For the Week Ending June 29, 2018

NPPC’S GIORDANO SAYS PORK PRODUCERS NEED RELIEF FROM EFFECTS OF TRADE DISPUTES

Pork producers need relief soon from the economic pain they are suffering because of ongoing trade disputes between the United States and China and Mexico, NPPC’s Nick Giordano, vice president and counsel, global government affairs, Friday told attendees at a Global Business Dialogue event: What’s in a Name? The Tariffs, National Security, and the WTO. Giordano was on a panel with Scott Paul, Alliance for American Manufacturing; Rufus Yerxa, National Foreign Trade Council; Jennifer Hillman, Georgetown University Law School and former member of the World Trade Organization’s dispute settlement Appellate Body; and moderator John Magnus, TradeWins LLC. As a result of retaliatory tariffs put on U.S. pork by China and, more recently, by Mexico, American pork producers are facing severe financial challenges, said Giordano. According to Iowa State University economist Dermot Hayes, hog futures have dropped by $18 per animal, amounting to a $2.2 billion loss on an annualized basis, since March 1 when speculation began about U.S. pork access to the Chinese market. The market disruptions, said Giordano, come at a time when U.S. pork is expanding production to record levels. Last year, the U.S. pork industry shipped more than half of its $6.5 billion in exports to Canada ($792 million), China ($1.1 billion) and Mexico ($1.5 billion). He urged the Trump administration to provide producers some relief as soon as possible. Also, this week, six members of the Iowa congressional delegation asked President Trump to quickly resolve the trade disputes with China and Mexico. They pointed out that farmers are experiencing a five-year, 52 percent downturn in the agricultural economy.

FARM BILL HEADS TO HOUSE-SENATE CONFERENCE

The 2018 Farm Bill will be hammered out in a House-Senate conference committee, where lawmakers must reconcile differences between the lower chamber measure approved last week and the upper chamber one passed yesterday. Both bills include language establishing a vaccine bank to address an outbreak of Foot-and-Mouth Disease (FMD). The House bill calls for first-year mandatory funding of $150 million for the 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 diagnostic support to assist in managing diseases; for years two through five, it includes $30 million for NAHLN and $20 million – to be used at the Agriculture secretary’s discretion – for the states and the vaccine bank. The Senate bill includes funding only for the NAHLN. NPPC has been urging lawmakers to include full funding – $250 million – for each year of the next five-year agricultural blueprint. Another difference between the measures: The House bill includes the NPPC-backed provision that would prohibit states from regulating agricultural practices outside their borders; the Senate bill doesn’t. Both Farm Bills do include funding for the NPPC-supported Market Access Program and the Foreign Market Development Program, which help support export markets for U.S. goods. The programs are consolidated as the International Market Development Program. During Thursday’s Senate debate on the Farm Bill, lawmakers defeated an amendment that would have severely restricted how commodity checkoff programs, including the Pork Checkoff, could use their money. House Agriculture Committee Chairman Michael Conaway, R-Texas, and Senate Agriculture, Nutrition and Forestry Committee Chairman Pat Roberts, R-Kan., indicated they want work on a final Farm Bill to begin soon. The current one expires Sept. 30.

CALIFORNIA TO VOTE ON INITIATIVE DICTATING PRODUCTION PRACTICES IN OTHER STATES

A California initiative that would require egg-laying hens to be “cage-free” and that would prohibit the sale of pork and veal from animals raised in housing the state banned in 2008 was approved for the November ballot. Animal-rights groups, including the Humane Society of the United States, collected more than 660,000 signatures for the measure – only about 366,000 were required to get it on the ballot. In 2008, California voters approved an initiative that banned so-called battery cages for egg-laying hens, gestation stalls for sows and crates for veal calves. The state legislature in 2010 outlawed the sale of eggs from hens housed in battery cages regardless of where they were raised. The 2018 initiative would extend the sales ban to pork from hogs born to sows housed in gestation stalls, beginning Jan. 1, 2022, and to veal from calves housed in crates, starting Jan. 1, 2019, anywhere in the country. (Egg farmers in the state would need to comply with the cage-free mandate by Jan. 1, 2022.) NPPC strongly opposes the initiative, which would raise food prices for consumers and restrain interstate trade, a violation of the U.S. Constitution’s Commerce Clause. The clause gives Congress absolute power to regulate trade among the states. The organization is backing a provision in the House Farm Bill that would prohibit states from regulating agricultural practices outside their borders.

VIETNAM, EU TRADE DEAL TO ENTER INTO FORCE IN 2019

A free trade agreement between Vietnam and the European Union is expected to become effective in late 2019 after the countries complete their ratification processes, according to an announcement from Vietnam this week. The southeast Asian country and the 28-nation EU economic bloc concluded trade talks in December 2015, just after the United States finished negotiations on the Trans-Pacific Partnership. Just days after taking office, President Trump withdrew the United States from that multilateral deal, which includes Vietnam and 10 other Pacific Rim countries and was renamed the Comprehensive and Progressive Trans-Pacific Partnership. With trade disputes ongoing for the United States, NPPC continues to urge the Trump administration to establish bilateral agreements with countries, beginning with ones in the Asia-Pacific region.

NPPC TAKES TO ‘THE HILL’ FOR NAFTA LOBBY DAY

NPPC Director of International Affairs Maria Zieba was on Capitol Hill this week for the U.S. Chamber of Commerce-organized lobby day on the North American Free Trade Agreement (NAFTA). Zieba told members of Congress that termination of NAFTA would result in devastating consequences for the U.S. economy and would cost the U.S. pork industry $1.5 billion. With current trade disputes continuing, protecting and maintaining zero-duty market access into Canada and Mexico is more important than ever for America’s pork producers and remains a top priority for NPPC.

NPPC SUPPORTS CLARK FOR JUSTICE DEPARTMENT POST

NPPC this week signed onto a letter to the U.S. Senate expressing support for the nomination of Jeffrey Bossert Clark to be assistant attorney general for the Justice Department’s Environment and Natural Resources Division (ENRD). Clark, currently a partner in the Washington, D.C., law office of Kirkland & Ellis, has experience in environmental law, having been involved with the Clean Air Act, Clean Water Act and National Environmental Policy Act, among others. He also served as deputy assistant attorney general for the ENRD from 2001 to 2005. Clark was nominated in June 2017 and approved by the Senate Judiciary Committee in January 2018. NPPC and 25 other organizations on the letter urged the Senate to swiftly confirm Clark.

COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP MOVES FORWARD

Legislatures of the countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have begun their respective ratifications of the trade deal, with Japan’s Diet expected to approve it today. The multilateral agreement was signed by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam on March 8. Mexico ratified the agreement in April, and several of the other countries likely will ratify the CPTPP over the next few months. The ratification process is expected to conclude by early 2019. The agreement will enter into force 60 days after at least six of the 11 countries complete their ratification procedures. The CPTPP threatens to reduce U.S. pork’s global market share, warned NPPC. It 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.

WHAT’S AHEAD

TPA WILL RENEW

President Trump will win renewal of Trade Promotion Authority (TPA) for another three years after the House and Senate chose not to pass before a June 30 deadline a resolution of disapproval that would have denied him the extension. TPA defines objectives and priorities for trade agreements the United States negotiates and establishes consultation and notification requirements for the president to follow throughout the negotiation process and is vital to finalizing free trade agreements that can boost U.S. pork exports. Under TPA, once trade negotiators finalize a deal, Congress gets to review it and vote – without amendments – to approve or reject it.