The controversial new trade deal, the Trans-Pacific Partnership, has been a tough sell for the Obama Administration. The top four Presidential candidates oppose its passage and support in Congress is waning. The road to TPP approval got a little tougher when 161 food, farm, faith and rural organizations sent a letter to Capitol Hill urging lawmakers to reject the deal.
“The main beneficiaries of the TPP are the companies that buy, process and ship raw agricultural commodities, not the farmers who face real risks from rising import competition. TPP imports will compete against U.S. farmers who are facing declining farm prices that are projected to stay low for years,” the organizations wrote.
At a time when the farm economy is struggling, the 12-nation TPP is being sold as a boost to farmers. But many farm groups are not buying it. “Trade deals do not just add new export markets—the flow of trade goes both ways—and the U.S. has committed to allowing significantly greater market access to imports under the TPP,” the groups explained.
An IATP paper earlier this month raised concerns about the impact of increased imports of milk and whey protein concentrates from the largest dairy exporting company in the world, based in the TPP country New Zealand. U.S. dairy farmers are already suffering under a climate of extremely low prices.
The EU is being asked to give up a lot in the Transatlantic Trade and Investment Partnership (TTIP), especially its relatively higher standards on food and chemical safety. It’s also asking for a lot in return, including the massive opening of U.S. public procurement to bids by EU firms. A new leaked memo from the European Commission shows just how much they want to open up those markets. It’s a bad tradeoff for both sides.
The March 29 European Commission non-paper addressed to its Trade Policy Committee titled “TTIP–Messages on public procurement” begins with the assertion that, “Public procurement is a key component of the TTIP negotiations and an area where almost all Member States have offensive interest, and in consequence the EU has been requesting a substantial market opening in this area.” The short paper provides arguments against the idea that U.S. procurement markets are already fairly open and accessible to European companies. The memo also takes aim at local decision making on procurement and preferences for small businesses.
“Dairy in Crisis: TPP Dumping on Dairy Farmers,” by IATP intern Erik Katovich, is a sober recitation of facts that raise important questions about the objectives of the U.S. Trade Representative’s (USTR) negotiation of the Trans-Pacific Partnership (TPP) Agreement.
First, as Katovich reports, global dairy prices continue to drop due to worldwide oversupply of raw milk, and U.S. dairy processors are dumping millions of gallons of raw milk into sewers. The dumped milk contradicts the U.S. Department of Agriculture’s (USDA) objectives to reduce food waste and conserve the natural resources used to grow dairy cattle feed. During the negotiations, the USDA projected a 20 percent increase in U.S. dairy imports by 2025 due to TPP rules. Given the vast U.S. oversupply of raw milk, why did the USTR lower the tariff rates on dairy products, including on milk protein concentrate (MPC), a powder that contains 30 to 40 percent of the protein of raw milk and casein, a starch used in processed cheese? In other words, why did the USTR favor MPC and casein importers to the detriment of U.S. dairy farmers?
Every day of the school year, more than 80,000 meals are served in the cafeterias of the Minneapolis and St. Paul Public School Districts—that’s over 1.3 million meals a year. While these school districts are two of the largest in Minnesota, they share the daily rhythm of providing meals and snacks with the other school districts in the state—over 540 districts in total, which spent close to $450 million in the 2014-15 school year on food service.
These school meals, as well as those served by other public and private institutions—such as hospitals, universities and colleges, child care centers, government offices, prisons and beyond—are critical sources of nutrition for the 5.45 million Minnesota residents who rely on their services, either directly or indirectly. Beyond nutrition, the scale and consistency of institutional meals means that food purchasing—also called food procurement—by Minnesota institutions has a significant impact on the economy and environment of the state and the Upper Midwest region as a whole.
While civil society groups around the world raise a variety of concerns about the substance of free trade agreements, for the most part their criticisms begin with the lack of transparency. Instead of a robust public debate on the merits of the issues under negotiation, civil society groups are forced to rely on bits of leaked text or the evidence of past trade agreements to guess at what might be under negotiation. In the U.S., members of Trade Advisory Committees (which are heavily dominated by corporate advisors) have greater access, but are sworn to secrecy. In the Transatlantic Trade and Investment Partnership (TTIP) process, EU and U.S. legislators are allowed to make appointments to view consolidated negotiating text, but they must do so in a closed room, without access to experts to help them discern what the reams of bracketed text could mean for the issues they care about.
The EU has taken some important steps towards greater transparency in the TTIP negotiations with the publication of negotiating objectives and some textual proposals. That openness has not been matched by the U.S. Information on the U.S. Trade Representative’s website describes general negotiating objectives, and meetings with U.S. trade officials rarely provide more than clues about the issues being debated in TTIP.
The farm economy is beyond struggling. Farm income was 50 percent lower in 2015 than in 2013 and is expected to drop further in 2016, reports the USDA. Prices for commodity crops, livestock and poultry are tumbling. Farmland prices are declining. Farm debt is rising. Approximately 45 percent of crop farms are in poor financial condition. Under these dire conditions, a new proposed trade agreement, the Trans Pacific Partnership (TPP), is being pitched as a savior for the farm economy. But given the experience of past trade deals, this will be a tough sell.
Last November the Trans-Pacific Partnership Agreement (TPP), a trade and investment agreement between the U.S. and 11 other countries of the Pacific Rim was published. Finally, there is a proxy for the U.S. position in the TTIP negotiations on Sanitary and Phytosanitary Measures (SPS), i.e. the food safety and animal and plant health rules and enforcement practices that must protect consumers. Since the U.S. Trade Representative (USTR) prohibits release of its draft TTIP negotiating positions to the public, we are forced to use the TPP SPS chapter as a next best alternative for constructing a ‘dialogue’ between the negotiating proposals of the European Commission and the SPS chapter that the USTR is likely to propose for the TTIP. Our initial analysis of the texts and the institutional capacity of governments to enforce the texts to protect consumers leads to several recommendations, including the following:
In a February 4 speech at the Georgetown University Law School, Commissioner Sharon Bowen, of the Commodity Futures Trading Commission (CFTC), responded concisely to one of two questions she was asked to discuss: “Is Wall Street reformed? The short answer is no.” The following blog illustrates just a few details entailed in that “no.”
CFTC Chairman Tim Massad was summoned to the House of Representatives on February 10. Members of the Committee on Agriculture, which oversees CFTC’s legal obligations, asked him why the CFTC isn’t doing more with less to make it easier for Wall Street hedge funds to make a killing from the automated trading systems (ATS) that remain under-reported and thus “dark” to regulators. As the Wall Street Journal reported on January 26, “The market upheaval [in oil, stocks and currency prices] has provided near-ideal conditions for so-called commodity trade advisors or CTAs, hedge funds that use computer programs to guide how they trade.” ATS-exacerbated extreme price volatility is a very profitable playground for the still unregulated automated traders.
One reason the TPP is in such trouble, especially in the United States, is that we’ve heard this story before. Passing NAFTA, CAFTA or other free trade agreements was supposed to mean more and better jobs, improved farm incomes and increasing prosperity all around. But that’s not what happened. In the wake of NAFTA, manufacturing jobs have evaporated, family farms have been decimated and income inequality has increased. Projections that this time around the TPP would generate increasing prosperity are met with a healthy dose of skepticism or outright disbelief.
Another part of the story is the strong opposition across borders. A big outcome of the NAFTA debate was the formation of strong ties among citizens’ groups in Mexico, the U.S. and Canada that refocused the discussion away from one country “stealing” jobs from another to a central emphasis on the role of transnational corporations in driving standards down to the lowest common denominator. An important element of the eventual defeat of the Free Trade Area of the Americas was the creation of the Hemispheric Social Alliance, allowing national and sectoral coalitions to coordinate analysis and actions across borders.
Last week Mexican civil society groups convened organizations from the NAFTA countries plus Peru and Chile to reenergize that collaboration in the context of TPP and build an action plan moving forward. It was great to see allies from Mexico and Canada, especially the coalitions that began during the NAFTA debate. It was inspiring to meet leaders from vibrant coalitions in Chile and Peru, as well as people working on digital rights and other issues that are relatively new in the trade debate.
The ability of the United States to make its own decisions regarding how, where and why to build transcontinental oil pipelines has been challenged by TransCanada Corporation, which sued the U.S. yesterday for the loss of potential future profits associated with the cancellation of the Keystone XL pipeline. The move represents a threat to both U.S. national sovereignty and national security, given the role of energy policy in protecting the homeland. The suit could also establish a precedent for challenging sovereign rights to address climate change through energy policy, not just in the U.S., but in any country that is party to the North American Free Trade Agreement (NAFTA).
The standing of TransCanada to sue the American government is provided not in any formal U.S. legal judiciary setting, but through rules laid down in a trade regime, NAFTA. The terms of this agreement, and other similar trade agreements, are designed to protect the rights of foreign investors over the rights of the states in which they are investing.
If successful, the suit will incur more losses to U.S. citizens than those associated with sovereign rights and national security. TransCanada is asking for $15 billion dollars in lost potential future profits. Furthermore, in an additional suit filed in Houston, Texas, TransCanada is seeking to limit the power of the President of the United States in setting U.S. energy policy by claiming that the Keystone decision was unconstitutional.