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Trade; and Farm Bill- Debt Commission Issues


Sheryl Gay Stolberg and Sewell Chan reported in today’s New York Times that, “President Obama and President Lee Myung-bak of South Korea failed to reach an agreement Thursday on a long-awaited free-trade agreement, saying they had decided instead to give their negotiators more time to work out differences, which revolved around Korean imports of American autos and beef.

“The two men said at a news conference that they expected a deal to be reached soon. By soon, Mr. Obama said, he did not mean months.

“‘We want this to be done in a matter of weeks,’ he said.”

The Times article added that, “Even so, the delay is a setback for Mr. Obama, who is on a 10-day, four-nation swing through Asia that he has promoted as a mission to boost the American economy and create jobs. He has made trade — and in particular, the doubling of American exports over the next five years — a centerpiece of his agenda, and it had been widely expected that he would leave here with a deal with the South Koreans in hand.

“Negotiators worked furiously through the night to resolve the last-minute sticking points, and Mr. Obama and Mr. Lee spent two hours in private meetings on Thursday, part of that time alone.

“The two leaders discussed the trade agreement for about 40 minutes, White House officials said, but did not negotiate specific points. Ron Kirk, the United States trade representative and chief negotiator, told reporters afterward that the United States remained committed to reaching what he described as a ‘compelling’ deal to help the president achieve his goal of job growth and doubling exports over five years. ‘We think this free-trade agreement can play a central role in that,’ Mr. Kirk said, adding that it was ‘absolutely not’ a setback for the president.”

The Times article indicated that, “The announcement surprised close observers of the talks. Many had expected the two leaders to walk out with a deal in hand.

“‘It is disappointing, and it is incumbent on us to keep driving toward consensus,’ said Representative Peter Roskam, an Illinois Republican who had met the Korean foreign minister to discuss the trade accord.”

Scott Wilson and Howard Schneider reported in today’s Washington Post that, “President Obama’s inability to secure a free-trade agreement with South Korea reveals in sharp relief the limits of his leverage overseas after a devastating midterm election.

“Obama’s visit to four Asian democracies is aimed at promoting trade and other economic partnerships to boost long-term job creation in the United States, where voters pounded his Democratic Party this month over a moribund employment market.

“But after visits to India and Indonesia, where Obama on his own removed trade barriers and announced specific export contracts, the politically weakened president could not bring home the agreement that would have the most far-reaching effect on the U.S. economy.”

Bob Davis and Elizabeth Williamson reported in today’s Wall Street Journal that, “The presidents of the U.S. and South Korea were unable to overcome disputes over cars, cattle and domestic politics, potentially killing the biggest bilateral trade deal the U.S. has taken up in more than a decade.”

The Journal article noted that, “Labor leaders and some powerful politicians from both parties praised Mr. Obama for not going ahead with a deal they characterized as bad for U.S. workers. ‘President Obama is exactly right in holding out for a deal that puts working people’s interests first,’ said Richard Trumka, president of the AFL-CIO.”

The U.S. also wants Korea gradually to drop its ban on imports of U.S. beef from older cattle, which began after the U.S. had a case of mad-cow disease seven years ago. Previously thought the easier of the two issues, it is a hot button politically for Korea and prompted a walkout by Korean negotiators,” the Journal writers said.

More broadly, the Journal writers explained that, “Without presidential pressure, trade experts say the South Korea agreement, which has languished in Congress since 2007, could return to limbo along with pending trade agreements with Colombia and Panama and the dormant Doha round of global trade talks. In addition, Mr. Obama hasn’t moved to resolve a festering trade dispute with Mexico because of pressure from Democratic lawmakers and unions.”

As a side note on the Mexican trucking dispute (background here), Reuters writer Chang-Ran Kim reported yesterday that, “Mexico will slap retaliatory tariffs on a new set of U.S. goods unless Washington moves to resolve a decade-old trucking dispute and the ‘clock is ticking’ for action, Mexico’s economy minister told Reuters.

“President Felipe Calderon’s government put tariffs on U.S. pork products and other goods in August, aiming to hit exports from as many states as possible to pressure its main trading partner to allow Mexican trucks full access to U.S. highways.”

The Reuters article added that, “Mexican Economy Minister Bruno Ferrari said U.S. President Barack Obama’s administration, while sidetracked by the recent mid-term elections, had been slow to deliver a promised new proposal to resolve the issue.
‘I haven’t seen any specific plan on my desk,’ Ferrari said on Thursday in an interview in the Japanese port city of Yokohama, where he was attending a ministerial meeting of the Asia-Pacific Economic Cooperation (APEC).

He said Mexico was prepared to move on its warning of periodically shuffling the U.S. goods it hits with tariffs.”

And more specifically on the South Korean trade deal and agriculture, American Farm Bureau Federation President Bob Stallman noted earlier this week that, “The Korean free trade agreement is important for American agriculture and the U.S. economy. At full implementation of the deal, we estimate an increase of $1.8 billion in U.S. agricultural trade per year. This, combined with the other two stalled FTAs in Congress, Colombia and Panama, represents almost $3 billion in additional exports.”

And the National Pork Producers Council indicated yesterday that, “The National Pork Producers Council expressed disappointment that a final deal has not been reached between the United States and South Korea on issues related to trade in beef and automobiles. An agreement would have paved the way for the U.S.-South Korea Free Trade Agreement to be completed…The FTA would be one of the most lucrative for the U.S. pork industry, according to NPPC, which has championed the pact for more than three years now. The organization is urging resolution of the outstanding issues so that congressional lawmakers can approve the trade deal as soon as possible.”

Farm Bill- Debt Commission Issues

Chuck Haga and Ryan Johnson reported yesterday at the Grand Forks Herald (ND) Online that, “Sen. Kent Conrad, D-N.D., may leave his powerful position as chairman of the Senate Budget Committee to take the chairmanship of the Agriculture Committee.

“Conrad had indicated his intention to consider the move in conversations inside the beltway earlier in the week.”

The article added that, “During a Thursday interview with the Herald, Conrad said his leadership position on the Budget Committee is also ‘critically important’ for the next farm bill to get the resources it needs.

“‘There’s a lot to consider,’ he said. ‘In the near future, I’ll decide.’”

Yesterday’s article noted that, “Conrad serves on the president’s commission for deficit reduction, a bipartisan panel which came out Wednesday with a draft proposal that drew immediate fire from interest groups across the political spectrum.

“The draft proposal includes tax increases and plans to cut entitlement, including social security and Medicare — and farm subsidies, a proposal Conrad told the Herald he doesn’t support because the last farm bill was fully paid for without adding to the deficit.

“‘That’s about a 20 percent cut in commodity programs,’ he said. ‘It goes too far.’”

The Grand Forks Herald article added that, “Conrad appeared on MSNBC and ABC news shows Thursday morning to say he hopes President Barack Obama and Congress can come to an agreement by the end of the year on passing middle class tax cuts, which probably will require extending all of the so-called Bush tax cuts.”

On his MSNBC appearance with correspondent Chuck Todd, the following exchange took place:

“TODD: And very quickly, before I let you go, there’s been some speculation that you may move from Budget to become chairman of the Agriculture Committee. When are you going to make that decision?

“CONRAD: Soon. I am talking to constituents and colleagues.

“As you know, I have to make a decision, am I chairman of the Agriculture Committee — and we’ll be writing a new farm bill, critically important to my state and to the country as well — or do I remain as Budget Committee chairman, where, of course, we face some of the biggest challenges confronting the country?

“So that’s a significant decision to make, and I will make it soon.”

David Hawkings noted yesterday at the CQ Roll Call Daily Briefing Email that, “There’s no way 14 members of the Obama fiscal commission will vote for slaying all the budgetary sacred cows that the panel’s chairmen put on the chopping block. That’s the size of the bipartisan supermajority required for the commission to send anything to Congress. So the lame duck will not feature any votes on: boosting the gasoline tax by 15 cents, gradually raising the Social Security retirement age to 69, cutting 15 percent of weapons procurement, ending the mortgage interest deduction or starting to tax workers’ health benefits.

“Alan Simpson and Erskine Bowles are savvy politicians, serious policy wonks and clever communicators. They know their bold package is a non-starter at the commission, which will disband Dec. 1. But that wasn’t really the point of what they put forward yesterday.

Instead, their goal was to set a sober and serious marker for a debate that will dominate domestic policy in the coming decade: Here’s what it will really take to stabilize the debt and rein in deficits, they said, in effect. If Republicans think they can come up with nothing but spending cuts to get the job done, have at it. If Democrats think they can leave the social safety net alone and get the job done, go for it.”

And The Wall Street Journal editorial board opined today that, “[Pres. Obama] conceived the deficit commission as a form of political cover for his spending blowout—and to coax Republicans into a tax increase. So it’s notable that Democrats and liberals have been more critical of the chairmen’s draft than have Republicans. Having put the U.S. in a fiscal hole, Nancy Pelosi’s minority wants to oppose all spending cuts or entitlement reform to climb out.

House Republicans should react accordingly, which means taking what they like from the commission report and making it part of their own budget proposals. If Senate Democrats and Mr. Obama want to regain any fiscal credibility, they’ll be willing to listen and talk. If not, the voters will certainly have a choice in 2012.”

Michael O’Brien reported yesterday at The Hill Online that, “Fissures within the Democratic Party that were kept at bay by the midterm elections have resurfaced this week thanks to emerging debates over taxes and deficits.

“Liberal and centrist Democrats are staking out disparate positions on fiscal issues in light of a draft report issued Wednesday by the chairmen of President Obama’s fiscal commission.”

The Hill article added that, “Liberals have roundly condemned the report. One of the strongest statements came from outgoing House Speaker Nancy Pelosi (D-Calif.), who called the recommendations ‘simply unacceptable.’

But [Sen. Kent Conrad (D-ND)], a centrist in a position to shape the debate over the fiscal commission’s final proposals in the Senate, challenged critics to come up with something better.

“‘Instead of shooting this down, propose an alternative; but one that does as good a job as this one does in getting us back on a sound fiscal course,’ he said on ABC’s ‘Good Morning America.’”

Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register) that, “Farm subsidies would be slashed by $3 billion a year under a proposal being considered by President Barack Obama’s deficit commission. The proposal specifically calls cutting the $5 billion a year in fixed payments that go to grain and cotton farmers as well as reducing the Conservation Security Program authored by Sen. Tom Harkin, D-Ia., and subsidies for overseas promotion of U.S. farm products.

“Government payments to farmers and landowners have been running at about $12 billion a year, not including the cost of the federally subsidized crop insurance program. A commission aide says crop insurance would be shielded from cuts because of reductions the Agriculture Department made this year.

“Harkin’s Conservation Stewardship Program rewards farmers who take measures to reduce pollution from their farms and conserve water. Payments totaled $700 million for the fiscal year that ended Sept. 30. Such green payments benefit the public more than traditional farm subsidies, CSP supporters say.”

Mr. Brasher added that, “Congress already faces a tough budget situation when it goes to write the next farm bill, given that nearly 40 programs have no funding after 2012. The commission’s proposed cuts would squeeze the farm bill even more.

“The incoming chairman of the House Agriculture Committee, Rep. Frank Lucas, R-Okla., has already said he will resist cuts to the $5 billion in annual farm payments.

“Sen. Chuck Grassley, R-Ia., signaled today that he might support some additional reductions in farm spending although he said he wasn’t going to address the commission’s ideas until he sees on they finally agree to propose.”

Yesterday’s update noted too that, “Former Agriculture Secretary Dan Glickman said that farmers are in much better economic position than they have been in the past, given the growing demand for crops worldwide, and that cuts in government spending are inevitable.

Farm programs ‘should not be focused on helping people when times are good and that’s where we are now,’ he said.”


In other Farm Bill related news, on the broader issue of crop subsidies and obesity- earlier this week the Farm Foundation held a Forum in Washington, D.C. titled, “Obesity, Food and Agricultural Policy: What’s the Connection?

An audio replay of the event, as well as slide presentations from the Forum’s panel (Mary Muth, RTI International; Jon Doggett, National Corn Growers Association; and Michael Jacobson, Center for Science in the Public Interest) is available here, at the Farm Foundation webpage.

During the discussion portion of the Forum, Former Texas Congressman Charlie Stenholm asked panelist Michael Jacobson about the U.S. sugar program, which eventually included an interesting exchange regarding corn subsidies and obesity, a relationship that Dr. Jacobson called an “urban myth.”

To listen to this interesting clip from the Farm Foundation Forum this week, just click here (MP3- 2:19).

Keith Good