DENVER - With an uncooperative Republican Congress confounding quick action, President Trump's ambitions to reshape trade policy, cut taxes, reform health care and trim the bureaucracy may not unfold exactly as planned, John Keeling says.
Keeling, executive vice president and CEO of the National Potato Council, spoke March 15 at the annual meeting of Potatoes USA about the political climate in Washington, D.C.
"Washington still doesn't get along, and they still don't like each other," Keeling said. "They don't know to find the middle and get things done on either side of the aisle and in either house."
Republicans have a 20-vote margin in the House and only two votes to spare in the Senate, he said.
"It is very, very difficult to get things done as we have already seen with the attempted repeal of the Affordable Care Act," Keeling said. It will be difficult to pass tax reform and other significant legislation, he said.
Keeling said Trump's campaign promises to dismantle or renegotiate the North American Free Trade Agreement will likely moderate with opposition from agricultural interests.
Trump's vision on trade may be "aspirational" but may end up of short of his rhetoric, he said.
"If NAFTA goes away, we face a 20% tariff on our processed product going into Mexico, and we likely will face a 70% tariff on our fresh product going into Mexico," he said.
Those kind of tariffs could cut frozen potato exports to Mexico by 50% to 60%, as U.S. suppliers would lose out to Canada and other countries.
"So NAFTA going away is not an option or is something that is not likely to happen," Keeling said.
There is already a change in rhetoric about NAFTA, he said, with Trump indicating he will sit down with leaders Mexico and Canada to discuss how the agreement could be updated.
We are already starting to see more diplomatic efforts to work with Mexico on some issues," he said.Keeling said it is unlikely that the Trans Pacific Partnership, which Trump pulled the plug on, gets put back together. "I think it is much more likely that we will do bilateral negotiations," he said. That won't necessarily be a bad thing, Keeling said, but Congress may not be able to act very swiftly on several trade agreements.
"The problem with that will be the difficulty of getting trade agreements through Congress," he said. "When you did a multilateral agreement, you had 10 countries wrapped up in one agreement and Congress only has to bite the bullet one time," he said. If you have ten separate agreements, then those ten times agreements would have to be approved by Congress.
"It is unlikely that we will be able to have as many trade agreement as we would have had under a multilateral agreement, but maybe they will be better," he said. A priority for the industry, Keeling said, will be making sure the Trump administration starts negotiations with countries that are important to the U.S. potato trade, he said.
The confirmation of Trump's pick for Agriculture Secretary- former Georgia governor Sonny Perdue -is at least 30 days out, Keeling said.
"We are getting to the point where not having somebody at the top is starting to be a drag on getting some things done," he said, mentioning the importance of dialogue with Mexico on trade issues such as potato market access.
President Trump has asked the Environmental Protection Agency to reevaluate the Waters of the U.S. regulation, which is positive for agriculture. However, Trump's vow to cut funding to EPA by 25% across the board could hurt the industry.
"EPA also has a pesticide program where they actually do the review and oversight of chemicals we all use in farms and ranches," he said. "If you go across the board and cut the pesticide program by 25%, you are going to take a program that already doesn't work well and slow it down even more," he said. The ability of chemical company registrants to get products approved for use on farms could go down dramatically, he said. It is important that funding is maintained for areas of EPA that are important to industry, he said.
Keeling said farm bill funding will be a challenge, with President Trump expected to ask the USDA to cut its budget so defense spending can increase.
At the same time, commodity prices have been low, so the farm economy is in tough shape, he said.
Still, Keeling said the potato industry will seek to protect funding for its priorities, including research and pest control issues.
"I think we will be able to get some things done," he said. "We will live through four years of anything."