For the Week Ending November 22, 2019

CHINA INVITES U.S. TRADE OFFICIALS TO BEIJING FOR NEW ROUND OF TALKS
China’s top trade negotiator has invited U.S. officials to Beijing for further trade talks. The invitation was made during a phone call late last week, inviting U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to China. U.S. negotiators have indicated a willingness to meet, but it’s unclear if the two sides can do so before next Thursday, China’s preferred deadline. As previously announced, an interim trade deal between China and the U.S. would include a pledge for China to buy $40 billion-$50 billion in U.S. agricultural products, including pork. A trade deal between the two countries is NPPC’s top priority, and we are urging the U.S. to press China to permanently exclude U.S. pork from all tariffs in China for five years. With African swine fever dramatically reducing domestic production in China, the United States is well positioned to meet the country’s need for safe, nutritious and affordable pork and to manage an emerging food price inflation challenge. In doing so, U.S. pork can single handedly put a huge dent in the United States’ trade imbalance with China.   

JAPAN’S LOWER HOUSE APPROVES U.S TRADE DEAL
The U.S.-Japan deal inched closer to ratification this week. On Tuesday, Japan’s Lower House of Parliament approved the trade agreement and it is expected to be voted on in Japan’s Upper House before the current parliamentary session ends on Dec. 9. The trade deal was signed in early October and it’s expected to be implemented by Jan. 1, 2020. Once implemented, the trade agreement will place U.S. pork producers back on a level playing field with international competitors in one of our most important export markets. Dr. Dermot Hayes, an economist at Iowa State University, estimates exports to Japan could grow from $1.6 billion in 2018 to more than $2.2 billion over the next 15 years under market access terms included in the agreement.  

PELOSI: USMCA VOTE MAY SLIP TO NEXT YEAR
While indicating she was eager to complete passage of the U.S.-Mexico-Canada (USMCA) trade agreement, House Speaker Nancy Pelosi (D-Calif.) tempered expectations on Thursday, saying a vote may not occur until next year. “I’m not even sure if we came to an agreement today that it would be enough time to finish [this year], but just depends on how much agreement we come to,” she said. The U.S. House is in recess next week for the Thanksgiving holiday and there are a limited number of days that Congress is in session through the end of the year. Pelosi met Thursday with U.S. Trade Representative Robert Lighthizer and House Ways and Means Committee Chairman Richard Neal (D-Mass.) to discuss the progress of USMCA ratification. No agreement was reached, but a spokesman for Pelosi said the meeting was productive. “Progress was made in narrowing the differences, and work continues. We can reach an agreement on USMCA when the Trade Representative makes the agreement enforceable for American workers.” Several issues, including labor enforcement, remain unresolved. Since the trade agreement was signed last November, NPPC and its members have been aggressively working to ensure ratification, allowing the U.S. pork industry to maintain zero-duty market access to two of its largest export markets. NPPC urges Congress to quickly reach consensus on any outstanding issues and swiftly bring USMCA up for a vote.

HOUSE COMMITTEE APPROVES AG LABOR BILL
The House Judiciary Committee approved legislation on Wednesday that attempts to address the severe labor shortage in U.S. agriculture. H.R. 4916, the Farm Workforce Modernization Act, would expand the H-2A foreign guestworker program and provide a path to legalization for farm workers. The bill, whose original sponsors are Rep. Zoe Lofgren (D-Calif.) and Dan Newhouse (R-Wash.), is headed to the House floor for further action. The measure creates a new “Certified Agricultural Worker” (CAW) program that grants legal status to workers with at least 180 days of agricultural employment over the last two years, establishes a capped H-2A program for employers seeking to bring in temporary workers to fill year-round needs, and dedicates an additional 40,000 green cards per year for agricultural workers. The U.S. pork industry is suffering from a serious labor shortage both on farm and in packing plants. Without visa reform to support a sustainable workforce, production costs will increase, leading to higher food prices for consumers. While NPPC applauds the lawmakers for jumpstarting this critical conversation, we view the bill as an incomplete fix. Although NPPC fully supports opening the H-2A program to year-round labor, the bill unnecessarily caps the year-round visas at just 20,000.  A cap of the year-round program unfairly biases seasonal agricultural industries over hog and other livestock producers that need more than just seasonal workforces. The measure further disadvantages pork producers by reserving half of the year-round H-2A visa for the dairy industry. Finally, the bill’s changes only apply to labor on farms and not in plants.

FOUR ADDITIONAL LAWMAKERS CO-SPONSOR BILL FOR MORE AG INSPECTORS
A House bill to provide congressional funding for more U.S. Customs and Border Protection (CBP) agricultural inspectors got a boost this week when four additional lawmakers signed on as co-sponsors. U.S. Reps. David Rouzer (R-N.C.), Jeff Fortenberry (R-Neb.), Abby Finkenauer (D-Iowa) and Josh Harder (D-Calif.) joined colleagues in support of H.R. 4482, by Rep. Filemon Vela (D-Texas). There are now 15 lawmakers who support the bill, including five original co-sponsors. The bill authorizes $222 million over three years to enable CBP to hire 240 new agriculture specialists and 200 new agriculture technicians each fiscal year until the shortage is filled. The bill also authorizes 60 new canine teams over the next three years. Rep. Vela’s legislation is a companion to a Senate bill that recently passed by unanimous consent in that chamber. For more than a year, NPPC has led agriculture’s call for a solution to the ag inspector shortage to bolster the nation’s defenses against foreign animal diseases.

SECOND SHORT-TERM FUNDING BILL SIGNED INTO LAW; FUNDS GOVERNMENT THROUGH DEC. 20
This week, Congress approved and President Trump signed into law a short-term spending bill that averts a government shutdown and extends funding through Dec. 20. On Tuesday, the House approved the continuing resolution by a 231-191 vote and the Senate followed on Thursday by a 74 to 20 vote. President Trump signed the measure into law late Thursday. Without the stopgap measure, the government would have run out of funding Thursday at midnight. This is the second short-term funding extension this year; Congress approved a continuing resolution at the end of September that set up this week’s deadline. Meantime, differences remain on key spending bills, including a dispute over funding for the wall at the U.S.-Mexico border.

USDA RELEASES SECOND TRANCHE OF TRADE RETALIATION PAYMENTS
The U.S. Department of Agriculture recently announced the second tranche of 2019 Market Facilitation Program (MFP) payments will begin this week, aimed at providing trade retaliation relief to American farmers. Producers of MFP-eligible commodities were eligible to receive 25 percent of the total payment expected, in addition to the 50 percent they had already received from the 2019 MFP. As the agency announced in July, eligible U.S. pork producers will receive $11 per head based on inventory between April 1-May 15, 2019. The USDA also announced it will make pork purchases of $208 million to support its programs for the food insecure. USDA’s second trade retaliation relief package is valued at $16 billion, with $14.5 billion dedicated to producer payments, $1.4 billion for commodity purchases and $100 million through its Agricultural Trade Promotion Program to help U.S. farmers and ranchers identify and access new export markets. As USDA explained, this is the second of up to three tranches of MFP payments. “The third tranche will be evaluated as market conditions and trade opportunities dictate. If conditions warrant, the third tranche will be made in January 2020,” the agency noted. For more information, visit: www.farmers.gov/manage/mfp.

NOTICE:
Due to the upcoming U.S. Thanksgiving holiday, Capital Update will not publish next week. We will resume publication the following week.