For The Week Ending Dec. 20, 2013


The Senate Wednesday voted 64-36 to approve a two-year budget bill that purportedly will reduce the deficit by more than $20 billion. It ends the $63 billion sequestration spending cuts that were set to take effect in 2014. President Obama is expected to sign the budget legislation into law. The House last week passed the fiscal 2014-2015 bill on a 332-94 vote.


The Senate is set to adjourn late tonight for its holiday recess without extending the current Farm Bill, which expired Sept. 30. The House last week voted to extend current farm programs through Jan. 31. But without Senate action, several programs may be without funds as of Jan. 1. Negotiations among Senate and House lawmakers who are members of a Farm Bill Conference Committee have been slowed by disagreements over spending for food stamps and expanding crop insurance for farmers, among other issues. But the leaders of the committee – Senate Agriculture Chairwoman Debbie Stabenow, D-Mich., and Ranking Member Thad Cochran, R-Miss., and House Agriculture Chairman Rep. Frank Lucas, R-Okla., and Ranking Member Rep. Colin Peterson, D-Minn. – are hoping to hammer out a deal before Christmas so that conferees can consider a Farm Bill conference report the week of Jan. 6 – when Congress reconvenes. If that tentative schedule holds, House and Senate floor consideration on a conference report could occur as early as the week of Jan. 13.


A coalition of agricultural organizations led by NPPC is likely to oppose a final Trans-Pacific Partnership (TPP) trade agreement if it includes Japan but that country doesn’t agree to comprehensive trade liberalization, including elimination of tariffs on virtually all U.S. agricultural products. In a letter sent Wednesday to U.S. Trade Representative Michael Froman, 17 groups said the unwillingness of Japanese negotiators to present a comprehensive offer on agricultural products is threatening to undermine the trade talks. Japan is demanding special treatment for its agriculture sector, including exclusion from the agreement of certain “sensitive” products. The TPP is a regional trade negotiation that includes the United States, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which account for nearly 40 percent of global GDP. The agricultural organizations pointed out to Froman that, if Japan is allowed to claim exceptions for sensitive products, other TPP countries inevitably will demand the right to do the same. Countenancing such an action, they said, also will affect future trade agreements, including the Trans-Atlantic Trade and Investment Partnership now being negotiated between the United States and the European Union. If the United States can’t reach an agreement with Japan that includes comprehensive liberalization in the agricultural sector, it should conclude a TPP deal without the Asian nation, said the groups. Japan is an important market for U.S. agriculture – the fourth largest – which shipped $13.5 billion of food and agricultural products to the island nation in 2012.


A group of U.S. senators is urging U.S. Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack to push for broad market access for U.S. pork to the countries that are part of the current Trans-Pacific Partnership (TPP) trade talks. The TPP is a regional trade negotiation that includes the United States, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which account for nearly 40 percent of global GDP. In a letter circulated by Sens. Joe Donnelly, D-Ind., and Charles Grassley, R-Iowa, and sent Friday to Froman and Vilsack, 32 Senate lawmakers said the TPP talks represent an opportunity for the United States to open new markets to U.S. pork in the Asia-Pacific region, to expand existing markets and to establish a standard for future trade agreements. But, the senators pointed out, a number of the TPP nations currently have highly restrictive trade barriers that limit U.S. pork exports. Japan, for example, maintains a complex system of tariffs that reduce the volume of U.S. pork exports, while other countries have non-tariff barriers that constrain U.S. pork shipments. U.S. negotiators should insist that tariff and non-tariff barriers to U.S. pork in each TPP country be removed, action that would prompt U.S. pork exports to grow by more than 50 percent within 10 years, they said. A comprehensive TPP agreement that eliminates all tariff and non-tariff barriers to U.S. pork is strongly supported by NPPC.


President Obama Wednesday said he will nominate Sharon Bowen to succeed Bart Chilton as a commissioner of the Commodity Futures Trading Commission (CFTC). Agriculture groups wanted someone with an agricultural background; Bowen has none. She is a New York lawyer and acting chairman of the Securities Investor Protection Corporation, an organization set up by Congress to act as trustee or work with court-appointed trustees in missing asset cases to recover funds. Bowen, a Democrat, oversaw the recent MF Global case. If confirmed by the Senate, Bowen would join commissioners Mark Wetjen, a Democrat, and Scott O’Malia, a Republican. Obama already nominated Timothy Massad to succeed outgoing Chairman Gary Gensler and J. Christopher Giancarlo to replace Jill Sommers. They also must be confirmed by the Senate.


New Zealand’s Supreme Court dismissed an appeal today from the New Zealand Pork Industry Board (NZPork), allowing the importation of consumer-ready cuts of uncooked pork less than three kilograms from the United States. NZPork appealed to the Supreme Court earlier this year after the Court of Appeal and High Court decided in favor of a government risk assessment that would further liberalize market access for U.S. pork. The High Court found in favor of the New Zealand Ministry for Primary Industries and its Import Health Standard (IHS) for pork products from countries with porcine reproductive and respiratory syndrome (PRRS), including the United States. PRRS is not a food-safety issue, and there is negligible risk of PRRS transmission from the legal importation of pork from countries with the disease. Thanks to the work of experts nominated by NPPC to the New Zealand Independent Working Group and the New Zealand PRRS Expert Working Group, scientific evidence was used to illustrate the minimal risk of spreading the virus. In fact, based on a conservative risk assessment model, New Zealand’s chances of getting PRRS from legally imported uncooked pork products are such that it would get one case every 1,227 years. NPPC is also working to remove PRRS-related restrictions in Australia and South Africa.


The United States and the European Union (EU) this week held their third round of free trade talks, known as the Transatlantic Trade and Investment Partnership (TTIP) negotiations. Laurie Hueneke, NPPC director of International Trade Policy, Sanitary and Technical Issues, participated in a stakeholder forum attended by U.S. and EU negotiators and outlined the priorities for U.S. pork producers in the negotiations. The EU is the second largest market in the world for pork consumption and represents a tremendous market opportunity for U.S. pork exports. However, numerous EU barriers prevent the U.S. pork industry from exporting significant amounts of pork to the 28-member economic and political block, including multiple quotas with high in-quota duties, a ban on the use of ractopamine, mandatory trichinae mitigation, a prohibition on pathogen-reduction treatments and a costly plant approval system. NPPC will oppose any trade deal with the EU that does not eliminate all tariffs and all other barriers on U.S. pork. Removal of all EU barriers would significantly increase U.S. pork exports to the EU, creating more than 17,000 U.S. jobs, according to Iowa State University economist Dermot Hayes.



The next edition of Capital Update will be issued Jan. 10. In the meantime, from the NPPC staff, Merry Christmas, Happy Holidays and have a healthy and prosperous New Year.


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