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Food & Ag Policy Briefing: New US-Mexico trade dispute, high interest in CBD hearing

Also, EU proceeds with Havarti cheese protection and CAP comes in for more criticism

Agriculture groups in the United States last week raised their concerns that President Donald Trump’s threat to impose imports duties on all goods crossing the border from Mexico will result in retaliation and put the ratification of the USMCA accord into serious doubt.

As seems to be the norm now with policy announcements, Trump took to twitter to state that from June 10, the US will apply a 5% duty to Mexican goods, rising by 5% each month until it reaches 25% in October. It will then stay at this level until the U.S. is satisfied that Mexico is taking appropriate actions to stem the flow of illegal immigrants crossing the border.

The National Pork Producers Council (NPPC) appealed to Trump to reconsider the plans to open a new trade dispute with Mexico, particularly as it is less than two weeks since the country lifted tariffs on pork that were introduced in retaliation for the U.S. placing duties on steel and aluminium exports from its neighbour.

The NPPC raised concerns that the new actions will put at risk the ratification of the US-Mexico-Canada agreement to replace NAFTA, while also urging the government to settle its differences with China. The Council claims the trade disputes have combined to cost US pork producers around $2.5 billion in lost revenue.

Other sectors in the food industry, from fresh fruit and vegetables and orange juice travelling north from Mexico, and corn and French fries heading south from the United States, could all be impacted if the dispute widens.

Cannabis products

The exploding interest in the cannabis product sector from manufacturers, health professionals and farmers alike led to more than 400 stakeholders requesting to provide testimony to the FDA’s hearing on Friday (May 31).

Though the hearing was informational and was not intended to offer answers on how FDA might regulate CBD products in the future, the event generated an unusual level of interest - suggesting stakeholders embraced their first chance to share views on how FDA could crack open the door for cannabis products regulation.

In the end, only 140 stakeholders were invited to share their views due to time constraints but more than 1,100 comments have been received on the docket, well ahead of the July 2 deadline for written evidence.

Also last week, in another boost to the burgeoning industry, hemp was effectively removed from the federal list of controlled substances and can legally be transported across state lines, according to the USDA’s general counsel.

The legal opinion says the 2018 Farm Bill's provision delisting hemp from the Controlled Substances Act is "self-executing" and does not require additional action by the federal government.

GI registration

The European Union last week risked drawing further ire from the U.S. dairy industry by taking significant steps to register the Danish cheese ‘Havarti’ as a Protected Geographical Indication.

At a meeting of the Commission’s Product Quality Committee in Brussels, a majority of member state representatives voted in favour of registering Havarti as a PGI – even though many dairy producer countries regard Havarti as simply being a generic type.

And although the threshold for a qualified majority was in fact not reached, the vote means the Commission is now empowered to enact the registration under its own authority.

The EU’s move is likely to be viewed as a provocation by the United States, which is a fierce critic of the EU’s GI policy. It will also not help Commission negotiators in seeking to establish GI protection for a wide range of European regional specialities in the context of ongoing free trade agreement negotiations with Australia and New Zealand.

CAP criticisms

Two reports published last week found issues with the structure of the Common Agricultural Policy and its failure to address climate change.

An external evaluation on the relevance, effectiveness, efficiency, coherence and added value of the current CAP measures for climate action was published by the European Commission on May 27.

The measures were introduced as part of the CAP reform in 2013, but the study found that while greenhouse gas emissions dropped by 20% in the period 1990-2012, since then they have been rising slightly again.

The authors said that the need to reduce emissions from livestock and crop management “is not addressed adequately because there are no CAP measures through which member states can compel farmers to take action to reduce these particular emissions, which account for the majority of all GHG emissions from agriculture”.

Also, the Dutch Court of Auditors concluded that direct payments distributed by the Netherlands in the year 2014 were largely spent ineffectively and one in three farmers in the country who benefited from the pay outs still had an income below the minimum wage.

In contrast, more than two-thirds of income support went to farmers with a gross income that is twice the national average annual salary.

The report follows a similar French examination released in January this year that concluded the CAP’s direct payment system is now “obsolete”.

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