Inside D.C.

It’s all about trade

It seems these days every political agenda is all about trade as the silver bullet to jump start a lackluster U.S. economy.  When it comes to the collectively oppressed economies of some European nations, Japan and a big part of South America, the value of expanded world trade takes on even greater significance.

Currently, the U.S. is hip deep in three major trade initiatives.  The Trans-Pacific-Partnership (TPP), 12 nations on the Pacific Rim trying to eliminate tariffs across the board, has the strongest legs despite Japan’s protection of “sacred” commodities, including meats, rice, sugar and dairy.  The second is the TransAtlantic Free Trade Agreement (TAFTA) – some prefer to call it the Trans-Atlantic Trade & Investment Partnership (T-TIP) – seeking to meld U.S. and European Union (EU) markets despite seemingly monumental food safety, animal welfare and other non-economic differences, and third, President Obama’s December surprise announcement he is moving to normalize diplomatic relations with Cuba, while further loosening trade and finance restrictions.

The President has spent the last several months both cheer-leading for TPP and meeting with Asian leaders to move TPP.  And while the President keeps announcing the end is in sight, the Japanese keep moving the goal posts.  Japan wants to keep at least some level of tariff on beef and pork, while getting the U.S. to sign off on a program that will insulate Japanese farmers from major surges in U.S. meat imports.  Canada, also a party to TPP, is trying to protect its dairy producers from U.S. production, but USDA’s been charged with changing that nation’s mind.  Latest word is the whole deal is on a “two-month trajectory” to completion – the Japanese fully recognize that about May-June, all U.S. politicians will begin viewing all issues through the prism of 2016 congressional and presidential elections.

TAFTA, which if successful will be the largest free trade agreement in the world, is also struggling along, less impaired by pure economic issues and more by certain social issues.  The negotiations have snagged over the names of certain cheeses and other products which European processors contend are uniquely and historically only theirs to sell.  Call it “Parmesan” cheese and it better come from Parma, Italy; ditto “Danish” ham, or various other products with place-name trademarks and recognition.  On another front, the U.S. and EU are in hand-to-hand combat, “grappling with how to integrate production and farm animal welfare standards in the proposed agreement,” according to a Reuters report.  It’s known the EU has tried to inject animal welfare into the agreement over two dozen times, only to be rebuffed by the U.S., and similar results coming over GM crops, food ingredients and foods per se.  However, the German agriculture minister this week said in the same Reuters report, “I think this can be well achieved in the negotiations. Our allies in this area are the American consumers,” referring to the EU’s insistence on GM labeling of foods.

For Cuba, it’s a far more politically contentious battle.  For some members of Congress who were born in Cuba and whose families fled to the U.S., or who represent large populations of Cuban-Americans, the Obama announcement is their worst nightmare.  The President can open embassies and let more folks travel to the island nation, but full and open trade is Congress’ ballgame because the U.S. trade embargo was part of a 1963 law enacted by Congress.  Sens. Marco Rubio (R, FL) and Bob Menendez (D, NJ) rarely agree on most issues, but in the case of Cuban trade they speak as one when they vow to block any move to remove the embargo.  This is not good news to agriculture which wants to see the embargo disappear.  To that end, there is now the U.S. Agriculture Coalition for Cuba, 30 ag groups and companies who want even greater expanded trade and a lifting of the trade embargo imposed in 1963.

The three agreements all need congressional approval once negotiations are finalized, and key to the speed by which the U.S. can wrap these up will be what’s called trade promotion authority (TPA) or “fast track” authority.  TPA lets the President’s team negotiate their deals knowing Congress can either approve or reject the treaty, no amendments allowed.  Without fast track authority Congress can change a treaty anyway it wishes.

Congress must authorize TPA for the President, and with a GOP-controlled Congress that means the President needs to go hat in hand to leadership and ask for that authority.   Republicans, at least right now, are of a mind to give him fast track with Sen. Orrin Hatch (R, UT), chair of the Senate Finance Committee, and Rep. Paul Ryan (R, WI), chair of House Ways & Means Committee, both placing TPA at the top of their must-do lists, seeing the three trade initiatives as huge economic drivers for the economy at large.

The funny thing is, while Obama wants TPA and the Republicans want to give him TPA, it’s his own party which is not quite sure that’s a good idea.  Rep. Rosa DeLauro (D, CT) leads a bunch of House Democrats which contends the President hasn’t paid enough attention to Congress, and shouldn’t get TPA unless it’s tied to congressional consultations to ensure labor, environment and human rights standards are maintained in all trade treaties.

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