IATP's Shefali Sharma is reporting from the 9th WTO Ministerial in Bali, Indonesia.
2 p.m., Bali, Indonesia
It is supposed to be the final hours of the 9th WTO Ministerial here in Bali but trade negotiators are milling in the hallways, conjecturing whether the meeting will be extended until tomorrow or wrap up by 5:00 p.m., whether there will be a “take it or leave it text” or further negotiations late into the night. There have been several contentious issues, including whether to finalize yet another trade agreement on trade facilitation and a non-committal package for the Least Developed Countries (LDC). However, the issue most critical to poor countries concerns food security. The current WTO framework on agriculture is being tested on its ability to accommodate government procurement for food security programs in developing countries.
India has been in the spotlight the last three days since the meeting began because it has stood firmly against the U.S. opposition to allow such programs from violating existing WTO rules. The existing rules were unfairly crafted in the mid-80s by the U.S. and the EU, but never mind that. The U.S. is insisting that India’s Food Security Act would exceed limits set in the agriculture agreement for “trade distorting” subsidies. Never mind too that the U.S. has negotiated space at the WTO to reconfigure its own domestic agriculture and food security programs.
This blog was originally published November 26, 2013 in an alternate version by the Post Globalization Initiative.
Following the global financial industry default cascade of 2008-09, the Group of 20 (G-20) industrialized countries established the Financial Stability Board (FSB) in 2009, to coordinate policies among FSB members to prevent another global financial crisis. The most recent FSB Plenary took place on November 7–8 in Moscow.
Because the economic consequences of the financial collapse, following more than a decade of deregulation and non-regulation of the industry, have been so severe and widespread, the expectations of the FSB to reform the broken global financial system are high. Frustration with the slow and halting pace of reform extends even to the head of the New York Federal Reserve Bank, who commented in a November 7 speech that some of the world’s Too Big To Fail banks appear to lack respect for regulation and even the rule of law.
A Spanish version of this commentary originally appeared in La Jornada.
One of the clearest stories from the NAFTA experience has been the devastation wreaked on the Mexican countryside by dramatic increases in imports of cheap U.S. corn. But while Mexican farmers, especially small-scale farmers, undoubtedly lost from the deal, that doesn’t mean that U.S. farmers have won. Prices for agricultural goods have been on a roller coaster of extreme price volatility caused by unfair agriculture policies, recklessly unregulated speculation on commodity markets, and increasing droughts and other climate chaos. Each time prices took their terrifying ride back down, more small- and medium-scale farmers were forced into bankruptcy while concentration of land ownership, and agricultural production, grew.
It’s hard to separate the impacts of NAFTA from another big change in U.S. farm policy: the 1996 Farm Bill, which set in place a shift from supply management and regulated markets to an accelerated policy of “get big or get out.” Farmers were encouraged to increase production with the promise of expanded export markets—including to Mexico. But almost immediately, the failure of this policy was evident as commodity prices dropped like a stone, and Congress turned to “emergency” payments, later codified as direct payment farm subsidies, to clean up the mess and keep rural economies afloat.
Then, as new demand for biofuels increased the demand for corn, and investors turned from failing mortgage markets to speculate on grains, energy and other commodities, prices soared. It wasn’t only the prices of farm goods that rose, however, but also prices of land, fuel, fertilizers and other petrochemical based agrochemicals. Net farm incomes were much more erratic.
To truly see the power of agribusiness, and its growing disconnect from regular people and farmers, look no further than the current dust-up over Country of Origin Labeling (COOL). Polls say more than 90 percent of consumers want simple labeling indicating what country the meat they are buying comes from. Farm groups like the National Farmers Union and the U.S. Cattlemen’s Association support it because of the marketing advantage it gives to U.S. produced meat and livestock producers. Yet, agribusiness has repeatedly flexed its lobbying muscles to block COOL and now they are at it again as Congress negotiates a new Farm Bill. Why do companies like Cargill, JBS and Tyson care so much about COOL? Remarkably, these enormously profitable global corporations are frightened that if consumers better understood their business model—which pays no attention to what country animals come from—they might have to make some changes.
On October 29, big meat (Cargill, Smithfield, Tyson, JBS, among others) sent a letter (subscription required) to the House and Senate Agriculture Chairs demanding that the Farm Bill “reform” COOL. Soon thereafter, House Agriculture Chair Frank Lucus (R-OK) parroted big meat’s arguments in announcing he wants to repeal COOL to avoid retaliation from trade partners. Senate Agriculture Committee Chairwoman Debbie Stabenow has admitted that COOL is on the agenda for the Farm Bill conference committee.
During the more than three years since Congress passed the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act, financial regulators have struggled to draft, approve and implement the rules authorized by Dodd-Frank. No agency has met greater Congressional, Wall Street and corporate resistance to Dodd-Frank rulemaking than the Commodity Futures Trading Commission (CFTC), which has authority over more than 90 percent of the $300 trillion U.S. derivatives market. Derivatives are financial contracts, whose value is derived from the value of an underlying asset, such as wheat, oil or a mortgage interest rate. No single CFTC proposed rule has generated more comments—more than 23,000 and counting—than a rule that would limit financial firm market share of agricultural, energy and metals derivatives.
On November 5, the CFTC approved a nearly 400-page revised position limits rule and consequently withdrew an appeal to defend its original rule at the Washington D.C. Court of Appeals. (For an explanation of the October 2012 district court ruling that gave rise to the appeal, see IATP’s blog.) Position limits attempt to prevent excessive speculation and market manipulation by regulating the market share percentage that any one trader and its affiliates can control of a designated commodity contract. The CFTC also approved a rule on the data aggregation of positions across borders, to prevent regulatory evasion by trading through foreign affiliates. And so begins Round 2 of the position limits fight.
Submit a comment by Friday, November 15 to tell the FDA why their proposed food safety rules don't work for small- and medium-scale food producers.
Access to safe food is something that many of us take for granted. It is assumed that the jam we pick up from the farmers market or the chicken purchased from the grocery store will have been grown and processed in a way that will nourish, not harm, our health or the health of our family. Behind these and all food purchases is a long line of farmers and processors with the responsibility to ensure that we can be afforded this assumption of safety.
The rise of the industrialized food system has deteriorated this trust through increasingly common breaches. Just In the past two months, outbreaks of Salmonella in industrialized chicken production and E. coli in the prepared food products of national retailers have, once again, made consumers suspicious of the food on their shelves. Too often, these outbreaks are the result of the scale and cost-cutting priorities of the industrial food system, making public health the collateral damage of an unsustainable food systems.
IATP is a member of the Transatlantic Consumer Dialogue (TACD), a U.S.-European network of about 80 nongovernmental organizations, founded in 1999 on the premise that public policy will be improved by a frank discussion of policy documents disclosed to NGOs, just as they are to corporate lobbyists. TACD meets with U.S. and European Union officials yearly, alternating between Washington, D.C. and Brussels, Belgium, to discuss TACD resolutions. This year’s annual meeting focused on regulatory issues in the Transatlantic Trade and Investment Partnership (TTIP) negotiations between the U.S. and the European Union, formally launched in June.
U.S. and EU TTIP negotiators were to have met last week in Brussels, but the meeting was postponed due to Edward Snowden’s revelations of U.S. electronic surveillance of European officials, including European Heads of State. The U.S. government usually sends just a couple of officials to TACD meetings in Brussels, but this year, faced with the possible derailment of TTIP negotiations due to U.S. spying, they sent a full contingent to repair the public image damage, though not to apologize. TACD was an indirect beneficiary of Snowden’s act of transparency, i.e., making the secret public.
After being delayed by the U.S. government shutdown, talks for a Transatlantic Trade and Investment Partnership (TTIP) are quietly gearing up again. Tariff barriers between the U.S. and EU are already low, so these negotiations are focused squarely on achieving “regulatory coherence.” In other words, industry lobby groups and their political allies on both sides of the Atlantic see the trade deal as an opportunity to get rid of rules and regulations that limit their ability to buy and sell goods and services. The outcome of TTIP has implications for the rest of the world. Leaders from both regions have made clear, the terms of this trade agreement will set the standard for future free trade agreements.
TTIP could affect a broad range of issues, from energy to the environment, and intellectual property rights to labor rights. It could also have a significant impact on the evolution of agricultural markets and food systems in the U.S. and EU, as well as solidify the ability of corporations and investors to challenge new regulations that could affect expected profits through international tribunals. Unfortunately, little concrete information is known about the content of the TTIP proposals, since the governments involved have refused to publish draft text.
In both the U.S. and EU, the time to influence the substance of the agreement is before it is completed. That’s a tricky task, since the negotiations are happening behind closed doors, but it means that civil society groups and legislators need to pay close attention to what is on the agenda, even without complete information.
This piece was produced by IATP intern John Parker for IATP's Beyond the Farm Bill.
When it comes to faith in our democracy, this year has raised some eyebrows. In the case of food and agriculture policy, a disturbing fact emerges: Our democracy is increasingly a façade.
Agribusinesses have been subverting the democratic process from Washington D.C. to state legislatures across the country to ensure that people know less and less about how their food is produced and distributed. Moreover, they have engaged in a determined effort to obstruct opportunities for citizens and legislators to engage in the democratic process. Consider the following to illustrate the point.
IATP's new Director of Agriculture Policy, Dr. M. Jahi Chappell, has published a review of The Localization Reader, an overview and primer on "the coming downshift," the need and potential for local food systems in the October 2013 edition of Landscape Ecology. Raymond De Young and Thomas Princen, both professors of natural resources at the University of Michigan, compiled The Localization Reader's 26 pieces--a mix of old and new writings, including an introduction and concluding chapter by De Young and Prince themselves.
According to Dr. Chappell's review, "Landscape ecologists looking for inspiration, philosophical rumination on the local, or a glimpse of the historical evolution of its underlying ideas will find much to enjoy."
You can read the review on Jahi’s personal webpage.