Capital Update – For the Week Ending September 8, 2023

EPA and Corps Issue New WOTUS Rule  |  Upcoming IPEF talks  |  West Coast dockworkers new labor deal

EPA and Corps Issue New WOTUS Rule

What happened: The U.S. EPA, with the Army Corps of Engineers, announced a new final rule amending the definition of Waters of the United States (WOTUS) under the Clean Water Act. This controversial new rule is the agencies’ effort to conform with the United States Supreme Court ruling earlier this year in Sackett v. EPA. It is the third iteration of the WOTUS regulation in seven years and the latest development in a 30-year battle over the extent of EPA’s CWA jurisdiction. Under the new rule, two primary changes were made:

1. The rule removes the “significant nexus” test from consideration when identifying tributaries and other waters as federally protected; and
2. The new rule revises the adjacency test when identifying federally jurisdictional wetlands.

Why it matters: The WOTUS rule spells out the limits of federal jurisdiction under the Clean Water Act. For pork producers, an expansive definition of WOTUS that included farm fields and ditches would lead to significant increases in regulatory and activist pressure and take away the freedom of farmers to farm. Farmers are the originators of conservation and are taught the key to preservation is to protect their natural resources. The Supreme Court’s May decision removed the term “significant nexus” from the definition of WOTUS, and this new revision has provided significant relief for farmers. While not perfect, the latest underlying Biden Administration rules (which remain in litigation) still seek to regulate farm ditches. EPA’s actions are significant and respond to the direction of the Supreme Court.

What happens next: The changes will take effect immediately upon publication in the Federal Register, with seemingly no opportunity for public comment. The related litigation, which NPPC is part of, over the underlying Biden Administration rule will continue.

What is NPPC doing: NPPC remains active and engaged in strategy discussions concerning future litigation, agency implementation, congressional oversight, and media coverage on this issue.

IPEF Talks Should Address Market Access Issues, Says NPPC

What happened: Representatives of the countries in the Indo-Pacific Economic Framework for Prosperity are meeting in Thailand for a week of talks starting Sunday. NPPC continues to urge the Biden administration to raise unwarranted food safety, animal health and technical barriers some IPEF countries have that limit market access for U.S. pork.

The administration launched the initiative more than a year ago to forge closer economic ties among the 14 IPEF nations – Australia, Brunei, Canada, Chile, Fiji, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, South Korea, Vietnam, and the United States. The countries have completed four rounds of talks on four broad areas, including trade, but have not yet addressed tariffs or market access issues.

Why it matters: U.S. pork producers rely heavily on exports, shipping over 25% of last year’s total production worth nearly $7.7 billion to foreign destinations, the IPEF countries represent about 1.5 billion consumers and 40% of the world’s GDP.

NPPC’s take: NPPC has raised with the administration’s trade negotiators the non-tariff barriers of several IPEF countries, including:

• Australia’s limit on U.S. pork for the retail market to products that are heat-processed or frozen and boneless for further processing because of what it claims are risks associated with the transmission of Porcine Reproductive and Respiratory Syndrome (PRRS) virus to the Australian swine herd. The restrictions, NPPC has pointed out, are inconsistent with international standards and scientific findings showing pork trade does not increase the risk of transmitting PRRS.
• The Philippines’ cold storage requirement for imported meat, including pork. Domestically produced meat is exempt from the requirement, which has the effect of suppressing demand for U.S. pork and violates World Trade Organization rules related to non-discriminatory treatment of imports.
• Vietnam’s restriction on imported white offal (e.g., intestine, spleen, tongue), first through a ban on the product and now through an inconsistent approval process for allowing it into the country. In early 2014, Vietnam rescinded the import ban on white offal — it lifted a ban on red offal in 2011 — but required paperwork for importation. Many U.S. companies have completed the paperwork but are still awaiting approval from the Vietnamese government.

West Coast Dockworkers Approve New Labor Deal with Ports

What happened: West Coast dockworkers late last week agreed to a new labor contract that will keep shipping ports from San Diego to Seattle running through June 2028. The International Longshore and Warehouse Union (ILWU), representing more than 22,000 dockworkers, voted to accept the offer from the Pacific Maritime Association (PMA), representing port operators.

On August 31, Members of the ILWU voted 75% in favor of approving the new six-year agreement, which is retroactive to July 1, 2022, and covers the West Coast’s 29 port facilities. PMA member companies previously approved the labor deal.

Why it matters: About 60% of U.S. pork exports are transported by ocean freight, with the vast majority going out through West Coast ports to Asia — three of the U.S. pork industry’s top export markets are China, Japan, and South Korea.

Port disruptions, including dockworker strikes and work slowdowns related to labor contract negotiations, can jeopardize the delivery of perishable commodities, costing agricultural producers millions of dollars and, potentially, losing foreign customers.

NPPC’s take: NPPC applauds the new labor agreement, which will help ensure the continued and uninterrupted flow of U.S. exports through West Coast ports. Earlier in the year, NPPC joined 114 other agricultural and business organizations on a letter to President Biden, urging the administration to intervene in the year-long PMA-ILWU labor negotiations. NPPC wanted to avoid port disruptions such as those from late 2014 into early 2015 at West Coast ports that hurt U.S. pork exports and cost the U.S. meat industry millions of dollars in lost export sales.