Washington Insider-- Monday

Committees Pass Fast Track, Tough Floor Fights Remain

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Obama-Abe Meetings Raise Hopes for Pacific Rim Trade Deal

Japanese Prime Minister Shinzo Abe is in Washington this week for meetings with President Obama and key members of Congress, raising hopes for an agreement on agriculture that could help advance the Trans-Pacific Partnership free trade agreement among 12 Pacific nations.

In advance of Abe's arrival, Kenichiro Sasae, Japan's ambassador to the United States, told the press that Abe and Obama may be able to declare a deal all but completed this week, indicating that the two nations have resolved –– or are close to resolving –– their differences on trade in automotive and agricultural products. But those two issues, which include Japan's all-but-closed rice market, still present a significant barrier to an agreement.

Even if the United States and Japan are able to agree on farm and automobile trade, Congress still needs to pass trade promotion authority to enable the Trans-Pacific Partnership to take place. Committees of jurisdiction in both chambers have approved trade promotion authority legislation, but positive floor votes are far from assured.

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Environment Committee Chairman Skeptical of Reported Fracking-Earthquake Link

Senate Environment and Public Works Committee Chairman James Inhofe, R-Okla., last week told the Bloomberg news service that he remains skeptical of evidence that energy development operations in his state are connected to greater incidences of earthquakes, despite an Oklahoma agency's report linking the two. Inhofe also is the Senate's leading skeptic when it comes to climate change.

The chairman said there is significant disagreement among prominent sources about that connection and pointed to statements from the National Academy of Sciences in 2012 that there is low risk of seismic events from fracking operations.

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Inhofe's comments come after the Oklahoma Geologic Survey reported that it is "very likely" that the majority of recent earthquakes in the state were due to the injection or disposal of water associated with oil and gas production. Those findings were called significant by Republican Oklahoma Gov. Mary Fallin, who previously had echoed Inhofe's skepticism about the link between increased numbers of earthquakes and energy development operations.

Oklahoma is, of course, a major oil and gas producing state, so it should be instructive to see how this issue plays out over the coming months. This is especially true because Inhofe's home state is not the only one that has experienced an increase in earthquakes that are thought to be tied to energy extraction operations.

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Washington Insider: Committees Pass Fast Track, Tough Floor Fights Remain

Last week, House and Senate committees passed bipartisan bills to give President Obama fast-track authority to negotiate trade deals. The House committee moved its version on Thursday with House Ways and Means Committee Chairman Paul Ryan, R-Wisconsin, running interference.

The process in the Senate was messier as senators pushed hard for tough limits on currency manipulation while disagreeing about just how such a system might work. They also insisted on child labor and human-trafficking rules that experts worry could exclude Malaysia from the 12-nation Trans-Pacific Partnership deal.

The proposals being debated already included a number of tough requirements including a four-month delay between the completion of a trade accord and consideration by Congress, and a two-month public comment period before the president could finally sign a deal.

However, Congress seemed determined to raise the bar for negotiators even further. Treasury Secretary Jacob Lew has been working hard to avoid mechanical rules aimed at preventing currency manipulation, which the administration worries might backfire by giving trading partners a weapon to use against U.S. Federal Reserve policies. The administration view is that currency issues need to be dealt with carefully, at least in part through multilateral organizations like the Group of 20 largest industrial economic nations.

Clearly, this trade policy debate has a long way to go yet. For example, Speaker John Boehner, R-Ohio, told the press he expects getting TPA though the House will be a “heavy lift,” but doable. He continues to call upon the president to provide more Democratic support — a task Boehner knows will be difficult, even as the president has turned up the heat on some anti-trade voices recently.

To the delight of Republicans, the president criticized several Democrats over their arguments against the TPP charging that they “don’t know what they’re talking about.... TPP is the most progressive trade agreement in our history.” He added that “It’s got strong provisions for workers, strong provisions for the environment. And unlike some past trade agreements, all these provisions are actually enforceable.”

Obama continued: “I’ve got some good friends who are opposed to this trade agreement, but when I ask them what it is they oppose, they start talking about NAFTA. And I’m thinking ‘Well, I had just come out of law school when NAFTA was passed. That’s not the trade agreement I’m passing. So you need to tell me what’s wrong with this trade agreement, not one that was passed 25 years ago.”

"So when people say that this trade deal is bad for working families, they don't know what they're talking about, and I take that personally. My entire presidency has been about helping working families.... I've spent six and a half years trying to wrestle this economy out of the worst recession since the Great Depression, and rebuild it so that it benefits working Americans.... The Chamber of Commerce didn't elect me twice, working folks did." Tough words for a president to use with his own party — and, there almost certainly will be more to come.

Trade policy is widely seen by Democrats as a central plank in the Republican platform, and one they often find it difficult to support. As the debate has moved to the national level, the result has become increasingly bitter — and not very informative.

It still seems likely that this “reluctantly” bipartisan proposal will be passed. The issue is whether it will be so heavily encumbered with pet political “ornaments” as to be unworkable. Increasingly, this is a high-stakes process that producers should watch carefully as it proceeds, Washington Insider believes.


Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN's Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the U.S. Ag Policy, U.S. Farm Bill and DTN Ag News sections on their News Homepage.

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(GH/CZ)

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