For the Week Ending June 15, 2018

U.S. CHINA TRADE DISPUTE ESCALATES; NPPC EVALUATING NEW CHINESE TARIFFS

President Trump today followed through on additional tariffs on Chinese goods exported to the United States, focusing significantly on products containing “industrially significant technologies.” The president announced 25 percent tariffs on $50 billion in Chinese products as China’s Ministry of Commerce vowed equal retaliatory action. Later in the day, China responded, releasing a long list of agriculture and other products that will incur new Chinese tariffs. NPPC is evaluating the impact on U.S. pork and will have more information soon. China placed a 25 percent punitive tariff on U.S. pork on April 2.  NPPC continues to urge the Trump administration to resolve trade disputes with China and other key export markets. China is the third largest value market for U.S. pork with more than $1 billion in U.S. pork shipped there last year.

SENATE BILL SETS UP GROUP TO STUDY TRUCKING REGULATIONS

Sens. John Hoeven, R-N.D., and Michael Bennet, D-Colo., this week introduced legislation to revise existing trucking regulations to make them more flexible for drivers hauling livestock. The “Modernizing Agricultural Transportation Act” would establish a working group at the Department of Transportation (DOT) to examine the federal Hours of Service (HOS) rules and the Electronic Logging Device (ELD) regulations. The HOS rules limit commercial truckers to 11 hours of driving time and 14 consecutive hours of on-duty time in any 24-hour period. Once drivers reach that limit, they must pull over and wait 10 hours before driving again. ELDs record driving time, engine hours, vehicle movement and speed, miles driven and location information, electronically reporting the data to federal and state inspectors to help enforce the HOS rules. The legislation requires the Secretary of Transportation to establish a working group within 120 days to identify obstacles to the “safe, humane, and market-efficient transport of livestock, insects, and other perishable agricultural commodities” and to develop guidelines and recommendations for regulatory or legislative action to improve the transportation of those commodities. The bill would suspend the ELD regulation for livestock haulers until the DOT secretary proposes the regulatory changes. NPPC supports the legislation as a reasonable solution for developing HOS rules that protect highway safety and allow livestock haulers to meet animal welfare standards.

SENATE FARM BILL PASSES COMMITTEE

The Senate Committee on Agriculture, Nutrition and Forestry this week approved its 2018 Farm Bill with a 20-1 vote. The bill includes language establishing a vaccine bank to address an outbreak of Foot-and-Mouth Disease (FMD). Unlike the Senate Farm Bill, the version passed in April by the House Agriculture Committee specified first-year mandatory funding of $150 million for the vaccine bank, $70 million in block grants to the states and $30 million for the National Animal Health Laboratory Network (NAHLN), which provides diagnostic support to assist in managing diseases in the United States. NPPC continues to urge lawmakers to include for each year of the next five-year Farm Bill mandatory funding of $150 million for the vaccine bank, $70 million in block grants to the states for disease prevention and $30 million for NAHLN). The full House is expected to vote on their version of the Farm Bill on June 22. The Senate is expected to consider their version of the bill by month’s end.

EPA MOVES TO REPLACE WOTUS

The U.S. Environmental Protection Agency (EPA) today moved to replace the Clean Water Act regulation issued in 2015 under the Obama administration. Known as the Waters of the U.S. rule (WOTUS), the regulation expanded the EPA’s jurisdiction over U.S. waters to include, among other water bodies, upstream waters and intermittent and ephemeral streams, such as the kind farmers use for drainage and irrigation. Last year, in litigation supported by NPPC, a federal court of appeals put a nationwide stay on WOTUS. Subsequently, the Supreme Court said authority over WOTUS belonged to a federal district court, slowing the process to block implementation of the rule. Currently, two different federal district courts, in cases covering 24 separate states, have issued injunctions against its enforcement. The Trump administration has consistently expressed its intent to repeal and replace WOTUS and today sent a new rule for review by the Office of Management and Budget.

GROUPS URGE U.S. HOUSE TO INCLUDE VISA REFORM IN IMMIGRATION AND BORDER SECURITY LEGISLATION

The National Pork Producers Council this week was one of five agricultural organization signatories on a letter addressed to U.S. House of Representatives leadership. The letter urged Congress to include the agricultural guestworker visa program, as introduced by House Judiciary Committee Chairman Bob Goodlatte’s, R-Va., Securing America’s Future Act of 2018 (H.R. 4760), in all legislative packages to address immigration and border security issues considered by the House next week. The U.S. pork industry is suffering from a serious labor shortage that undermines its commitment to the highest standards of animal care. Current visa programs widely used by pork producers are not effectively addressing the issue. Without visa reform to support a viable workforce for U.S. agriculture, animal welfare is jeopardized and production costs will increase, leading to higher food prices for consumers.

INDIA, U.S. AGREE TO TRADE AND ECONOMIC TALKS

The United States and India this week announced plans enter into discussions on expanding their bilateral trade and economic relationships. The announcement comes after Indian Commerce and Industry Minister, Suresh Prabhu, met this week with U.S. Secretary of Agriculture Sonny Perdue, U.S. Trade Representative Robert Lighthizer and U.S.  Secretary of Commerce Wilbur Ross. NPPC has been working closely with the administration to gain market access to India.

MEXICAN PRESIDENTIAL CANDIDATE SAYS NAFTA IS NOT ESSENTIAL

Mexican presidential candidate Andres Manuel Lopez Obrador this week indicated that failure between the United States, Canada and Mexico to reach an agreement on the North American Free Trade Agreement (NAFTA) would not create undue burden on Mexico’s economy. The statement comes after talks between the three countries have stalled. Mexico’s presidential election is on July 1. Talks are expected to resume this summer, though no dates have been set. NPPC continues to urge the Trump administration to maintain zero-duty market access for U.S. pork exports to Canada and Mexico.

COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP MOVES FORWARD

On March 8, 2018, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was signed by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The 11 counties forming CPTPP are in the domestic ratification process, which is expected to conclude by early 2019. Mexico and Japan are the first two countries to ratify the agreement. Canada is expected to be the next country to ratify. It is expediting the process by introducing legislation to bypass a parliamentary rule that requires it to wait 21 days after presenting the text of an agreement before it can be introduced. The CPTPP threatens to reduce U.S. pork’s global market share. NPPC is urging the Trump administration to preserve and expand U.S. pork export opportunities in the Asia-Pacific region and around the world. The council has identified free trade agreements with Japan, The Philippines and Vietnam as top priorities.

ILA-USMX REACH AGREEMENT

The International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) this week agreed to a tentative six-year contract for East and Gulf coast dockworkers. If the deal is ratified by ILA union members, uninterrupted port operations will be secured through 2024. The current USMX-ILA contract expires Sept. 30, 2018. For West Coast ports, last summer the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Alliance (PMA) reached an agreement on a three-year contract extension effective until July 1, 2022. NPPC advocates for pork logistical efficiency as 60 percent of pork exports are transported by ocean port freight. NPPC has advocated for approval of these labor contracts to reduce supply chain uncertainty.