Food & Ag Policy Briefing: US trade agenda, Farm Bill timelines, CAP splits and Brexit
US trade officials last week discussed priorities with House committees, while in Europe differences are emerging between France and Germany on the CAP post-2020
With trade talks between the US and China concluding without an overall agreement, but with commitments on the US not raising tariffs beyond current levels and China promising to purchase more agricultural goods, attention turned to other trade matters last week, including USMCA.
This article provides a review of the most significant talking points in the food and agriculture policy sphere for the past seven days. Select the links below to access the full story. To add channels or to take a free trial follow this link or see the instructions on the article page.
USMCA tops US trade priorities
US Trade Representative Robert Lighthizer told the House Ways & Means Committee on Friday (March 1) that failing to pass the revised US-Canada-Mexico (USMCA) agreement would be a “catastrophe”, adding that “there is no trade program” if the deal fails to be adopted.
While Lighthizer did not detail the timeline for lifting Section 232 tariffs on Canadian and Mexican metal imports, it is clear that this remains the most prominent stumbling block to getting USMCA across the line.
The trade official assured the Committee he was working to minimize the tariffs and trying to reach an agreement with Canada and Mexico to limit their exports of steel and aluminum into the US.
In an earlier hearing, Lighthizer had affirmed that China must implement a number of “structural changes” - especially forced technology transfer, intellectual property (IP) theft and industrial subsides – before the US would sign off on an agreement to end the current trade war.
In regard to subsidies, the US received some positive news last week after a World Trade Organisation dispute panel largely sided with the country in its claim that China had provided farmers with around US$100 billion in “illegal” farm payments between 2012 and 2015.
The panel agreed that China had provided support to producers of wheat, Indica and Japonica rice in excess of its commitment levels, but declined to rule on its claim against corn producers as the measure had already expired by the time the dispute was initiated.
Farm Bill and ASF
Away from trade, agriculture secretary Sonny Perdue told the House Ag Committee that work on the Farm Bill is still ongoing, but the dairy program will be rolled out as a priority with signup for main crop safety net programs such as the Price Loss Coverage (PLC) and Ag Risk Coverage (ARC) expected around September 1.
Finally, federal and state agriculture officials are stepping up efforts to prepare for a possible outbreak of African Swine Fever in the United States. This follows recent outbreaks in Europe, China and Vietnam.
In Europe, French President Emmanuel Macron endeared himself to the farming community by calling for an “ambitious” EU Common Agricultural Policy Budget for post-2020 that factors in issues such as Brexit.
Macron wants the current budget maintained and for the CAP to be “reinvented” to reflect the challenges facing the agriculture sector.
But this seemingly puts France in direct opposition to Germany, with the government there considering that it already pays too much for farming support, and appears to be in favour of member states co-funding direct subsidies in the new CAP.
Brexit uncertainty persists
In the UK, it was an eventful week on the Brexit front. With the current deadline for the UK’s departure from the EU now only 25 days away, prime minister Theresa May has set a roadmap for Parliament to vote on the Withdrawal Agreement again on March 13.
If it again fails to pass the Commons, a vote to request of the EU 27 an extension of Article 50 beyond the end of March will be tabled (the announcement of which prompted UK farming minister George Eustice to hand in his resignation).
Should the extension vote succeed, EU leaders will consider the request at the EU Summit meeting on March 21-22.
Should neither vote make it through Parliament, the UK will exit the European Union without a deal, meaning a ‘cliff-edge’ moment of high tariffs for agricultural goods and only a handful of ‘rollover’ trade agreements in place.
As former OECD director of trade & agriculture Stefan Tangermann wrote in his article for IEG Policy last week, neither side wants this situation, which is why an extension of up to two years to work out the future trading relationship and solve thorny issues such as the Irish border makes sense.
In case you missed it…
Other articles of note from IEG Policy last week: