Opinion: End of year priorities clear the way to focus on trade in 2016

By Guest Author

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By: Philip Ellis, NCBA President

Cattlemen and women can rest a little easier as they move into the New Year knowing several policy victories were contained in the Omnibus Appropriations bill. For NCBA, top among these was Country of Origin Labeling. Cattle producers have long known that consumers were unaware COOL labeling existed, and it had no discernable impact on the price or demand for U.S. beef. However, the largest issue remained the threat of retaliatory tariffs and the long term damage that violating our trade agreements would have had on future trade negotiations. While NCBA continued to urge action to avoid these outcomes, unfortunately it took within hours of implementation of tariffs for Congress to act.

While COOL certainly captured the headlines, the Omnibus contained many more priorities for cattle producers including language to continue congressional oversight of the dietary guidelines process. With passage, Congress made it clear that the current and future Dietary Guidelines will be based on scientific agreement and limited to nutrition and dietary information. The bill also increases scrutiny on beef imports from regions with known animal disease issues, funds wildfire reserves, continues prohibitions on environmental permitting and reporting and blocks the Department of Interior from designating de facto wilderness areas. 

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Just as timely, Congress also passed tax extenders legislation, which always seem to fall to the last minute, forcing producers to either make decisions during the year speculating on the tax ramifications or push major decisions to the last days of the year in order to take advantage of these provisions. While that is again the case this tax year, the good news is Section 179 was made permanent at $500,000, 50 percent bonus depreciation was extended through 2019 and the Conservation Easement Tax Credit was permanently extended. This was remarkable news for NCBA, as we've been working on certainty in the tax code for a number of years, and without the appetite by Congress to take up full tax reform, it subjected many of these critical provisions to short term extensions. Now with permanent and multi-year extensions, producers will be able to plan with their financial advisor to grow and expand their operations.

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This end to 2015 puts the cattle industry in a great place to set our sights on expanded trade and access to Asia and the Pacific Rim in 2016. While the priorities for the industry will be set by our producer leadership in San Diego, Calif., we know that passage of the Trans-Pacific Partnership will be a major focus for the year ahead. The cattle industry has already lost over $100 million in trade into Japan, thanks to a preferential trade agreement between Japan and Australia. That gap will continue to grow as the Japan-Australia Economic Partnership Agreement continues to ratchet down Japan's tariff on imported beef. The good news is the Trans-Pacific Partnership, negotiated by the U.S. Trade Representative, would reduce Japan's tariffs on imported beef below Australia's preferential agreement upon passage. That would instantly level the playing field, and allow U.S. producers to seize and build on our lost market share. The cattle industry cannot afford to push passage of TPP back, every day without an agreement costs us market share in the Pacific. With over $7 billion in U.S. beef exports in 2014, exports help stabilize our markets, allow our producers to fetch a premium for muscle cuts internationally, and add value to variety meats that otherwise would sell for little to nothing domestically. Trade represented $350 in value per head in 2014, and it represents the future of the profitability of the beef industry. I hope you'll visit our website at www.TPPNow.com to see more benefits to the cattle industry from trade and learn how this agreement will impact your bottom line.

We were pleased to see so many priority issues the Omnibus. While this wasn't an ag bill, it addressed the industry's top concerns and will allow the NCBA to focus on passage of the TPP in 2016. I look forward to seeing many of you at the Cattle Industry Convention and NCBA Trade Show in San Diego, Calif., Jan 27-29. For more information and to register, visit www.BeefUSA.org, or call (303)-694-0305. And from my family to yours, we wish you a merry Christmas and a Happy New Year.

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