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Updated– Trade Issues: West Coast Ports; TPP; Cuba; and, Jobs

West Coast Ports

Reuters writer Steve Gorman reported on Friday that, “The loading and unloading of cargo freighters will be suspended at all 29 U.S. West Coast ports this weekend because of chronic slowdowns on the docks that shippers and terminal operators have blamed on the dockworkers’ union, the companies said on Friday.

“However, the Pacific Maritime Association said terminal yard, rail and gate operations at the ports, which handle nearly half of U.S. maritime trade and over 70 percent of imports from Asia, will go on at the discretion of terminal managers through Saturday and Sunday, the group said.

“The announcement came as tensions mounted over negotiations on a new labor contract for 20,000 dockworkers, represented by the International Longshore and Warehouse Union, that have dragged on for nearly nine months.”

Andrew Khouri reported on the front page of the Business Section of Saturday’s Los Angeles Times that, “Each year, about 40% of the containers that come into the U.S. — filled with TVs, iPhones and clothes — passes through the twin ports of Los Angeles and Long Beach, making them the busiest in the nation and an economic engine for the Southland.

“Now, after months of crushing congestion that has left the Long Beach coast cluttered with cargo ships waiting to unload, the ports, and 27 others along the West Coast, may be on the verge of shutting down, potentially imperiling the nation’s trade with Asia and putting a dent into the regional economy.”

The article noted that, “Fears of a shutdown increased Friday. The Pacific Maritime Assn., an employer group representing shipping lines that has been locked in bitter contract talks with West Coast dockworkers for nearly nine months, said it would temporarily stop unloading ships this weekend because it doesn’t want to pay overtime to workers who it says have been deliberately slowing down operations.

“Earlier this week, Pacific Maritime Assn. President Jim McKenna said the docks are so congested that by next week the ports could become inoperable, leading the employers to shut down operations. A shutdown would have an immediate effect on port-related businesses such as truck operators and storage facilities.”

The LA Times article added that, “President Obama has not said what he would do if the ports are shut down. On Friday, White House spokesman Frank Benenati said that ‘this dispute is up to the two parties to resolve at the bargaining table, and we urge them to do so as expeditiously as possible. We continue to closely monitor the situation.’”

Erica E. Phillips reported in Saturday’s Wall Street Journal that, “The failure to resolve the problems at the West Coast ports is causing widespread pain for shippers, retailers, meat and poultry companies, and manufacturers across the country. Railroads have been reducing service to the West Coast, and for months a growing lineup of ships has sat at anchor outside the ports of Los Angeles and Long Beach.”

And Agriculture Committee member Dan Newhouse (R., Wash.) indicated in a news release on Saturday that, “Central Washington families, businesses, and farmers who depend on steady supply chains to export their products are already hurting from the months-long slowdown of port operations. This weekend’s temporary port shutdown is another dangerous sign of the devastating economic impact on the Pacific Northwest and the nation’s commerce as contract negotiations continue to drag on without resolution. I strongly urge the parties involved in the negotiations to quickly resolve their differences and end the threat of a long-term shutdown that would further harm jobs and our regional and national economy.”

UPDATED, MONDAY: Bloomberg writers Kyunghee ParkKatherine ChiglinskyKiyotaka Matsuda reported on Sunday that, “The U.S. military ordered yogurt and cottage cheese flown to forces in Japan and South Korea last month as a labor dispute began jamming up West Coast ports.

“Honda Motor Co. and Fuji Heavy Industries Ltd. resorted to airlifting parts to U.S. plants to bypass the clogged container terminals. Planes carried potatoes in the other direction so McDonald’s Corp. could end rationing of French fries in Japan.

“The shift of seaborne cargo to jets’ bellies shows how Asian airlines including ANA Holdings Inc. and Cathay Pacific Airways Ltd. are benefiting from gridlock at ports in California and Washington state. Loading and unloading of vessels at ports from San Diego to Bellingham, Washington, were suspended from Friday through Monday morning, according to the Pacific Maritime Association.”

 

Trans Pacific Partnership (TPP)

With respect to the TPP, in a “Q and A” in Saturday’s New York Times with John Harwood, U.S. Trade Representative Michael Froman indicated that, “Both parties [Democrats and Republicans] see there’s an opportunity to help promote growth, create opportunity, unlock export potential for America’s farmers, America’s small businesses. This is core to middle-class economics. There’s an interest on both sides coming out of the election to find areas that they can work together.”

Meanwhile, Chris Clayton reported on Friday at DTN (link requires subscription) that, “The Trans Pacific Partnership talks are a rare opportunity for U.S. agriculture to lower tariffs and expand market access into Japan and other emerging Asian markets, a key player in the talks told cattlemen Friday.

Darci Vetter, chief agricultural negotiator in the U.S. Trade Representative’s Office, spoke to a trade committee for the National Cattlemen’s Beef Association about the critical juncture of trade talks in the Trans Pacific Partnership and what that means for U.S. beef producers.

Closing a deal on the Trans Pacific Partnership depends on Congress approving Trade Promotion Authority for President Barack Obama, Vetter said. Currently, trade negotiators are encouraged that it looks like Congress could vote on Trade Promotion Authority this spring. One of the challenges is that few members of Congress were in office the last time the House and Senate authorized TPA for a president.”

The DTN article stated that, “‘We’re very encouraged by the momentum on the Hill on both introducing and passing Trade Promotion Authority,’ Vetter said. ‘We’re working very closely with leadership in both houses of Congress to try to get that done as soon as possible.’”

Vicki Needham reported on Sunday at The Hill Online that, “Rep. Paul Ryan (R-Wis.) is putting his muscle into reaching a deal on trade with President Obama.

“The new chairman of the House Ways and Means Committee is speaking about the trade agenda on an almost daily basis, and sending the signal that the White House and congressional Republicans can reach an agreement to approve fast-track negotiating authority, which would speed the consideration of two pending trade deals.”

And Reuters writers Ana Isabel Martinzez and Simon Gardner reported on Friday that, “Mexico expects negotiations toward a 12-nation Asia-Pacific trade pact to be finalized during the first half of this year, Foreign Minister Jose Antonio Meade said on Friday.”

 

Cuba

Reuters writer Marc Frank reported on Friday that, “With Cuba increasingly turning to suppliers who extend credit, American farmers have argued for normalizing trade with Cuba so they can better compete.

U.S. food sales of $291 million in 2014 were down from $349 million in 2013 and far from the $710 million peak in 2008, the New York-based U.S.-Cuba Trade and Economic Council said in a report obtained by Reuters ahead of its release on Friday.”

The article noted that, “A new private agricultural organization backed by U.S. Secretary of Agriculture Tom Vilsack is likely to seize on the report as an argument for ending U.S. sanctions against Cuba.”

UPDATED, MONDAYMary Anastasia O’Grady indicated in a column in Monday’s Wall Street Journal that, “Less than two months after his ‘historic’ outreach to Havana with a promise to ‘normalize relations,’ the U.S. commander in chief is getting the back of Raúl Castro ’s hand.

The column noted that, “Days before Assistant Secretary of State for Western Hemispheric Affairs Roberta Jacobson arrived in Havana on Jan. 21 for talks, the Cuban state newspaper Granma published the government’s list of ‘demands’ for normalizing relations. One of them was that the U.S. recognize Cuban state-run community groups as nongovernmental organizations. It did not name any, but the notorious ‘committees to defend the revolution,’ which exist to enforce repression by spying on the neighbors, come to mind. Also on the list published in Granma was a demand that the U.S. end its asylum program for Cuban doctors who escape while serving in third-world countries where they have been sent to work for slave wages.

“A few days later, at a summit of Latin American and Caribbean leaders in Belén, Costa Rica, the 83-year-old little brother of Fidel reiterated some of his other demands. He said that relations would not be normalized unless Washington unilaterally lifts the embargo, returns Guantanamo Bay to Cuba, ceases radio and television transmissions beamed into Cuba and makes reparations for the half-century-long embargo.”

The column also stated that, “Cuba’s top demand is that it be taken off the U.S. list of state-sponsors of terrorism. But in 2013 it was caught running weapons for North Korea. It is an Iranian ally. Last week the Colombian military intercepted 16 Russian-made antiaircraft rocket launchers bound for the Cuba-supported Colombia guerrilla group FARC.”

 

Jobs

An update on Friday from USDA stated in part that, “Agriculture Secretary Tom Vilsack today released the following statement after USDA’s Economic Research Service issued new data showing that agricultural exports support more than one million jobs here at home:

“‘More than one million people go to work every day thanks to exports of American-grown products. Expanded U.S. agricultural exports mean more new jobs, but our farmers and ranchers will miss out on new markets for American products if Congress doesn’t act on Trade Promotion Authority early this year.’”

Keith Good