POLITICO: Morning Agriculture
A daily briefing on agriculture and food policy
Canada rebooting tariff targets as 232 relief bid stalls
By HELENA BOTTEMILLER EVICH (HBottemiller@politico.com; @hbottemiller)04/09/2019 10:00 AM EDT
With help from Catherine Boudreau, John Lauinger, Alex Panetta and Oma Seddiq
— Canada is revamping its list of U.S. products facing retaliatory tariffs, its ambassador to the U.S. said Monday, in the latest sign the Trump administration isn’t moving to lift its steel and aluminum duties. Apples, pork, ethanol and wine could be on the updated list.
— As a new storm bears down on the Midwest, rail connections swamped by last month’s flooding are snarling shipments of ethanol, corn and other ag exports from Iowa, Nebraska and Missouri.
— Mexican tomato growers have offered the Commerce Department a proposal for a new agreement with the U.S. that would significantly boost the price floor for selling the fruit here.
HAPPY TUESDAY, APRIL 9! Welcome to Morning Ag, where your host thoroughly enjoyed the musical performance from the Second Amendments, led by House Agriculture Chairman Collin Peterson, last night at the North American Agricultural Journalists Association awards dinner. Congrats to all the winners. Send tips and story ideas to firstname.lastname@example.org and @hbottemiller, and follow us @Morning_Ag.
DRIVING THE DAY
CANADA REBOOTING TARIFF TARGETS AS 232 RELIEF BID STALLS: America’s northern neighbor is cranking up the pressure in its efforts to get President Donald Trump to lift the Section 232 tariffs he imposed last year on the country’s steel and aluminum exports.
Canada is refreshing the list of U.S. products it will target with retaliatory duties, David MacNaughton, Canada’s ambassador to the United States, said Monday, adding that the tariff relief talks have hit the skids, as the Canadians see things. The updated list will likely be out within the next week, he said at a North American Agricultural Journalists meeting in Washington, yours truly reported.
Ag on watch: MacNaughton said he expects “a significant number” of agricultural products to be on the new list. He said it was too early to name specific products but noted some in Canada have called for including apples, pork and ethanol. Canada, one of the largest markets for American wine, is likely to look to U.S. wine exports as well, MacNaughton said.
Don’t call it escalation: The ambassador said the goal is “not to escalate anything” — it’s just a substitute for old counter-tariffs Canada waived under its exemption programs. Canada promised dollar-for-dollar retaliation when Trump imposed the metals tariffs last year, but it has since waived more than $214 million worth of tariffs on targeted U.S. products, Canada’s Finance Department said Monday.
A Canadian Finance Department spokesperson told our Pro Canada colleagues that number could increase over time, as Canada receives new applications for product exemptions. Two other Canadian officials said more than $750 million in U.S. goods, or north of $1 billion in Canadian dollars, could ultimately be hit with new duties.
The agriculture industry wants the new U.S.-Mexico-Canada Agreement ratified — and soon. But the existence of the steel and aluminum duties threatens to derail legislative consideration of the deal in all three countries.
“There are no negotiations at the present moment,” MacNaughton said, referring to 232 relief talks. “There have been what I would describe as restating positions.”
FLOODING DISRUPTS ETHANOL SHIPMENTS: Shipments of ethanol, corn and other cargo are backed up in parts of Nebraska, Iowa and Missouri as major railways like BNSF and Union Pacific work to restore service in subdivisions pummeled by widespread flooding last month. The closures have led to shortages on the West Coast — among several reasons why gas prices jumped and forced some stations to shut down pumps, Reuters reported Monday.
In Nebraska, where 13 percent of the country’s ethanol is produced, 11 of the state’s 25 plants have been affected by the rail closures, said Megan Grimes, program manager for the Nebraska Ethanol Board.
New storm a-brewin’: Another round of blizzard-like conditions and flooding is expected to hit the Great Plains this week. USDA meteorologist Brad Rippey told Agri-Pulse that 200 water gauges in the Mississippi and Missouri river valleys are already experiencing flooding before the storm hits.
ORGANICS TRIES TO ‘FORCE THE ISSUE’ WITH TRUMP’S USDA: The organic industry is getting creative as it tries to get around the Trump administration’s hostility toward much of its regulatory agenda.
Laura Batcha, CEO of the Organic Trade Association, told reporters Monday that her industry is extremely frustrated USDA has scrapped some of its highest priorities, including an organic livestock standards rule that had been in the works for several years.
But she said OTA is working to spring regulations free where needed. The group sued the department over its withdrawal of the standards rule, and the U.S. District Court for D.C. ruled in February OTA has standing and allowed the case to advance.
“We’re optimistic about that,” Batcha said. “We think we can win that fight.” Batcha said OTA and USDA will be in briefings with the court this summer.
Congressional mandates: As another workaround, OTA is teaming up with congressional allies to try to “force” regulations, Batcha said. “The one thing USDA can respond to is a directive from Congress,” she said.
For example, USDA has 12 months from the signing of the 2018 farm bill, H.R. 2 (115), to release a rule aimed at combating organic fraud. She said that deadline could end up being key to getting the department to actually do it.
“We know that without a date certain and a forcing of the issue we’re not going to make much progress in this administration,” Batcha said.
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MEXICAN GROWERS FLOAT TOMATO COMPROMISE: Mexico’s tomato industry has made a new proposal that would increase the minimum price for selling tomatoes in the U.S., as it tries to land a deal to replace a six-year-old “suspension” agreement between the two countries, Pro Trade’s Doug Palmer reports.
Mexican growers are looking to avoid the Commerce Department restarting an anti-dumping probe that could result in steep duties on their tomatoes. Commerce has said it will withdraw from the suspension agreement on May 7 to proceed with the anti-dumping case. An attorney representing Mexico’s growers told Doug they’re prepared to fight the issue before the U.S. International Trade Commission if Commerce isn’t willing to agree to a fair deal.
Florida tomato farmers welcomed the proposal because, “for the first time, it contains some useful suggestions on how to prevent circumvention of the suspension agreement by Mexican producers,” the Florida Tomato Exchange, which initially requested the agreement get renegotiated, said in a statement.
MEXICO ON TRACK FOR LABOR REFORM PASSAGE: Mexico is poised to pass a major overhaul of its labor laws — a reform it agreed to make as part of the new North American trade deal, and a step Speaker Nancy Pelosi said must take place before the House will consider a bill to implement USMCA, Pro Trade’s Sabrina Rodriguez reports this morning.
Once the labor legislation is passed, implementation will start immediately, said Jesús Seade, Mexico’s undersecretary for North America. Pelosi said last week the House will also wait to see how the reforms are implemented, noting it will “take some time.”
— USDA is investing more than $485 million in loans to improve rural electric systems in 13 states, per an announcement Monday.
— Congress approved a water-sharing deal for the Colorado River, a waterway serving 40 million people and a broad swath of agricultural interests coping with a long-running drought. Pro Energy’s Annie Snider has more.
— Acting Interior Secretary David Bernhardt’s nomination to head the department was set up for a confirmation vote later this week. More here.
— A pair of jury verdicts finding that Bayer’s Roundup caused several plaintiffs’ cancer has shined light on companies working with outside researches on studies analyzing the safety of their consumer products, The Wall Street Journal reports.
— Dairy farmers in Minnesota say they’re struggling to secure part-time workers. At times, an extra hand is needed for two people tending to a family-owned business with a herd of more than 120 cows.
— The National Association of State Departments of Agriculture called on appropriators to fully fund the $25 million Congress authorized to stand up the new Office of Urban Agriculture and Innovative Production, along with $14 million for an urban agriculture data collection initiative. More here.
— House Agriculture Chairman Collin Peterson hired Isabel Rosa as senior counsel. She was previously an ag policy analyst with the Congressional Research Service, and did a stint in USDA’s Office of the General Counsel.
— The International Dairy Foods Association hired Matt Herrick as senior vice president of executive and strategic communications. Herrick most recently worked at the Rockefeller Foundation. He starts next week.