Posted December 1, 2016 by Shefali Sharma
Our tour across Europe on Selling Off the Farm Corporate Meat’s Takeover Through TTIP and its links to the EU-Canada Comprehensive Economic and Trade Agreement (CETA) launched on November 29 at the European Parliament. IATP’s Senior Advisor, Sharon Treat, Waldemar Fortuna from the Polish organization, IGO and I met with several members of the European Parliament (MEPs), including coordinators of different political parties that will decide CETAs fate in early February.
In the last two years, there has been an unprecedented awakening by ordinary citizens across Europe about the damage that free trade agreements do to policy making in the public interest. People have begun to understand that treaties, such as CETA and the Transatlantic Trade and Investment Partnership (TTIP), give transnational corporations even more power to expand and consolidate than they already possess. Many citizens have begun to challenge key elements of these agreements—such as the provisions that allow these corporations to sue governments for enacting public policies that might dampen their profits.
We set out to highlight key concerns that our research revealed about how agreements such as TTIP (and CETA) undermine their jobs as Parliamentarians, particularly when it comes to issues Europeans really care about like cloning, GMOs, and how meat is produced and processed. It became evident quite quickly that while many agreed or hesitatingly admitted that perhaps TTIP went too far in that realm, they were more than relieved to be able to say that CETA was no problem at all.
While politics in many of their countries involves serious crises in the agriculture sector—crashing dairy prices, rising input costs, a struggling beef production sector, the phasing out of small family farms—many of them believed that the competition with Canada would be beneficial to European farmers. Some Eastern European MEPs felt that joining the EU had transformed their economies in a positive direction, so certainly further opening up to free trade deals with industrialized countries will also be beneficial.
Never mind that CETA contains many of the same provisions that TTIP would, or that the Canadian meat market is not really “Canadian,” but rather North American. One of the clear outcomes of the North American Free Trade Agreement (NAFTA) has been the integration of the North American meat and feed industries. As a result, the meat industry can shuttle animals between the U.S., Mexico and Canada to cut costs of production and still market products as made in Canada or the U.S. That is until the U.S. implemented Country of Origin Labeling (COOL) for meat that required processors to state where the animal was born, raised and slaughtered. Ironically, Canada and Mexico, on behalf of the North American Meat Industry, put an end to this much desired consumer demand. They brought a challenge to the World Trade Organization, complaining that the U.S. law goes against free trade, and they won. The congressional lackeys of the meat industry in the U.S. were only too happy to repeal the law.
The European Parliamentarians have failed to understand this dynamic, that a free trade deal with Canada on agriculture, particularly meat, is also a deal with the United States—because these companies are neither American or Canadian. They are both. And what this means is that CETA, like TTIP, will hasten a very different agriculture system than what most European farmers and consumers want.
JBS and Cargill together control 90 percent of beef processing in Canada. And perhaps by 2019, JBS will be headquartered in Ireland. It is the world’s largest meat processor and also one that has aggressively bought out major brands in the U.S. and worldwide. Though currently headquartered in Brazil, having received substantial support from Brazil’s national development bank BNDS to become a “national champion,” the company had plans to move to Ireland this year, but BNDS shot this down recently. However, JBS’s shareholder agreement with BNDS ends in 2019 after which the company would be free to relocate to Europe.
The disconnect between these Parliamentarians and the voters they represent couldn’t be more stark—and I was reminded of Donald Trump’s election as President. How badly the Democrats had miscalculated the disenfranchisement of Americans from their democracy, how angry they are at corporate control of that country—that they are willing to elect someone, even a corporate tycoon, who says that he will end corporate control, create jobs and end free trade deals that hurt American citizens. I am afraid for the European Parliament and for the European Project, because as long as they continue to ignore the protests and petitions and rightful critiques of these free trade deals, they are likely to repeat the same mistake that has, in part, led to Brexit and Trump.
Posted November 30, 2016 by Ben Lilliston
In country star Jason Aldean’s song Fly over States, he overhears first class passengers on a flight from New York to LA, looking down on the countryside and wondering, “who’d want to live down there, in the middle of nowhere.” Aldean then flips the dismissive line into a proud anthem about the middle of the country. Like the song, Donald Trump flipped the predictions of the professional political class and rode a wave of support from many people who felt over-looked in those fly over states all the way to the Presidency.
The power of the so-called fly over states in the election is impossible to ignore. The electoral maps tell the story. A swath of red, often mostly rural, states in the middle and south of the country, bookended by blue states on the coasts. Even within the few Midwest blue states like Minnesota and Illinois, you can see the stark divide between how urban and rural counties saw the candidates. A look back at the 2012 electoral map tells us this divide is not new, but perhaps wasn’t taken seriously by many Democrats because President Obama won. As the Daily Yonder reports, the long-standing urban-rural voting gap is widening. At least part of this voting gap can be attributed to the Democratic Party’s loss of credibility on a number of core issues that affect the lives of rural communities in those so-called fly over states.
The state of rural politics lies squarely within the condition of the rural economy. Rural communities have higher poverty rates, more persistent long-term poverty rates, and higher child poverty than urban communities. There’s been a steady decline in rural and small town main street businesses, accompanied by a decline in rural business lending. Nearly two out of three rural counties lost businesses, on net, from 2010 through 2014 – even as the rest of the country recovered from the recession. Rural infrastructure is seeing disinvestment and rural bridges and roads are increasingly being closed as public money shrinks. Rural grocery stores are disappearing and there is a significant digital divide that hampers rural businesses without broadband access.
These economic challenges, particularly the loss of rural-based manufacturing, provided the backdrop for Trump’s narrow (yet effective) attacks on free trade deals. In smaller towns, the loss of a manufacturing plant or anchor business hits harder than urban centers with more job opportunities. Though both parties have long supported free trade agreements that took American jobs offshore and kept wages stagnant, it was Bill Clinton who signed the North American Free Trade Agreement (NAFTA); and it was Barack Obama who, having failed to address the problems with NAFTA (as he’d promised to), actually expanded the NAFTA model to create the proposed 12-nation Trans-Pacific Partnership.
There is another storm returning to the rural horizon; an emerging farm crisis. Prices for many commodities are below the cost of production, farm debt to income is the highest in three decades, farmland values are decreasing, and dairy farmers are dropping by the hundreds. These neon warning signs of trouble in the farm economy were virtually absent from the Presidential campaign. The Democratic party platform afforded 80 words to agriculture, which, as John Nichols of the Nation pointed out, fell well short of the attention given by previous Democratic platforms.
Many Midwest farmers still bear the scars of the farm crisis of the 1980s, when farm foreclosures and suicides were part of the countryside. In his seminal 1987 piece, Crisis by Design, IATP’s founder Mark Ritchie documented how government policy steadily eroded programs that focused on keeping farmers on the land through fair prices in the marketplace. Over a series of Farm Bills, agribusiness lobbying drove an intentional push toward fewer, big farms, characterized by the blunt call for farmers to “get big, or get out.” The final dismantling of the older farm programs culminated in the Freedom to Farm Bill of 1995 during President Clinton’s administration. Journalist Sienna Chrisman picked up where Crisis by Design left off, in a recent article explaining how a broken farm policy has set the stage for the emergence of Trump.
Addressing an anti-competitive marketplace for farmers and ranchers, fueled by increasing corporate concentration in the agriculture sector, was a priority for Presidential candidate Obama in 2008. Within his first year, a series of field hearings held around the country were organized by the Department of Justice and Department of Agriculture focusing on the anti-competitive elements of the meat, poultry and seeds markets. But the issue quickly faded and no action was taken.
Trump’s rhetoric on agriculture mirrored the directness of his talk on trade. He charged that there is a “war on farmers” preventing them from being profitable, and laid the blame for that war not on a mix of factors including volatile, anti-competitive markets, but solely on regulators. Regardless of this dubious claim, Trump’s strong words filled the largely silent void left by Clinton and many Democrats when it comes to agriculture.
Health care is another major issue for many farm families and rural citizens cobbling together part-time jobs, unable to rely on the health insurance of larger employers. Rural communities have fewer public resources for emergency medical services, less elder care, and less child care available than urban communities. More than 60 rural hospitals have closed since 2010, and more than 650 are vulnerable to closing. Rural adolescents commit suicide at roughly twice the rate as their urban peers. A recent study from the Center for Disease Control found that of all professions, the risk for suicide was highest among the rural-based jobs of farmers, foresters and fishermen. Rural drug and alcohol treatment centers have less access to highly-trained counselors.
When premium rates from so-called Obamacare jumped recently—it was particularly felt in rural communities. Again, candidate Trump’s strong message, though simplistic, resonated: you can blame the disastrous Obamacare for all your health care problems.
Finally, it’s worth noting that the inability to hold Wall Street accountable for the financial crisis is yet another issue where Democrats have lost credibility with working people. The Obama Administration’s failure to jail a single Wall Street executive in the wake of the financial crisis that caused massive foreclosures and job losses—combined with Hillary Clinton’s secret, lucrative speeches to Wall Street—allowed Trump to paint the Democrats as part of a rigged system that is unable to stand up to Wall Street.
Much of the post-election analysis has emphasized the inability of Clinton to galvanize the so-called Obama coalition – as if simply mobilizing those non-rural voters in the future will solve all problems. According to Politico’s Helena Bottemiller Evich, the Clinton campaign intentionally decided not to spend resources on rural voters, apparently only assigning a single staff person to rural outreach in their Brooklyn office late in the campaign. A similar disinvestment in rural policy and outreach took place at the Democratic National Committee and the House and Senate rural policy outreach committees, writes rural strategist Matt Barron.
The Democratic and Republican party infrastructures are not alone in overlooking many key rural issues. The private philanthropic community was recently called out by USDA Secretary Tom Vilsack for not funding in rural America. A recent USDA report found that rural communities, which account for 19 percent of the population, received only six to seven percent of foundation grants from 2005 to 2010.
There is an urgent need for new ideas and real solutions to the challenges facing rural America. Last year, Farm Aid held its 30th anniversary concert and brought together leading family farm activists of the 1980s. They talked about the dark economic times of that period and the personal trauma that many families went through, but also the very real danger of violence in the countryside at that time. Mark Ritchie talked about how essential it was “to build a movement based on peace…. If we’re not there to address peoples’ real hurt, if we’re not there to provide a real analysis of where this is coming from and if we’re not there to take real action, the right wing and the extremists will go in and scoop up people who are angry and frustrated—people who’ve done all the right things and served their country in all kinds of ways.”
Climate policy and politics provides some cautionary lessons on what can happen when rural communities are considered an after-thought. Rural economies are particularly natural resource based, whether forestry, agriculture or mining. They are already experiencing climate change—and will have to be part of the solution. Yet, the rural-urban political divide widens when most climate-related proposals start with raising fuel and energy costs for rural families (who already have higher transportation and energy costs), and in some cases, putting rural people out of work as in the case of coal. Rural resistance to climate action has often been viewed as a “messaging” problem by environmentalists—rather than a need to better understand these challenges, and actually involve rural citizens in designing a new approach to climate policy.
In his mea culpa column, Rolling Stone’s Matt Taibbi writes that he and the media misread the election by following polls and experts instead of “hearing things first hand.” Taibbi writes, “Just like the politicians, our job was to listen, but we talked instead.” The New York Times public editor Liz Spayd chastised the paper for being too focused on brief interviews that often created caricatures, rather than taking “readers deeper into the lives and values of the people who just elected the next president.”
Many of the core issues facing rural America are shared by people in all parts of the country: economic uncertainty, wage stagnation, overwhelming personal and college debt, poor health care, and yes, a changing climate. Both political parties have done a good job dividing the country or worse, spreading a wave of apathy, without effectively addressing these issues. It will take a lot of work by people, organizations and institutions to pull it back together.
In his 2015 song Something More Than Free, country singer Jason Isbell sings about another value deeply rooted in so-called fly over states – the honor, dignity and pain of hard work. Isbell sings, “Sunday morning I’m too tired to go to church. But I thank God for the work.” Finding a more just, peaceful and inclusive path forward along with those who feel ignored and that the system is rigged – is the work for all of us.
(Coming soon from IATP—Ideas on what’s next)
Posted November 17, 2016 by Karen Hansen-Kuhn
Some dates get burned in our memories. One date that pops up for me each year is November 17, the day the U.S. Congress approved the North American Free Trade Agreement (NAFTA) back in 1993. Now, 23 years later, NAFTA is as controversial as ever. After a long battle in which civil society groups from all three countries worked together to draw public attention to the potential negative impacts and, even then, to propose alternative approaches to trade, the pact was narrowly approved in a late night vote.
Just days before the vote, all signs pointed to NAFTA’s defeat. But then, the power of back room deals to build a bridge in one district, to fund a study center in another (as well as assurances of side deals on things like tomato imports or cross-border trucking) overtook the opposition to the trade pact. Public Citizen later published an accounting of those deals, and the fact that many of the promises were never kept. Even before we knew the true cost of NAFTA—both in the questionable use of public funds and in the well-documented economic and environmental devastation that was to come in all three countries—it was a bitter defeat.
NAFTA was groundbreaking in many ways. It was the first major trade agreement involving countries at disparate levels of development. It extended far beyond the lowering of tariffs to address rules on energy, investment, intellectual property rights and other issues that empowered transnational corporations to shift production among the countries at will, drastically weakening the bargaining power of unions, farmers and small businesses. It introduced the investor-state dispute settlement (ISDS) provision that has allowed companies to sue governments over public interest laws, including the Keystone Pipeline challenge by TransCanada. It became the template for future trade deals with Central America, Peru, Colombia and others, and for the Trans-Pacific Partnership (TPP).
While civil society groups in the three countries had been working together to confront structural adjustment programs (neoliberal programs of deregulation, devaluation and privatization pushed by the World Bank and International Monetary Fund), this collaboration on the specific terms of a trade agreement, and the fact that it spanned both sectors and borders, was new and important.
Earlier this week, many of the members of Congress who led the opposition to the Trans-Pacific Partnership held a press conference to celebrate its defeat (at least for now). This resulted from years of efforts by Congressional leaders like Rep. Rosa DeLauro and massive campaigns led by unions, environmental groups, family farmers and others. Many of them returned to NAFTA. Rep. Marcy Kaptur spoke of the decades of work that led to this point. She should know. She participated in one of the first congressional delegations to Mexico on NAFTA, organized by the National Family Farm Coalition, and has continued to press the case in Congress and with colleagues in the three countries. She noted that, “The recent election results call on us all to recraft NAFTA and other agreements that are in place and to develop new models for fair trade.”
Of course, she’s not the first one to make that argument, but that’s kind of the point. NAFTA hurt manufacturing workers in the U.S. and family farmers in Mexico and there is nothing inevitable about it. We don’t need to be stuck with these rules forever.
There are other approaches to trade policy, starting with an open negotiation process that includes workers, farmers, and environmentalists, among others. Detailed negotiating objectives and draft negotiating texts should be published online before and after negotiating sessions so that civil society groups and legislators know exactly what is on the table. Without opening the process to the light of day, it is really inconceivable that we’d get results that are any different from the existing bad deals.
That press conference on November 15 was a much more hopeful moment than the dreadful NAFTA vote on November 17 so many years ago. It’s important to celebrate some wins, and to dig in to consider the hard and invigorating work moving forward to hold on to those gains and to insist on trade rules that rebalance not just trade deficits, but the deficits of fairness, sustainability and bargaining power that NAFTA left in its wake.
Posted November 4, 2016 by Josh Wise
Today is a Latin America wide day of action against the disastrous effects so-called Free Trade Agreements have had in undermining governments and the will of the people. Below is a public statement from the organizing groups, translated into English by IATP's Karen Hansen-Kuhn:
November 4: Latin America unites for democracy and against neoliberalism
The signing of Free Trade Agreements (FTA) has been the main vehicle for the globalization of the neoliberal-transnational model. Their drivers -the corporations and big media- promised wellbeing progress and development. But a quarter century later, we can say that FTAs have not met any of those promises.
To the contrary: in Latin America they have allowed the installation of extractive projects that threaten communities and the environment, have limited the action of States and have reduced the public budget, by putting corporate interests above the will of the people and life itself.
FTAs are about much more than trade among nations. Their pages include chapters on the liberalization of the services sector, protection of intellectual property and privileged conditions for foreign investors. The consequences in everyday life are categorical: rising prices of medicines, the privatization of public services such as drinking water and education, limits on access to the Internet, among others. The final effect is the deregulation of the private sector and reduction of the fiscal responsibility of businesses.
In short, free trade agreements seek to consolidate the power of transnational capital and in turn have captured the political authorities. They have even led to pressure on the environment that threatens the survival of the human species.
For all these reasons, on November 4 Latin America arises. We demand that no more FTAs are signed and we reject progress in the negotiations for the signing and ratification of Trans Pacific Partnership (TPP) and the Trade In Services Agreement (TISA).
Our countries face the threats of these new FTAs. Against this, in Chile, Argentina, Peru, Mexico and Colombia we say enough! We demand that our governments have the ability to regulate capital and to develop policies that allow us to live well and in harmony with nature. For democracy and against neoliberalism, peoples first, not profit. Latin America unites.
Posted October 20, 2016 by Sophia Murphy
As international trade diplomats contemplate the latest move in their world—a formal complaint by the United States about China’s use of price supports for its farmers, lodged at the WTO last week—I am in Delhi to present IATP’s most recent findings of U.S. agricultural commodity dumping in export markets. Dumping is the sale of goods for less than their cost of production. Dumping distorts markets, and especially in food markets, destroys livelihoods and opportunities for development.
In anticipation of the full report, here are some of the initial numbers. They show the return of dumping in 2015 for several major commodities. The dumping margin is: for wheat (33 percent), soybeans (11 percent), maize (14 percent), rice (2 percent) and cotton (49 percent). In IATP’s analysis, this renewal of relatively high levels of dumping for some commodities does not signal a simple return to the world before the price shocks of 2007-08. While production has responded well to higher prices, the risk of over-production—as well as environmental constraints as climate change takes effect—make high levels of volatility likely to persist in the medium to long term.
Dumping is usually raised by one government, which complains about another. The complaint focuses on the use of public support for sectors whose products are then exported at prices lower than cost.
IATP measures its dumping calculation a little differently.
These calculations do capture the role of government payments, which are especially high for cotton and historically have been high for rice. But the numbers also show that something else is going on. The level of government support just is not sufficient to account for the dumping margins we have measured. If the government is not paying the difference, or not all of it, who is?
The answers are speculative but suggest something about the structure of low value commodity markets, like soybeans and maize. If not the state, or not only, who else could be absorbing the cost of dumping? There are two other actors: the traders and the farmers. Is it the traders? It certainly is not the case that grain traders are operating at a loss. For instance, Cargill has more than doubled in size since I first looked at the company in 1999. Its gross turnover is now in the range of USD $1.1 billion. Commodity traders move in a financially risky world but they are not going bust by internalizing losses on underpriced U.S. agricultural commodity.
They may, however, be complicating the economic analysis. The traders are an oligopoly: just four companies between them trade more than 75 percent of grain that crosses an international market. This means there is scope for price distortion. Moreover, the traders do not just sell commodities to other processors. They are also processors themselves, producing feed for livestock, raising livestock, making food additives, and turning commodities into biofuels. This makes what economists call price discovery complicated: maybe the companies would take less than market value for raw commodities so as to keep their input costs low—making up the difference downstream—in their vertically integrated operations. The lack of transparency surrounding the operations of grain traders makes it difficult to know.
What about the farmers themselves? Clearly they rely on transfers from the government, but as we say above, those transfers are not enough to cover all the dumping cost. It is worth distinguishing between variable and full costs. Our dumping measure looks at full costs. The variable costs are those that the farmer has to face each year: the costs of buying seed, tractors, petrol, etc. The full cost adds a return to the farmer’s own labour and to the land. Of course, meeting variable costs is a lower bar. Agricultural economists tell us that as long as the variable costs are met, production will continue, even if full costs are not. Why? Because a farmer can choose not to pay him/herself (they own the business); because many farm operations in the United States have other sources of income to support the farm; because the U.S. has large areas of productive land for which there is little alternative use; because agriculture is very intensive in factors of production that do not readily move—deep knowledge; expensive equipment; geographically specific characteristics of water availability, soil composition; and weather patterns.
It is also the case that U.S. agriculture has seen an expansion of very (very) large farms that are managed by a company rather than independent operators. Their scale enables them to lower fixed costs significantly below the average numbers IATP uses from the U.S. Department of Agriculture.
An honest and productive discussion of dumping would start from this complex situation to consider new solutions that are fair to farmers and consumers in the South and North.
Here is some of my arguments for the conference opening:
But is the right to spend money on agriculture—and to downplay the effects of those programs on other countries—a sufficient objective for WTO negotiations? Can we instead imagine trade rules that do a better job of supporting states in their obligation to realize the right to food? Rules that respect environmental constraints, especially climate change?
Yes, we can.
Posted October 18, 2016 by Shiney Varghese
As the 43rd session of the UN Committee on Food Security meets in Rome this week they will finalize the negotiated draft recommendations on “connecting smallholders with markets”, developed with inputs from several hundreds of civil society organizations, including IATP. It has been a long process to get here.
At least since the food price crisis, if not from earlier, agricultural development initiatives have identified “connecting smallholders with markets” as an important strategy for ensuring the livelihood security of smallholder producers. However, most initiatives focus on integrating farmers and other smallholder producers into food value chains (vertically integrated companies that source, process and retail their products, such as Pepsi Co and Nestle), rather than exploring what kind of marketing channels would best fit the local needs of food producers, and consumers.
Unsurprisingly when the UN Committee on Food Security (CFS) convened a technical team to organize a High Level Forum on connecting smallholders with markets, it supported the dominant ideas about markets. The Civil Society Mechanism (CSM) of the CFS questioned that assertion. The CSM represents 11 distinct constituencies, including smallholder producers such as pastoralists and fisher folk. As result of CSM efforts, the experiences of small-scale producers’ organizations, consumers and the urban poor were fed into the background document, as well as at the High Level Forum itself in June 2015. In October of that year the CFS initiated a work-stream on “Connecting smallholders with markets”. The ensuing discussions during the CFS annual summit last year sought to recognize the multiple, invisible markets that food producers, especially in indigenous communities, use for sourcing and selling their products and produce.
A case study on IATP’s experience of working with small acreage farmers (also known as smallholder producers in international contexts) in Minnesota is one of the several case studies that the CSM gathered from around the world to demonstrate the multiple ways in which smallholders manage their markets in a way that is beneficial to themselves and the consumers.
The IATP case study looks at a marketing initiative in two counties in Minnesota (MN), USA, which connects the Hmong American Farmers Association (HAFA) with the Head Start Program run by the Community Action Partnership of Ramsey and Washington Counties (CAPRW) in Minnesota. IATP’s experiences in this ‘Farm to Head start program’, demonstrate the need for targeted programs and policies to help these farmers access markets on their terms, and to ensure incentives for local food processors accommodate the distinct and locally specific needs of small acreage farmers. The multiple benefits include enhanced economic and social wellbeing of the communities; respect for the traditional food cultures of local communities, and ensuring that next generation is nurtured on healthy food habits.
Currently, marketing structures are dominated by vertically integrated multinational food chains. Both consumers and producers are looking for alternatives to the current marketing structures, and IATP’s purpose in sharing this case study was to show policy makers how new marketing channels are being explored in the United States. Examples from Minnesota include not only vibrant farm to institution networks (Farm to School; Farm to Hospital etc.) and farmers’ markets but also Community Supported Agriculture.
These case studies were shared with the world governments during an information session in the lead up to this year’s CFS summit, During the intergovernmental negotiations that followed, the CSM referred to the IATP case study along with those from Belgium, Brazil and France to show how food procurement policies can be tailored to support smallholders needs and their viability. In its report on the process, the CSM urged governments to continue to collect comprehensive information on local, national and regional food systems as a regular aspect of data collection systems and to make that information available to smallholders.
The CSM publication that came out last week on the topic addresses many of the issues involves and concludes that, “The ‘Connecting to Smallholders to Markets’ process and negotiated text have illuminated the vital issue of the links between smallholders, markets, and food security and nutrition. It is important that the recommendations are treated with the seriousness they deserve and are followed up on, at the CFS but above all at local, national and regional levels, with smallholders in a leading role. [………] To ensure effective follow-up and sound policies, it is vital to fill the existing gap of information and analysis regarding territorial markets. It is necessary to be able to map territorial markets and to better understand their functioning, their relationships with smallholders and food security and nutrition, the interplay between formal and informal markets, the links between territorial markets and sustainable agroecological production models. To this end, the negotiated recommendations call for:
Collecting comprehensive data on markets linked to local, national and/or regional food systems—both rural and urban, formal and informal – to improve the evidence base for policies, including age, gender, and geographic-disaggregated data, incorporating this as a regular aspect of data collection systems, and making this information available to smallholders(10i)
As the 43rd session of the UN Committee on Food Security meets in Rome this week to finalize the negotiated draft recommendations on “connecting smallholders with markets”, we are hopeful that these policy proposals will be integrated and mainstreamed not only within CFS but also in other UN processes, paving way for policies enabling fair marketing pathways around the world.
Posted October 18, 2016 by Juliette Majot
Corporate interest-driven trade agreements, including the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) are undermining the very principles of government by the people, and if approved, would continue to reverse hard-won progress for environmental integrity, social justice and economic development. It doesn’t have to be that way.
Tweaking current negotiated texts won’t fix the problem. But hitting the reset button on trade agreement objectives, trade negotiation processes, and actual trade rules themselves could bring about trade that stands a chance of enhancing the lives and livelihoods among trading partners. For all their public pronouncements against free trade agreements, both U.S. presidential candidates need to be part of the effort to reimagine trade with a vastly different set of objectives than those limited to corporate welfare.
The real and potential value of trade itself—to all trading parties, not just Americans—can be lost in the debate about the rules that govern it. The exchange of goods and services, over small and large distances, is thousands of years old, and the benefits innumerable. Opponents to the TPP or TTIP do not dismiss trade itself; instead, we seek to establish trade rules that are beneficial to the public interest rather than rules that reflect and perpetuate the prevailing imbalance of political and corporate interests. And because trade agreements have become political hot potatoes, not just in the U.S. but worldwide, we are in a moment when resetting trade objectives is possible.
What exactly, do Hillary Clinton and Donald Trump envision? There is nothing in either of the candidate’s positions that tell us how or if trade agreements could, for example, improve the odds of addressing climate change; contribute to sustainable agriculture and food safety; or reinvigorate democracy instead of unhinging it. There is no reason to assume that trade agreements could not aspire to contribute to all of those things and more.
When it comes to climate change, agriculture and food, consider the potential for trade rules to:
New trade agreements with the goal of benefiting society as a whole require common sense and well-articulated opening arguments for how trade agreements should be negotiated, what they should and should not contain, and how they should be governed.
Alas, well-articulated arguments are not coming from U.S. presidential candidates. The deeply disturbing spectacle of the U.S. election is full of nonsense and obfuscation, devoid of genuine policy debate, though trade policy is heavily sampled in what mash-up there is. Neither Hillary Clinton nor Donald Trump have a clear vision of what trade agreements should look like, except to say that they (to paraphrase) should be tougher and better for America.
Corporate-driven trade agreements like the TPP and TTIP, both of which have become publically unacceptable and therefore politically unpalatable, aren’t about what is or is not best for America or for that matter, any other country. For the most part, they aren’t even about trade. With their negotiations guarded from public scrutiny, trade agreements are written and negotiated by corporate interests whose primary concern is to regulate the public sector so that the public sector can no longer regulate them.
The breadth of public sector regulation contained in TPP, is well documented and continues to swell public opposition. TPP provisions limit the government’s sovereign ability to introduce new laws in the public interest, including those related to food safety, financial reform, labor rights, environmental protection, procurement policies, and pharmaceutical pricing. They undercut emerging international commitments at every level. Under TPP, the odds are significantly lowered for any signatory country to achieve its targets for climate change mitigation under the Paris agreement. Those same restrictions also chip away at hard-won local laws on the environment, public health and sustainable food systems. The result? Further entrenchment of the corporate interests squelching democracy and putting the concept of it on shaky ground.
Trade agreements must no longer be wielded by the economically and political powerful as equal-opportunity sledge hammers to pound away at those with less power. Markets cannot be treated as though they exist in a world other than the one we have: the one facing the extraordinary warming of the planet; the one experiencing growing inequality; the one where worsening political and economic tensions undermine the peace and security of the people who live on it. Trade aimed at solving these problems, instead of fueling them, is the only trade worth having.
Posted October 14, 2016 by Dr. Steve Suppan
Notwithstanding President Barack Obama’s best efforts to sell the Trans-Pacific Partnership (TPP) Agreement to Congress and the public on economic grounds, presidential and congressional candidates are shunning the TPP as a winning campaign issue. Even Senator Rob Portman, a former U.S. trade representative, doesn’t mention the TPP in his electoral “Jobs and Growth” agenda. The economic forecasting arguments for TPP are very weak—even according to the “heroic assumptions” of proponents, such as no change in the U.S. trade balance or net employment as a result of the TPP. So, what arguments do the TPP proponents have left?
When Congress returns to Washington after the November 8 elections, its members, particularly the defeated or retiring legislators, will be pressured to vote for the TPP in large part on national security grounds. What these grounds are, just like the draft TPP texts themselves, will remain a closely guarded secret.
Representative Ron Kind (D-WI) told Inside U.S. Trade that following a classified national security briefing about the TPP, “It’s a very powerful argument; it’s not just trade, it’s an important tool in our diplomatic and national security arsenal.” He could not reveal the details of the “very powerful argument” without violating his security clearance. After the elections, Kind said, military leaders (presumably retired, since active duty officers are not allowed to lobby) would be deployed to lobby Congress to vote for the TPP. There will be more classified briefings for members of Congress, followed by more press conferences about the “very powerful argument” whose reasons the Peoples’ Representatives cannot reveal publicly without serious legal repercussions. Justifying one’s TPP vote on opaque national security grounds will surely be easier than trying to justify the vote on economic grounds, as Kind’s own situation illustrates.
Representative Kind’s plan for aiding economically distressed Wisconsin dairy family farms in his district involves removing export barriers and legalizing the immigrant work force that is the labor backbone of mega-dairy Confined Animal Feed Operations (CAFOs). Although Kind is a leading Democratic TPP supporter, the plan does not mention the TPP, as one of his aides noted. If it were to mention the TPP, Representative Kind would have to answer questions about the impact of increased TPP dairy ingredient imports on low and plummeting U.S. raw milk prices. He would have to answer, as IATP did recently, why TPP supporters want to increase dairy ingredient imports when U.S. dairy processors are pouring U.S. farmers’ raw milk into high-tech sewers. Since the main beneficiaries of this dairy import scheme are convicted U.S. raw milk price fixers, such as the Dairy Farmers of America and Dean Foods, the better part of valor dictates that Representative Kind justify his vote for the TPP on the basis of classified national security briefings.
On September 28, Secretary of State John Kerry asked, as if representing the TPP’s other 11 prospective members, “If America won’t enter into partnership with us on economic matters, why should we look to Washington for guidance on political or security matters?” Secretary Kerry’s ventriloquized question makes sense if you believe that the United States has geopolitical and military security influence only to the extent that it can use trade policy as a “soft power” tool to reward or punish countries in President Obama’s “pivot to Asia.”
But consider just some of the sources of that influence. The U.S. military budget is larger than the next seven military budgets combined (not counting the military budgets of U.S. intelligence agencies). The National Security Agency is authorized to spy on 193 countries and 20 international organizations, as well as to report on the activities of foreign corporations. Doesn’t the United States already control sufficient sources of influence in political and security matters so that prospective TPP “partners” would seek U.S. “guidance” regardless of whether or not Congress approves the TPP? President Obama and his successors will hardly need the TPP to order the intelligence agencies to determine whether foreign corporate activities pose a present and imminent danger to the United States or are stealing U.S. intellectual property. Nevertheless, would-be foreign policy realists (ignoring the prospective Latin American members of the TPP) contend that a successful “pivot to Asia” turns on the approval of the TPP.
the pivot’s legacy ultimately will be determined by ratification of the TPP. The 12-member free-trade pact, the first to include the world’s second- and third-largest economies, is not just important for business. As a high-standards agreement it has the potential to affect more than just tariffs, reaching deep into member countries to create conformity on labor, the environment, food safety, intellectual property, cybersecurity, the digital economy, development, and other standards. If China were to join the TPP, conformity with these clauses would have a transformative strategic effect on the nature of the Chinese state. Though a distant outcome at the moment, it is not implausible.
This kind of argument, however appealing to foreign policy hawks in its idealism, is thoroughly implausible on a number of grounds. We outline just three here.
In a rebuttal to Secretary Kerry’s geopolitical argument for passing the TPP, Representative Sander Levin, the top Democrat on trade and investment issues in the House of Representatives, said “An agreement that is not in our economic interest cannot be in our national security interest because our national security depends on our economic strength, including in manufacturing.” He warned the Obama administration not to try to pass the TPP during the lame duck session. To do so would intensify citizen opposition to what he called a “mindless approach that assumes more trade is always better, no matter what its terms.”
Among the issues Levin wants the next administration to re-negotiate is the Investor State Dispute Settlement (ISDS) Mechanism, which allows corporations and other investors, such as hedge funds, to sue governments over regulatory actions perceived to impair anticipated investor profits. The ISDS, which IATP opposes, is a one-way private tribunal that provides governments with no recourse to sue investors for cross-border regulatory evasion and harm to public, worker, and environmental health caused by investor activities.
It’s important to detail exactly how U.S. trade and investment policy substance and process should change, something IATP and many others are developing now. But to give Levin’s proposals and those of others a chance to become part of U.S. trade and investment policy, policy space for them must be created by defeating the TPP.
Posted October 5, 2016 by Ben Lilliston
Earlier this week, the European Parliament approved the Paris climate agreement, joining more than 60 other countries in signing the deal and paving the way for this historic global effort to enter into force. While the Paris deal is truly a major step forward, countries will have to overcome a series of hurdles created by trade agreements to reach their climate goals. An escalating fight at the World Trade Organization (WTO)—attacking renewable energy initiatives in two of the world’s biggest polluting countries (the U.S. and India)—shows why untangling trade agreements from climate goals should be the next big step.
As part of the Paris agreement, countries submitted voluntary climate plans, known as Intended Nationally Determined Contributions (INDCs). But the ability of countries to reach those climate goals will depend on rewriting trade rules at the WTO—and a series of regional and bi-lateral trade agreements—that consistently favor corporate rights over the climate.
The WTO fight between the U.S. and India proves the point. The U.S. Trade Representative (USTR) launched its challenge of India’s solar initiative at the WTO in 2013. As part of the USTR’s commitment to eliminate what it calls “localization barriers to trade,” the agency charged that India’s program included subsidies and incentives that benefited India solar cell and module makers over U.S. companies. The USTR claimed that India’s “local content requirements” violate WTO national treatment obligations, which require foreign firms to be treated the same as domestic firms. India pointed out that the solar program served the same purpose as many green jobs programs in U.S. states that also supported renewable energy and that India’s solar program was essential to meeting their INDC as pledged in the Paris climate agreement.
Last month, a WTO panel issued a final ruling determining that India’s program did violate WTO rules. The country will either have to change the program or face U.S. retaliation in the form of tariffs. In response, India took initial steps at the WTO to challenge renewable energy programs that create local, green jobs in eight U.S. states.
Trade rules become even more thorny for the climate when it comes to regional free trade deals, like the North American Free Trade Agreement (NAFTA) and the proposed Trans-Pacific Partnership (TPP), which are designed to go further than WTO rules. For example, the proposed TPP not only allows countries the right to challenge national regulations—covering areas such as government procurement, financial services, intellectual property and food safety—but it also grants foreign corporations the right to challenge such regulations.
Earlier this year, TransCanada utilized these special corporate rights provisions, known as Investor State Dispute Settlement (ISDS), to sue the U.S. government for $15 billion after President Obama rejected the Keystone Pipeline on climate grounds. Other ISDS cases have challenged off shore drilling, fracking for natural gas, and a series of energy intensive mining projects.
In a report released last month, we looked at the INDCs of TPP countries and potential ways the trade deal could undermine national climate goals. The results were alarming. TPP rules will impact sectors like energy, agriculture, forestry and mining—all major contributors to climate change. The TPP also ties the hands of governments developing policies to address climate change, like popular green jobs programs. With 30 chapters and more than 5,000 pages, nowhere in the TPP do the worlds “climate change” appear.
Finding ways to reconcile the growing conflict between trade rules and climate goals is getting more attention, including from the United Nations Conference on Trade and Development (UNCTAD). The Sierra Club’s Ben Beachy has proposed a Peace Clause at the WTO, which would prevent future cases against climate initiatives. Others have proposed a climate club, which focuses on the biggest polluters putting a price on carbon and taxing imports from non-member countries.
The weakness of the Paris climate agreement is that it is based on voluntary pledges. Without legal enforcement, the deal largely relies on peer pressure. Those voluntary pledges are scheduled to ratchet up over time and could ultimately add real teeth for enforcement; but trade deals already have teeth. They will continue to chew through the Paris climate deal until countries come to grips with their past appetite for trade above all else.
Posted October 4, 2016 by Shiney Varghese
On 21 September 2016 the United Nations (U.N.) newly convened High-level Panel on Water (HLPW), called for a fundamental shift in the way the world looks at water. Supported by the World Economic Forum and its water initiative, the HLPW was formed to help “build the political momentum” to deliver on the U.N. mandated Sustainable Development Goal (SDG) on “water and related targets” that the U.N. member governments agreed to in 2015.
The HLPW is co-convened by the United Nations Secretary-General Ban Ki-moon and the President of the World Bank Group Dr. Jim Yong Kim. Co-chaired by the presidents of Mexico and Mauritius, the Panel is comprised of 11 sitting Heads of State and Government and one Special Adviser “to provide the leadership required to champion a comprehensive, inclusive and collaborative way of developing and managing water resources, and improving water and sanitation related services”.
But will the HLPW provide this leadership? How do we ensure that the leadership is inclusive, transparent and accountable?
The Panel was announced at the January 2016 World Economic Forum in Davos, ringing alarm bells for those who have been monitoring the post 2015 processes at the United Nations. Last summer, water justice activists were extremely concerned that the draft text on Sustainable Development Goal (SDG) 6 on water did not clearly recognize water as a fundamental human right. Their relentless advocacy forced the U.N. Member States to reaffirm their commitments regarding the “human right to safe drinking water and sanitation” as part of their vision for Transforming the World through the 2030 Sustainable Development Agenda.
Barely six months later, when the High-level Panel was announced—at a venue dominated by transnational corporates, a forum where rich and powerful mingle and plan for the future —it raised some red flags. When the Panel was officially launched in April 2016 in New York, civil society organizations (CSO) raised their concern that the HLPW appeared to be an initiative led by the World Bank. Meera Karunanandan, one of the key CSO campaigners said, “With the World Bank now positioning itself as a leader in the implementation of the SDG on water, groups who fought for a rights-based perspective are now deeply concerned that the agenda will very quickly be steered away from human rights objectives in favor of a plan to manage water to meet the World Bank’s vision for economic growth.”
The CSO advocacy led to an official action plan that lists a number of key considerations and principles that have guided the panel so far. These principles include a commitment to the human right to safe drinking water and sanitation, as well as to transparency and inclusion.
However, this does not mean we can be assured that the panel will continue to be guided by these principles.
Earlier this year, for example, Mexican civil society groups were forced to file a court case seeking information on the contents of any negotiations or agreements between the World Bank and the Government of Mexico City. (According to widely-published statements from the Mexico City Mayor, the World Bank is loaning 10 billion pesos for concessions to operate the city's hydraulic infrastructure).
This lack of transparency led international organisations, such as the Public Services International, to raise concerns about the direction the High-level Panel might take, given that “the President of Mexico, Enrique Peña Nieto, heads the recently formed United Nations and World Bank High-level Panel on Water, mandated to find new ways to achieve the U.N.’s Sustainable Development Goal 6 for the Right to Water and Sanitation. The secrecy surrounding the Mexico City agreement does not speak well for the direction that the Mexican President might be considering for this new Panel.”
The news last week from Mexico, on the proposed federal budgetary allocations on water for 2017, underscore the concerns raised by Public Services International. Our colleagues, Gloria Tobón, Ricardo Ovando and Elena Burns of Agua para Todos Agua para la Vida, Mexico, commented that:
In the 2017 Federal Budget proposed last week by Enrique Peña Nieto's administration, funding for public water system infrastructure was cut by 72 percent! (from 12.6 billion pesos to 3.6 billion pesos). Meanwhile,the budget for the megatunnel to export Mexico City's rainwater (which the city needs in order to supply itself through sustainable reservoirs) to Carlos Slim’s PPP ‘treatment’ plant--which was increased from 3.1 billion to 3.2 billion pesos.
[See this detailed report for more information on that scheme.]
Meanwhile, the Mexico City mayor just announced once again, on September 6, that the World Bank and Veolia will be investing in every aspect of the city's water infrastructure. In response to legal demands for access to information on these deals through the Mexico City transparency agency and then in local and federal courts (initiated after a similar announcement in November last year), the Mexico City government has denied consistently that any such negotiations were taking place.
Thirdly, CONAGUA, the huge national water agency, is cancelling the renovation of water rights to smaller agricultural users, while granting concessions for enormous volumes to transnational mining and energy (thermoelectric and fracking) companies.
Finally, CONAGUA, and their allies in the Legislature (both houses are controlled by Enrique Peña Nieto's party) plan to override the broad-based citizen’s movement for new water law which would prevent private control and promote democratic decision making in watersheds and municipal systems, and instead pass their new General Water Law this November, to provide the guarantees that private investors are requiring.”
Clearly, the Panel’s commitment, not only to “inclusive and collaborative ways developing and managing water resources” but also “to the right to water,” would be at risk under this approach.
According to the World Bank, the Panel aims to “mobilize effective action […] to increase access to safe drinking water and adequate sanitation for all, and to improve the sustainable management of water and sanitation … (SDG 6), as well as to contribute to the achievement of the other SDGs that rely on the development and management of water resources.”
The Bank’s recognition that “achievement of most SDGs would rely on the development and management of water resources” is commendable. In fact, it would be impossible to achieve SDG 2 on ending poverty and achieving food security through sustainable agriculture without small holder food producers’ rights to freshwater, and political and policy support for agricultural practices that conserve water.
However, according to our partners, CONAGUA, the national water agency of Mexico is cancelling the renovation of water rights to smaller agricultural users. This experience raises questions about the commitment of Mexico, and the leadership of the HLPW to “the achievement of the other SDGs,” which the World Bank states is one of the aims of the HLPW itself. In addition, as we might infer from the information shared by our partners at Agua para Todos Agua para la Vida, Mexico, there are questions around transparency and accountability of the leadership, both in the case of Mexico and the HLPW itself.
To anticipate the direction the Panel might take, the “Special Advisor” to the Panel, Dr. Han Seung-soo played a pivotal role in the adoption of OECD declaration on Green Growth, and in its promotion as a global strategy for economic growth. (Critics have described “green growth” as a greenwashing of existing industrial practices.) As a founding chair (2007) of the high-level panel on water and disaster—co-moderated by the World Water Council (organizer of the triennial world water fora, that denied water as a human right) —his priority is likely to ensure that the “green growth” is not compromised, and that limited water resources are made available to support it.
It then remains our, i.e. the public’s, collective responsibility to ensure that the High-level Panel on Water does not promote green growth at the expense of a comprehensive, inclusive and collaborative approach to developing and managing water resources. Indeed, let’s hope that the HLPW is able to help bring a fundamental shift in the way the world looks at water, where fundamental human rights and environmental justice are kept at the center of that shift.