For the Week Ending May 18, 2018

USTR TO REVIEW THAILAND’S GSP TRADE BENEFITS

The Office of the U.S. Trade Representative (USTR) this week agreed with a request from the NPPC to review Thailand’s eligibility for the U.S. Generalized System of Preferences (GSP) program because of the country’s failure to provide access to its market for U.S. products, including pork. NPPC, which last month filed a GSP review petition with USTR, is urging the Trump administration to withdraw or limit the benefits Thailand receives under the preferential trade program, which gives duty-free treatment to certain goods entering the United States. The program allows for removal of a country’s benefits if it fails to provide the United States “equitable and reasonable access” to its market. Despite the United States being Thailand’s No. 1 export market, with almost $4 billion of products annually sent to America under the GSP, the southeast Asian nation has a de facto ban on U.S. pork imports through high tariffs and several non-tariffs barriers.

TIME RUNNING OUT FOR VOTE ON NEW NAFTA IN THIS CONGRESS

A congressional deadline for the Trump administration to notify lawmakers of a renegotiated North American Free Trade Agreement (NAFTA) came and went this week, without a new deal. House Speaker Paul Ryan, R-Wis., set the May 17 target so the current Congress could vote on a new NAFTA in a lame-duck session at the end of the year. Under Trade Promotion Authority (TPA), which regulates the president’s power to negotiate trade deals and gives Congress power to review and approve or reject final agreements, there are lengthy notification periods before a vote can take place. Ryan on Thursday indicated there likely is some flexibility in the deadline, depending on the duration of the U.S. International Trade Commission analysis that is required under TPA. Even with a couple of additional weeks, the odds of reaching a deal that would permit a vote in a lame-duck Congress are low. Late Thursday evening, USTR Ambassador Bob Lighthizer said the United States, Canada and Mexico “are nowhere near close to a deal.” It appears likely that a new NAFTA deal would be approved by a new Congress. NPPC continues to urge the administration to maintain zero-duty market access for U.S. pork exports to Canada and Mexico and to caution that terminating NAFTA would be detrimental for the U.S. pork industry, costing an estimated $1.5 billion.

HOUSE FARM BILL DEFEATED … FOR NOW

The House today rejected the “Agriculture and Nutrition Act of 2018” (H.R. 2), better known as the Farm Bill, by a vote of 213-198. House Agriculture Committee Chairman Michael Conaway, R-Texas, said, “We may be down, but we are not out. We will deliver a strong, new farm bill on time as the President of the United States has called on us to do.” Lawmakers next week may take up a motion, offered by House Speaker Paul Ryan, R-Wis., to reconsider the Farm Bill. The legislation includes several provisions important to U.S. pork producers. Among them is one establishing and funding a vaccine bank to deal with an outbreak in the United States of Foot-and-Mouth Disease (FMD) in livestock. The Farm Bill calls for first-year mandatory funding of $150 million for the FMD vaccine bank, $70 million in block grants to the states for disease prevention and $30 million for the National Animal Health Laboratory Network (NAHLN), which provides disease diagnostic support. For the other years of the 5-year Farm Bill, there’s $30 million in mandatory funding for state block grants and $20 million to be used at the Agriculture secretary’s discretion for the vaccine bank, the NAHLN and the states. The bill also includes an amendment, proposed by Rep. Glenn “G.T.” Thompson, R-Pa., requiring the U.S. Department of Agriculture to review the school nutrition rules designed by former first lady Michelle Obama within 90 days and to propose a new set of rules within one year. A rider sponsored by Rep. Jim Banks, R-Ind., to repeal the 2014 Waters of the United States rule was added to the legislation on a vote of 238-173.

USTR HOLDS HEARING ON CHINA 301; NEGOTIATIONS WITH CHINA CONTINUE

The Office of the U.S. Trade Representative (USTR) this week held a hearing on the impacts on American agriculture and business of U.S. restrictions on Chinese imports at which Michelle Erickson-Jones, a member of Farmers for Free Trade, testified. The restrictions, including tariffs, were imposed after USTR conducted a Section 301 – of the 1974 Trade Act – investigation that determined U.S. companies have lost billions of dollars from being forced by China to disclose intellectual property and to transfer technology. Erickson-Jones emphasized the detrimental effects the restrictions are having and will have on American farmers and ranchers, stating: “While the Section 301 tariffs are not yet in effect, the U.S. farm community is already feeling the effects of threatened tariff action, including depressed commodity prices, shipments held up at port, increased inspections and cancelled orders. This comes at a time when the industry is already facing uncertainty around re-negotiation of the North American Free Trade Agreement (NAFTA). Make no mistake about it, these market interruptions can devastate ag prices and drive U.S. farmers out of business.” Meanwhile, Chinese Vice Premier Liu He is in Washington this week as trade negotiations between the United States and China continue. Pork producers are a casualty of the trade war between the two countries, with punitive tariffs of 25 percent slapped on U.S. pork in retaliation for U.S. tariffs on Chinese aluminum and steel. NPPC continues to work closely with the administration, seeking both the removal of the 25 percent punitive tariffs and improved market access for U.S. pork in China.

HOUSE COMMITTEE APPROVES AGRICULTURAL FUNDING BILL

The House Appropriations Committee this week approved the fiscal 2019 Agriculture Appropriations bill by a vote of 31-20. The bill funds essential agricultural and food programs and services, including those related to agricultural trade, rural development and food and medical product safety. NPPC supports the bill, which includes the Newhouse amendment, directing the Secretary of Agriculture to work with other federal agencies to establish a more robust, easier-to-navigate online system for ag employers to complete the application process for H-2A visas, a temporary, seasonal agricultural worker program. In addition, the bill includes language giving the U.S. Department of Agriculture authority over lab-grown “meat” products. The Senate Committee on Appropriations is scheduled to meet next week on its version of the bill.

WHAT’S AHEAD

WORLD PORK EXPO JUNE 6-8

NPPC’s annual World Pork Expo, this year celebrating its 30th anniversary, will be held June 6-8 at the Iowa State fairgrounds in Des Moines. For more information about, and media registration for, the world’s largest pork industry trade show and exhibition, click here.