Outlaw, Joe L.

English

Research Papers in Economics

CHOICES
The magazine of food, farm, and resource issues
2nd Quarter 2005 • 20(2) CHOICES 93
A publication of the
American Agricultural
Economics Association
2nd Quarter 2005 • 20(2)
©1999–2005 CHOICES. All rights reserved. Articles may be reproduced or electronically distributed as long as attribution to Choices and the American
Agricultural Economics Association is maintained. Choices subscriptions are free and can be obtained through http://www.choicesmagazine.org.
Washington Scene
Coordinated by Joe L. Outlaw, Co-editor, Choices
Early summer in Washington, DC is normally one of the
busiest times of the year, as Congress tries to move legisla-
tion along before their summer break. This year is no ex-
ception. There are a number of important issues working
their way through Congress that could affect the US agri-
cultural sector. 
Both the House and Senate have passed agricultural
appropriations bills. As usual, there are notable differences
that will have to be addressed in conference committee.
One of these differences is the House provision that would
delay mandatory country-of-origin labeling (COOL) for a
year. The Senate bill does not have similar language. There
is also a significant difference in a $300 million item for
food aid involving USAID.
Congress is again trying to pass an energy bill. Recall
that energy bill legislation was one of the initial requests
President Bush made to Congress after he was elected.
Each of the past few years, Congress failed to pass an ener-
gy bill for various reasons. Two of the most controversial
bills were related to drilling in the Arctic National Wildlife
Refuge (ANWR) and liability protection for US oil inter-
ests from litigation over groundwater contamination from
the oxygenate MTBE; these remain issues. The size of the
renewable fuels standard is also an issue. Currently, the re-
newable fuels standard requires refiners to use a minimum
of two billion gallons of renewable fuels. The Senate bill
raises the standard to eight billion gallons by 2012, and
the House version increases the standard to five billion gal-
lons. The House of Representatives passed its version of
the energy bill in April and is waiting to conference with
the Senate.
Attempts to reopen Japan’s borders to US beef were
making slow progress, but the recent discovery of a second
BSE-positive animal will likely halt progress for some
time.
Agriculture Secretary Mike Johanns Announces 
2007 Farm Bill Forums
Beginning with the first Farm Bill Forum in Nashville,
TN held July 7, 2005, Johanns and other senior USDA of-
ficials will participate in Farm Bill Forums to be held
across the country in 2005. Dates, locations, and times of
the forums will be available on the USDA website at http:/
/www.usda.gov/farmbill. The public will be invited to at-
tend the forums and to provide oral comments. As the
current farm bill covers a diverse array of program areas,
six topics have been identified to provide a framework for
the forums. The primary topics addressed at the forums
will reflect various concerns affecting rural America, such
as commodity, conservation, and rural economic develop-
ment issues. In addition, some forums will be dedicated to
other important programs authorized by the farm bill,
such as food assistance, research, and education programs.
Two important agricultural trade issues are currently
being debated in Washington. First is the proposed vote to
pass (or reject) the US–Central American–Dominican Re-
public Free Trade Agreement (CAFTA–DR) in Congress.
Second is the June 9, 2005, decision by a NAFTA panel to
remand the US International Trade Commission’s October
2003 determination to impose 14.15% antidumping and
countervailing duties on certain US imports of Canadian
hard red spring (HRS) wheat.
CAFTA-DR
The Senate Finance and House Ways and Means Com-
mittees approved draft implementing legislation for the
CAFTA-DR FTA on June 14 and June 15, 2005, respec-
tively, in informal nonbinding markup sessions. The Sen-
ate Finance Committee voted the CAFTA-DR out of
committee with one amendment—a proposal to extend
Trade Adjustment Assistance to service-sector workers
whose jobs would be affected by the agreement. In the
House, an amendment was passed that requires the ad-
ministration to report on labor capacity building and di-94 CHOICES 2nd Quarter 2005 • 20(2)
rects the president to report, after one
year, the effect of the agreement on
the services industry. The commit-
tees’ approval of the draft legislation
opens the way for the president to
submit the FTA for final congres-
sional approval. Once submitted,
lawmakers will have 90 legislative
days to either pass or defeat the
agreement on an up-or-down vote
procedure. Although it covers all in-
dustrial and agricultural products,
CAFTA-DR supporters contend that
the agreement will enhance US ex-
ports of manufactures and agricultur-
al commodities, such as grains, cot-
ton, soybeans, and poultry (Tanner,
2005). The agreement’s opponents
fear erosion of the US manufacturing
base in textiles (Graham, 2005); sug-
ar producers are concerned about the
impact of increased in-quota access
for CAFTA-DR sugar under the
TRQ. The US International Trade
Commission (USITC) prepared a re-
port (US–Central America–Domini-
can Republic Free Trade Agreement:
Potential Economy-wide and Selected
Sectoral Effects), as required by US
trade law, for consideration of the
impacts of the agreement.
NAFTA Panel Remand on Wheat
There are currently 14.15% US an-
tidumping and countervailing duties
imposed on certain US imports of
Canadian hard red spring wheat. On
October 3, 2003, the USITC deter-
mined that such imports were injur-
ing US farmers; on November 24,
2003, the Canadian Wheat Board
filed a request for a NAFTA panel re-
view of the USITC’s determination
of injury of such hard red spring
wheat imports; and on June 9, the
NAFTA panel remanded the USITC
injury determination (Elliot, 2005).
The panel granted the US govern-
ment 90 days until September 6,
2005, to justify its injury decision
and requested that the government
answer nine questions and come up
with a new determination.
For More Information
Elliot, I. (2005). U.S. ordered to 
review injury in wheat case. Feed-
stuffs, 77(25). Available on the 
World Wide Web:  http://
www.feedstuffs.com.
Futures and Commodity Market 
News. (2005). CWB calls NAFTA 
wheat decision a “decisive victory.” 
Available on the World Wide 
Web: http://news.trading-
charts.com/futures/0/5/
67214750.html.
Graham, Senator Lindsay. (2005). 
Letter to Governor John Engler, 
President, National Association 
of Manufacturers. World Trade 
Online.
North Dakota Wheat Commission. 
(2005). Canada’s wheat subsidies 
to receive another look. Bismarck, 
ND: NDWC. Available on the 
World Wide Web: http://
www.ndwheat.com/in/news/
news_detail.asp?ID=288.
Tanner, Congressman John. (2005). 
CAFTA vital for national secu-
rity, Tennessee farmers. World 
Trade Online.
United States House Committee on 
Ways and Means. (2005, June 
15). Committee approves draft 
DR-CAFTA legislation (press 
release). Washington, DC: US 
House of Representatives. Avail-
able on the World Wide Web: 
http://waysandmeans.house.gov/
News.asp?Form-
Mode=release&ID=316.
Thanks to Cathy L. Jabara and
Ronald A. Babula, US International
Trade Commission, Tamara Wag-
ester, C-Fare, and Annette Clauson,
USDA ERS, for their contributions
to this piece.

Washington Scene

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