Updated U.S. Grains Standards Act Policy Priorities

In response to the current effort in the U.S. Congress to renew the U.S. Grains Standards Act (USGSA) in 2019, NAEGA and National Grain & Feed Association (NGFA) committees have prepared an updated list of priorities for a USGSA renewal:

1. Prohibit the Misuse of U.S. Grain Standards Act (USGSA) Quality Factors for Inappropriate and Misleading Purposes: The purpose of the USGSA is to establish official marketing standards for the covered commodities. The precedence and practice of using grain standards quality factors as an indicator of plant health for other sanitary and phytosanitary standards is inappropriate and misleading and should be expressly prohibited.

• Change the Length of USGSA Reauthorization to More than 5 Years but No Longer than 10 Years: Considering the recent successful reorganization and relocation of  the Federal Grain Inspection Service (FGIS) into USDA’s Agricultural Marketing Service, where it previously had resided, as well as the continued improvement of FGIS operations in providing accurate, reliable, timely and more predictable service, NGFA and NAEGA propose that the reauthorization period be moved to a time period of more than 5 years but no longer than 10 years.

• Review of the Current Geographical Boundaries for Officially Designated Agencies in Domestic Markets: To determine if the current number of grain handling facilities in operation, the volume of grain and oilseeds being handled and processed, and the volume of official services and testing being provided are adequate, FGIS should review the current geographic boundaries for each officially designated agency.

• Reporting of USGSA Request for Waivers, Exceptions and Specific Services: FGIS needs to maintain transparency with stakeholders by reporting both requests for waivers and exceptions and specific services and the actions taken subsequently to address both while still preserving confidential business information.

• Reauthorize the USDA Grain Inspection Advisory Committee: The Advisory Committee is designed to provide advice to the Administrator on the implementation of the USGSA. NGFA and NAEGA continue to believe the Advisory Committee serves a useful function by providing expert advice and assistance to FGIS in fulfilling its core mission of ensuring that official inspections are performed in a reliable, consistent and uninterrupted manner to facilitate the export of U.S. grains and oilseeds to global customers.

• FGIS User Fees Should Be Directed Solely to Official Inspection and Weighing Services:  Approximately, seventy percent of FGIS’s budget is based on user fees while the remaining thirty percent is covered through appropriated funds. The industry is concerned that assessing additional user fees to finance activities like compliance/enforcement would increase costs of exporting grain, making U.S. exports less competitive in foreign markets.

• Require Delegated States to Notify Users of Official Inspection or Weighing Services at Least 72 Hours in Advance of Any Intent to Discontinue Service: This important information is needed to enable affected export port locations and their customers to make alternative arrangements to preserve the uninterrupted flow of U.S. exports, preserve the U.S. reputation as a reliable supplier, address logistical problems and potentially lessen the economic harm to U.S. agricultural producers that has resulted from previous official service disruptions.

More information on these priorities can be found here.

NAEGA-NGFA Alternate Security Program

In response to guidance from the U.S. Coast Guard (USCG), NAEGA and NGFA are in the process of updating the NAEGA-NGFA Alternate Security Program (ASP) to incorporate new rules for seafarer access.  The seafarer’s access rule requires owners or operators of a maritime facility regulated by Maritime Transportation Safety Act (MTSA) to implement a system providing seafarers, pilots and representatives of seafarers’ welfare and labor organizations with access between vessels moored at the facility and the facility gate in a timely manner and at no cost to the seafarer or other individuals. The rule was approved on April 1, 2019 and the seafarers access system must be documented in a facility’s Facility Security Plan (FSP) by February 1, 2020 and implementation must begin by June 1, 2020.  The updated NAEGA-NGFA ASP will also include new rules on cybersecurity.

The ASP is an alternative way to comply with MTSA regulations that allows participating organizations to develop alternative security plans approved by USCG. All NAEGA members and their facilities are invited to participate in the NAEGA-NGFA ASP. If you are interested in joining the ASP, please contact Patrick.

Austrian Parliament Votes to Ban Glyphosate

On July 2, 2019, Austrian lawmakers voted to ban glyphosate, the first EU country to outlaw the herbicide. The bill would come into law in 2020.

Under EU laws the chemical is licensed for use until 2022, which means that a national ban may be illegal. A report commissioned by Austria's Ministry for Sustainability and Tourism concluded that Austria’s legislation did not conform to EU law. Additionally, Austria is a small market for glyphosate. However, larger European countries, including France and Germany, have proposed phasing out use of glyphosate over the next several years, and many observers believe an EU-wide renewal of the herbicide will be difficult in 2022.

Opposition to the chemical has grown since a 2015 decision by the International Agency for Research on Cancer, a World Health Organization unit, classified it as “likely having the potential to cause cancer in humans.” Regulators around the world, including the U.S. Environmental Protection Agency and the European Chemicals Agency, have declared glyphosate to be safe and not carcinogenic.

USTR Releases Supplemental EU Tariff List

The United States Trade Representative (USTR) last week released a supplementary list of products from the European Union that it is considering applying new duties to in retaliation for the EU’s continued subsidization of Airbus.  The new list of 89 tariff lines is in addition to an initial list published in April. Additional ad valorem duties of up to 100% could be added should the USTR decide to proceed with action. A final list will be drawn up from the two lists already published and will take into account the report of the World Trade Organization Arbitrator, due out before the end of this year, to determine the appropriate measure of countermeasures to be employed. The USTR has previously estimated the damage done to the US economy by Airbus subsidies at around $11 billion per year. USTR said it would hold a hearing on the proposed additional products on August 5^th, 2019.

OECD-FAO 10-Year Agricultural Outlook

On July 6, 2019, the Organization for Economic Cooperation and Development (OECD) and the UN’s Food and Agriculture Organization (FAO) released a 10-year agriculture outlook. The OECD-FAO Agricultural Outlook provides a consensus assessment of the 10-year prospects for agricultural and fish commodity markets at national, regional and global levels. The report noted that global demand for agricultural products is projected to grow by 15 percent over the coming decade, while agricultural productivity growth is expected to increase slightly faster, causing inflation-adjusted prices of the major agricultural commodities to remain at or below their current levels.

Globally OECD and FAO project that the use of grains for food will grow by about 150 million tons over the outlook period, a 13 percent increase, with rice and wheat accounting for the bulk of the expansion. The most significant factor behind the projected increase is population growth, which is expected to rise fastest in Sub-Saharan Africa and South Asia.

New uncertainties are reported as emerging risks facing agriculture. These include disruptions from trade tensions, the spread of crop and animal diseases, growing resistance to antimicrobial substances, regulatory responses to new plant-breeding techniques, and increasingly extreme climatic events.

More information on the report is available here.

EU-Vietnam Free Trade Agreement

On June 30, 2019, the European Commission and the Government of the Socialist Republic of Vietnam signed the Free Trade Agreement and Investment Protection Agreement between the EU and Vietnam. The agreements are based on the joint commitment of the two sides to open, fair, and rules-based trade liberalization and economic integration. Negotiations lasted from 2012 to December 2015. Doubts over the correct ratification procedure have delayed progress, but the European Commission now hopes that it can be ratified in 2019.

U.S. Office of Foreign Asset Control Releases Updated SDN List

On July 9, 2019, the U.S. Treasury’s Office of Foreign Asset Control (OFAC) publishes n updated list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country specific. These individuals and companies are called Specially Designated Nationals (SDNs) Their assets are blocked and U.S. persons are generally prohibited from dealing with them. More information and the updated list can be found through this link.

2018 Foreign Direct Investment Report

On July 2, 2019, the U.S. Bureau of Economic Analysis released the “New Foreign Direct Investment in the United States, 2018” report. The report showed foreign direct investment (FDI) in 2018 totaled $296.4 billion. Expenditures by foreign direct investors were up 8.7 percent from $272.8 billion in 2018 but were below the annual average of $338.1 billion for 2014-2017. Acquisitions of existing businesses accounted for a large majority of total expenditures. The manufacturing sector received the largest amount of new foreign direct investment at nearly $200 million.