The United States and Mexico signed an agreement resolving the cross-border, long-haul trucking dispute that has been going on for 16 years. As a result of the agreement, Mexico will suspend 50% of the tariffs applied to the 99 U.S. products subject to the current retaliatory measures. The other 50% of the tariffs will be suspended as soon as the first Mexican carrier is granted operating authority in the United States. The agreement will allow for carriers originating in Mexico and the United States to operate permanently in both countries after enrolling in a new program and complying with all of the safety procedures of each country. According to the administration, this dispute has cost U.S. businesses more than $2 billion and farm exports to Mexico of affected commodities were reduced by 27%. Secretary of Agriculture Tom Vilsack said, “We have an agreement that not only will ultimately eliminate punitive tariffs, but it also provides opportunities to increase U.S. exports to Mexico and helps to expand jobs on both sides of the border.”

Ethanol Compromise Announced in Senate – Senators John Thune (R-SD) and Amy Klobuchar (D-MN) announced that they have reached an ethanol agreement with Senator Dianne Feinstein (D-CA). The agreement would end the existing 45-cent per gallon blender’s tax credit and the 54-cent per gallon tariff on imported ethanol on July 31, 2011. It also extends the existing alternative fuel station tax credit to include blender pumps and extends the credit through 2014. It is estimated that ending the blender’s tax credit and the tariff early, which currently expires on Dec. 31, there would be a savings of nearly $2 billion of which $1.33 billion would go to reduce the federal deficit and $668 million in new technologies. With this announcement, the division between the livestock and poultry industries and the ethanol industry continues. A coalition of livestock and poultry organizations said, “The resulting compromise still provides new federal funds for corn-based ethanol, money that would be better spent reducing the deficit or encouraging the development of energy sources that do not compete with feed needs.” Growth Energy, an ethanol trade association, stated, “This proposal will benefit consumers at the pump, reduce our dependence on foreign oil by investing in next generation biofuels, and make a significant contribution to reducing our nation’s budget deficit.” The Senators have asked the White House and the Senate leadership to include their agreement in the deficit reduction package that will be considered when raising the debit ceiling.

Small Business and the GIPSA Rule – The House Small Business Subcommittee on Agriculture, Energy and Trade held a hearing on the effects of the proposed Grain Inspection and Packers and Stockyards Administration (GIPSA) rule on small producers and businesses. Congressman Scott Tipton (R-CO), chairman of the subcommittee said, “Saddling small farms and small businesses with more government regulations will only prolong our economic downturn and crush more jobs. In fact, if the GIPSA proposed rule is adopted, it has the potential to reduce gross domestic product by over $1.5 billion and cost the U.S. economy nearly 23,000 jobs.” Earlier this summer, Congressman Tipton and committee Chairman Sam Graves (R-MO) sent Secretary of Agriculture Tom Vilsack a letter asking the agency to fully comply with the Regulatory Flexibility Act (RFA) and ensure that USDA understands the private-sector costs of the regulations on all sectors of the livestock and poultry industries. Tipton reminded USDA of this by saying, “More troubling are the inadequacies in the USDA’s Initial Regulatory Flexibility Analysis (IRFA) and their failure to take into account the economic impact on small businesses.”

Russian Sanitary Requirements – In a letter to the Russian Ambassador to the United States, eighty-three congressmen said they are hoping that Russia revises its current sanitary and phytosanitary (SPS) requirements and comply with its future obligations as a World Trade Organization (WTO) member. The members indicated that Russia’s SPS requirements are “inconsistent with the core provisions of the WTO SPS agreement” and are used to restrict imports of U.S. agricultural products. A similar letter was sent to the administration by Senators Ben Nelson (D-NE), Chuck Grassley (R-IA) and others.

Farm Bill Field Hearing – The Senate Agriculture Committee will hold its second field hearing on Aug. 25 to discuss reauthorization of the farm bill. In announcing the hearing, Senator Pat Roberts (R-KS), ranking member, said it was important to gain the insight from Kansas producers. “Their perspectives on current agriculture programs and the direction of this next farm bill are critical to the committee’s work in drafting policies that provide producers and rural America with tools necessary for success.” The hearing will be held at Hilton Wichita Airport, Wichita, KS.

P. Scott Shearer
Vice President
Bockorny Group
Washington, D.C.