding Operation (CAFO) regulations, Waterkeeper and the Natural Resource Defense Council (NRDC) quickly sought a settlement with the EPA intended to undermine the imminent federal appeals court decision. This improper tactic paved the way for the EPA’s release of private and personal information of 100,000 livestock farmers.

SENATE MOVES ON TAX REFORM

Senate Republican leaders this week started the process to overhaul the U.S. tax code through a proposed budget bill. The GOP is striving to achieve tax reform through a simple majority vote, but faces significant opposition to provisions in the bill, such as increased defense spending and its impact on the federal deficit. NPPC supports comprehensive tax reform to streamline business operations, encourage investments and make the American pork industry more competitive worldwide. NPPC is advocating for a lower corporate tax rate, retention of the option for a cash accounting system, elimination of the estate tax while maintaining stepped-up basis, lower taxes on capital investments and allowing immediate expensing of capital investments, and simplification of the tax code to reduce compliance costs.

NORTHEY, IBACH NOMINATIONS PROGRESS

The U.S. Senate Committee on Agriculture, Nutrition and Forestry this week voted to confirm the nominations of Bill Northey and Gregory Ibach for top posts in the U.S. Department of Agriculture. President Trump tapped Northey, secretary of the Iowa Department of Agriculture, to be undersecretary of farm production and conservation, and Ibach, who is director of the Nebraska Department of Agriculture, to serve as undersecretary for marketing and regulatory programs. The nominations, supported by NPPC, will now move to the full Senate for consideration.

WHAT’S AHEAD

U.S. AG CENSUS ON THE HORIZON

American farmers and ranchers, including U.S. pork producers, will soon begin receiving the 2017 Census of Agriculture. The questionnaire, distributed by the U. S. Department of Agriculture’s National Agricultural Statistics Service (NASS), can be returned via mail or by online submission forms. All submissions are due Feb. 5, 2018.