Grassley speaks to National Pork Producers

Grassley-090507-18363- 0032By The Iowa Statesman


U.S. Sen. Chuck Grassley (R-IA) spoke with the National Pork Producers Council today. The following are his prepared remarks from that speech:

I am glad to be here with you, and I hope you had a good breakfast that included either ham or bacon to get your day started.  Thank you for inviting me here.  I think it is really important that you’re in Washington so you can explain how farming works to people in this town.          As a farmer myself I know how many challenges you all face.  Markets are more volatile these days, weather is always a challenge.  It seems the biggest challenge I hear at my town hall meetings across Iowa are the regulations the bureaucrats in this town are putting out.

One of the hottest topics in Washington right now is trade.  As you all know, U.S. agriculture is heavily dependent on exports and having access to foreign markets.  In 2014, American farmers exported $152 billion worth of agricultural products.  Obviously, trade and exports are very important.  The United States has been negotiating with eleven other countries in the Trans-Pacific Partnership or TPP for several years and we hope we’re close to a deal.  The TPP, upon the completion of negotiations, should offer new market opportunities for agriculture.

You may have read in the news over the last year or so that Japan has been slow to embrace full market access for five sensitive ag products.  One of those products is pork and I have been adamant with Trade Representative Froman that we get the Japanese to open their minds to how free trade agreements work.  When Japan joined the talks they indicated everything would be on the table.  However, they apparently forgot that commitment in regard to agriculture products.

The United States Congress has a role to play in trade agreements.  However, it is not feasible for 535 members of Congress to participate directly in negotiations with other countries.  To simplify things, Congress has in the past authorized presidents to negotiate with what is officially called Trade Promotion Authority or TPA.  You may also hear it called “fast track” by some.

The idea behind TPA is that Congress gives the president the power to negotiate trade agreements with foreign countries with a set of negotiating objectives.  When the Administration reaches an agreement with foreign governments it is then submitted to Congress for approval by a single up or down vote in each chamber without the opportunity for amendments.

The reason for this is very simple.  Foreign governments are not likely to agree to anything substantial with the President if they believe Congress will have the chance to amend. Therefore, Congress has traditionally passed TPA as a way to make negotiating free trade agreements less cumbersome for our country.  Regarding the transparency of these agreements, any administration that wants a trade deal they have negotiated to be approved in Congress is well advised to keep Congress updated along the way.

Senate Finance Committee Chairman Hatch is close to introducing his TPA bill.  Hopefully the Senate Finance Committee, which I am a member of, will mark up TPA soon, possibly by next week if things go smoothly.  After the Finance Committee the bill will have to proceed through both bodies of Congress like any other piece of legislation.

If Congress approves TPA, that will send a signal to the other countries involved in the TPP that the United States Congress is ready to vote on trade agreements.  History from the last several agreements that were passed indicates that once TPA is passed, the final and “toughest” issues of the Trans-Pacific Partnership will get resolved and negotiations will likely conclude.

Hopefully this will all fall into place in the coming months and Congress will pass another High Standard free trade agreement that opens up new market opportunities.  Additionally, the TPP should further synchronize Sanitary and Phyto-Sanitary regulations between all the countries involved.

The United States is also working on the Trans-Atlantic Trade and Investment Partnership or “T-TIP” with the European Union.  I have high hopes for that agreement as well, but admittedly, it will likely be another year or two before we are close to concluding that agreement.

Another trade issue that is being talked about is Country of Origin Labeling or COOL.  As you all know, COOL requires meat to be labeled in a specific way to help give consumers more information about where the meat they are purchasing comes from.  I supported COOL when it was originally passed as part of the 2002 Farm Bill.

Our neighbors in Canada and Mexico have challenged COOL at the World Trade Organization and won twice already, a final appeal is taking place as we speak.  Many think a final WTO decision could come as early as mid-May.

I maintain that COOL is important for U.S. consumers and I also believe we must respect the WTO process.  The WTO exists for a reason.  Sometimes I like what they decide, sometimes I do not, but they are an important organization for maintaining free flowing international trade.

If the U.S. loses again at the WTO, it is likely we will have to come up with a legislative fix for COOL.  Secretary Vilsack has been on record saying he cannot do any more to bring us into WTO compliance considering the way the law is written.

I’m not sure what Congress would agree to, but I do believe there are alternatives that can be considered.  I have heard from numerous groups that a North American label could be a path forward, but there is no need to speculate any further until the WTO makes a final ruling.

An issue many of you here today might be interested in is the rule that has been proposed by the EPA and the Army Corps of Engineers related to Waters of the United States that is commonly called WOTUS. Last week, the EPA and the Army Corps of Engineers sent their proposed rule to the White House for review.  That’s the last step before issuing a final rule.

EPA Administrator McCarthy said this final version includes many changes based on the comments they received.  She said they listened carefully.  She also said that critics of the proposed rule, and if there is any doubt, I am one, will be pleasantly surprised.  I hope she’s right.  But, I also hope she understands why those of us in agriculture are not in a trusting mood.  While the EPA was still accepting comments, the administrator was making dismissive statements about legitimate concerns from the agriculture community and telling farmers they were just misinformed.  That’s not the way to build trust.

We are not looking for more assurances from EPA that they don’t intend to target farming and other legitimate uses of private property.  We want to see a rule that clearly and specifically sets out the limits of the EPA’s power.  That means there would have to be major changes from the proposed rule.

I would indeed be pleasantly surprised, even shocked, if that is that case.  If it is not, Congress will very likely vote on a resolution of disapproval to strike down the rule under the Congressional Review Act.  If that is vetoed by the President, Congress could use its power of the purse to say that no funds can be used to implement the rule.  Given the widespread effect of this rule, even beyond agriculture, I don’t see Congress going quietly on this one.  This power grab by the EPA will not stand.

A final thing I hear a great deal about from farmers is making the enhanced section 179 expensing rules permanent instead of passing it at the last minute before the end of the year like we have been doing.  I agree that certainty in the tax code is good for business and important for making sound decisions about your operations.  The House has taken a step in that direction by passing a permanent extension. The Senate Finance Committee, of which I am a member, has primarily been focused on tax reform.  Five working groups have been established to examine different aspects of the code.  But I and many of my colleagues understand the importance of addressing section 179 and other extenders sooner rather than later should a deal on tax reform not be reached.

Those are a few of the highest profile things going on in Washington right now that I know will affect the pork industry.   I know there are more issues you all would probably like to hear about so I’m happy to take a few questions about anything else that is on your mind.  Thank you again for inviting me to speak to you this morning.