Renegotiation, Not Withdrawal Is NAFTA 2.0 Focus: Treasury's Mnuchin

The Trump administration's first priority in the NAFTA 2.0 talks is to renegotiate and update the pact, Treasury Secretary Steven Mnuchin told lawmakers last week, saying he was "cautiously hopeful" about that scenario as opposed to withdrawing from the trade pact as President Donald Trump has continued to talk about. "I don't want to go through the consequences [of withdrawal] because, again, that's not our first priority," Mnuchin told the House Ways & Means Committee. "Our priority is to renegotiate the deal, and, as I said, we are actively having discussions on this."Rep. Darin LaHood (R-Ill.) asked Mnuchin if the administration had a plan in place to start negotiating bilateral trade deals rather than multilateral deals. "This is one of the top issues we're meeting on constantly," Mnuchin said. "The president's priority is bilateral, but I think he is open-minded. In Davos, he commented that if we could renegotiate the [Trans-Pacific Partnership], he would consider going into [a] multilateral [deal]." The talks are poised to pick up again in Mexico February 25, a day earlier than the initial schedule for the next round to start February 26.

Movement on USTR Nominees

Unanimous approval on the nominations of CJ Mahoney to be deputy US Trade Representative (USTR) for investment services, labor, environment, Africa, China and the Western Hemisphere, and Dennis Shea to be US ambassador to the WTO, was given Thursday by the Senate Finance Committee.Mahoney and Shea now join Jeffrey Gerrish, nominated as another deputy USTR, and Gregg Doud as chief ag negotiator as nominees awaiting approval by the full Senate. It is not yet clear when that will happen. While USTR Robert Lighthizer welcomed the action on the nominations of Mahoney and Shea, he chided the chamber for taking so long to get to this point. 

USDA Predicts Continued Growth Of U.S. Livestock Sector

Favorable returns at the start of the projection period and robust demand provide incentives for continued growth of the U.S. livestock sector over the next ten years, according to USDA. In a new report, USDA’s Economic Research Service predicted declining feed price ratios for the cattle industry reflecting lower cattle prices and suggesting lower returns to production.  In the hog industry, the feed price ratio is expected to decline and then recover some of its value before flattening out while the broiler industry is expected to experience an overall relatively stable feed price ratio.Meanwhile, both domestic and global demand for meats and dairy products are expected to remain strong. Despite the lower expected returns, red meat and poultry production all increase over the projection period.  BeefLow corn prices in the first two years of the projection period raise the beef cattle feed price ratio, helping boost production.  As cattle prices decline, the ratio also declines, slowing production.  Despite slowing cattle numbers, increased slaughter weights help contribute to production gains.  Overall, production levels are expected to rise at roughly 1 percent per year, increasing from 26.5 billion pounds in 2017 to over 29 billion by 2027.Nominal beef cattle prices drop over much of the projection period before increasing at the end of the period.  PorkThe low corn prices in the first two years also raise the hog feed price ratio, creating greater incentives to increase farrowings and continue the upward trend in pork production, with pork production expected to grow the fastest of the three. Lower pork prices decrease the feed price ratio early in the projection period, but hog prices rebound in the second half of the decade.  As with beef, increased slaughter weights contribute to the increase in pork production.  While pork production trails beef production for most of the decade, by 2027, both meats are being produced at the same level of roughly 29.1 billion pounds.ChickenBroiler prices in the next decade are expected to be relatively stable following a substantial increase in 2017.  The feed price ratios that result from stable broiler prices and moderate feed costs remain favorable for the continued expansion of broiler production. Larger numbers of birds and higher average broiler slaughter weights are also expected to contribute to broiler production growth. Turkey producers face similar price patterns as broiler producers, with an associated modest growth in turkey production over the decade.   

Trump to Sit Down with Mexican President

The North American Free Trade Agreement negotiations will be just one of the topics President Trump will discuss with the President of Mexico when they meet in the next few weeks. Bloomberg says they plan to discuss the relationship between the two countries and several pending issues. The meeting comes after several months of sometimes contentious NAFTA discussions and Trump’s insistence that Mexico pays for a border wall. Officials from both countries met recently to discuss issues like trade, immigration, security, and energy. They also agreed to set up a meeting between the two presidents in the near future. Trump was scheduled to host Enrique Pena Nieto (Ehn-ree-kay Payn-yah Nee-eh-toe) in January of last year, but Pena Nieto canceled after a dispute erupted on Twitter over the border wall. It was during the presidential campaign that Trump first began to call NAFTA a horrible deal for America and pledged to withdraw if a new deal couldn’t be done. Trump indicated last month that he could be flexible with a deadline on completing NAFTA negotiations right before he repeated his threat to withdraw from the pact if the three countries can’t reach a deal that’s more “fair” to America.

Immigration Debate in Congress Still Struggling

The Senate’s immigration debate ended on Thursday with no deal. Neither a bipartisan plan nor President Trump’s proposal had the required number of votes to pass. Every proposal considered couldn’t reach the 60-vote threshold. That leaves the undocumented immigrants in the Deferred Action for Childhood Arrivals program in limbo and lawmakers unsure of what’s next in the debate. In the other chamber, House immigration hardliners are getting more uneasy as they continue to push for a floor vote on Virginia Representative Bob Goodlatte’s proposal to reform the H-2A agricultural guestworker program. A Republican amendment aimed to enshrine the president’s four-part immigration framework, which would make cuts to legal immigration, was defeated by a wider margin of 36-60.House Freedom Caucus Chair Mark Meadows is calling for new leadership in the House Republican Conference. He’s also repeatedly criticized Speaker of the House Paul Ryan for not scheduling a floor vote. Politico says even if the bill got the 218 votes it needs to pass through the House, it’s unlikely to pass in the Senate.

Legislation Designed to Save Pollinators Introduced in House

Representatives Earl Blumenauer of Oregon and Jim McGovern of Massachusetts introduced the Saving America’s Pollinators Act. The legislation is designed to protect the health of honey bees and other critical pollinators. Estimates are that the U.S. lost one-third of honeybee colonies between 2016 and 2017, with similar losses occurring in previous years. To help bring a halt to the trend, the legislation suspends the use of bee-toxic insecticides (neonicotinoids), which have been linked to the declining population of pollinators. It also would require the Environmental Protection Agency to do a thorough evaluation to make sure using these insecticides is not adversely affecting pollinator populations. Blumenauer says, “A healthy food system depends on healthy pollinators. To keep the status quo is like flying blind. We shouldn’t be using these insecticides when we don’t know for sure how they’re affecting pollinators. The EPA has a responsibility to get to the bottom of this in order to protect our pollinators.” McGovern says that protecting pollinators is essential to the sustainability of our nation’s food supply. Studies estimate that one of every three bites of food Americans eat is from a crop pollinated by bees.

MN Students Want GMO Approval Process Streamlined

A group of graduate students at the University of Minnesota is asking Congress to streamline the approval process for GMO crops that produce food and fiber. A DTN article says the seven students are doing graduate work at the Minnesota College of Food, Agriculture, and Natural Resource Sciences. They believe the regulatory hoops that companies need to jump through to commercialize new traits are slowing down innovation. In a letter to U.S. representatives, the students pointed out that it costs companies between $20 million and $30 million to get a new GMO crop from start to finish through the regulatory process. That’s a price tag that limits smaller companies from making inroads into the marketplace. The students say, “Each of us has numerous ideas about genetic modification that could be developed into startup companies and bring more competition in a marketplace that’s dominated by a few mega-companies that can afford the regulatory process.” The letter asks Congress to pass a bipartisan bill that funnels GMO fuel and fiber crops through either the USDA or the EPA, but not both