For the Week Ending July 8, 2011
Washington, July 8, 2011 -
MEXICAN TARIFF ON U.S. PORK DROPS BY HALF WITH AGREEMENT
Mexican tariffs on more than $2.4 billion of U.S. goods, including a 5 percent duty on most U.S. pork, going into Mexico today were reduced by 50 percent, following the signing Wednesday by the U.S. and Mexican governments of an agreement that will allow Mexican trucks to haul goods into the United States. NPPC, which led an agriculture coalition urging the United States to live up to its obligation on trucking under the 1994 North American Free Trade Agreement (NAFTA), called the move a “good first step.” When the first Mexican trucks are allowed – later this summer – to carry products into the United States, the duties will be suspended. The agreement resolves the long-standing trucking dispute. The NAFTA trucking provision was set to become effective in December 1995, but the United States failed to abide by it. In February 2001, a NAFTA dispute-settlement panel ruled that excluding Mexican trucks violated U.S. obligations under the trade deal. The ruling gave Mexico the right to retaliate, but the United States delayed the retaliation by implementing in September 2007 a pilot program that allowed a limited number of Mexican trucks into America. When in March 2009 Congress failed to renew the pilot program, Mexico imposed tariffs on 89 U.S. products. It added products, including pork, in August 2010 after the Obama administration failed to present a proposal for resolving the trucking dispute. Mexico is the second largest market for the U.S. pork industry, which shipped $986 million of pork south of the border in 2010. Since 1993 – the year before NAFTA was implemented – U.S. pork exports to Mexico have increased by 780 percent.
SENATE, HOUSE COMMITTEES ‘APPROVE’ FREE TRADE AGREEMENTS
The Senate Finance and the House Ways and Means committees yesterday held “mock” markups of the free trade agreements (FTAs) with Colombia, Panama and South Korea, approving the deals and clearing the way for President Obama to submit implementing legislation to Congress. When fully implemented, the FTAs will add more than $11 to the price pork producers receive for each hog and generate more than 10,000 U.S. pork industry jobs, according to Iowa State University economist Dermot Hayes. NPPC strongly supports the three FTAs and has been urging lawmakers to approve them before Congress begins its August recess.
BIPARTISAN CONCERN ABOUT GIPSA RULE’S IMPACT ON SMALL BUSINESS
Members from both sides of the political aisle of the House Small Business Subcommittee on Agriculture, Energy and Trade yesterday expressed concerns about the adverse impact on small business of the U.S. Department of Agriculture’s proposed regulation on the buying and selling of livestock and poultry – the GIPSA rule. Said Small Business Committee Chairman Sam Graves, R-Mo.: “Instituting rules and regulations without investigating the effects on our most robust job creators is reckless and completely misguided.” USDA Undersecretary of Marketing and Regulatory Programs Edward Avalos was a witness at the hearing but avoided answering lawmakers’ questions specifically, saying the agency was in the midst of finalizing the rule. Robbie LeValley a beef cattle rancher from Hotchkiss, Colo., told the subcommittee that the rule “will destroy our small business model, force us to lay off our employees, cripple our ability to market our cattle [the] way we want to and limit consumer choice.” NPPC is strongly opposed to the proposed GIPSA rule, which would cost the U.S. pork industry nearly $400 million annually. It has asked USDA to withdraw the regulation, to write a new rule consistent with the mandate Congress gave it in the 2008 Farm Bill and to complete an economic analysis of any new proposal.
PRODUCER GROUPS OPPOSE SUDSIDIES FOR ETHANOL INFRASTRUCTURE
A coalition of food-animal producer organizations, including NPPC, in a statement released yesterday stated its opposition to a “compromise” proposal on ethanol subsidies reached among Sens. Diane Feinstein, D-Calif., Amy Klobuchar, D-Minn., and John Thune, R-S.D. Under the senators’ deal, the tariff on imported ethanol and the ethanol blender’s tax credit would end immediately – rather than at the end of this year – and “savings” from the tax credit would be used for ethanol infrastructure such as pumps, pipelines and storage facilities. In its statement, the coalition said the money would be better spent on reducing the deficit or encouraging the development of energy sources that do not compete with feed needs.
FEDERAL WELFARE LAW ON EGG PRODUCTION DANGEROUS PRECEDENT, SAYS NPPC
NPPC yesterday expressed concern that federal legislation being pushed by the Humane Society of the United States (HSUS) and the United Egg Producers (UEP) would set a dangerous precedent for allowing the federal government to dictate how livestock and poultry producers raise and care for their animals. It would inject the federal government into the marketplace with no measureable benefit to public or animal health and welfare, said NPPC. HSUS and UEP yesterday announced an agreement between the two organizations on the size of cages for laying hens, moving from UEP’s standard of 64 square inches to 124 square inches over 15-18 years. HSUS agreed to stop litigation against and undercover investigations of the egg industry. The groups want the agreement codified in a federal animal welfare law that pre-empts state laws. In a press statement, NPPC said such a one-size-fits-all approach will take away producers’ freedom to operate in a way that’s best for their animals, make it difficult to respond to consumer demands, raise retail prices and take away consumer choice, devastate niche producers and, at a time of constrained budgets for agriculture, redirect valuable resources from enhancing food safety and maintaining the competitiveness of U.S. agriculture to regulating on-farm production practices for reasons other than public health and welfare. To read NPPC’s statement, click here.
CODEX FAILS FOR FOURTH YEAR TO APPROVE STANDARD FOR RACTOPAMINE
The U.N.’s Codex Alimentarius Commission, which was established by the U.N.’s Food and Agriculture Organization and its World Health Organization to promote food safety and fair practices in trade, failed to adopt a science-based standard for ractopamine, a feed additive used to promote leanness in pork and beef. Establishment of a standard will be held at the final stage before approval for the fourth consecutive year. NPPC, which attended the Codex meeting in Geneva, Switzerland, has been working with U.S. government official to get the commission to set a standard for the widely used additive. Ractopamine, like all feed additives, was evaluated and approved by the U.S. Food and Drug Administration and has been approved for use in 26 countries, including Australia, Brazil, Canada, Indonesia, Mexico, the Philippines and South Korea. A Codex panel of international scientists, including scientists from the European Union, three times has confirmed the safety of ractopamine and reaffirmed the safety of the product at this week’s commission meeting in. Despite those findings and the support of the United States, Canada and countries in Africa, Asia, Latin America, and the Pacific Islands for adoption of the standard, opposition from the European Union, China, Thailand and Russia blocked it for non-scientific reasons outside the scope of the Codex. Except for Russia, those countries ban imports of pork from pigs fed ractopamine.
NPPC WORKING TO GET RUSSIA TO ABIDE BY WTO RULES
NPPC is working with the Obama administration to obtain commitments from Russia on issues that will allow more U.S. pork to be exported there before the former Soviet Union is allowed to join the World Trade Organization (WTO). Russia has put in place barriers to pork imports, including sanitary/phytosanitary restrictions and changes to its quotas system. NPPC wants Russia to abide by all WTO trade rules and standards before it joins the WTO. Russia is an important market for the U.S. pork industry, which last year exported $204 million of pork to the country.
WHAT’S AHEAD
ADMINISTRATION’S TOP ANTITRUST OFFICIAL TO RESIGN
Christine Varney, the Assistant Attorney General of the Antitrust Division in the U.S. Department of Justice will step down effective Aug. 5. Varney, who has served in the post since April 2009, is in charge of reviewing company mergers and acquisitions. She took the lead in putting together the joint DOJ-USDA livestock competition workshops that were held last year throughout the country.
HOUSE AGRICUTLURE COMMITTEE CONTINUE TO ASSESS 2008 FARM BILL, USDA PROGRAMS
The House Agriculture Committee will continue assessing the 2008 Farm Bill and existing USDA programs. Hearings next week will focus primarily on crop programs and rural development.
Follow NPPC on Twitter, view NPPC’s Facebook page, and keep up to date with Hogs on the Hill.