Posted August 28, 2013 by Jim Kleinschmit
Golden Rice’s recent re-emergence in the news reminded me of how long the biotech industry has been touting this “wonder” crop in order to gain approval for genetic modification more broadly. It appears we’re now seeing a similar tactic with the proposed introduction of genetically modified (GMO) American chestnut trees. Once stretching across the eastern part of the United States and memorialized in countless stories, songs and poems, few trees evoke more nostalgia for America’s past than the Chestnut. However, the American chestnut now mostly lingers in our memory, as the more than 4 billion trees—equaling around a quarter of all hardwoods in the Eastern seaboard—were almost completely wiped out when a disease swept through the country in the early 1900s.
Such emotional connections help to explain the fervor behind efforts to reintroduce this American icon, but also the latent danger in such work. One effort has utilized traditional breeding practices to create and introduce a new chestnut hybrid that is resistant to the blight. Until the last few years, the American Chestnut Foundation supported this effort before shifting to support a competing initiative, led by the College of Environmental Science and Forestry of the State University of New York in Syracuse, which takes the more controversial approach of genetic modification. The American Chestnut Research and Restoration Center, through transfer of genes native to wheat into the chestnut, has created a blight-resistant version of the American Chestnut, and is intending—with appropriate regulatory support—to introduce this version into the wild.
This is the first attempt that I’m aware of in the U.S. to introduce a GMO “wild” tree (several orchard fruit trees have already been approved by the USDA). Fear of the impacts on GMO trees on existing, native trees is the most significant, direct concern. However, for those of us who have lived through the GMO battles, we see something more sinister in this push for GMOs to rescue an American icon: like Golden Rice, this could be the “Trojan horse” for an industry-wide push for regulatory approval for a variety of GMO trees. Golden Rice, which has been genetically modified to include corn genes to produce vitamin A, was the first (and often only thing) mentioned by GMO advocates, who for years touted its ability to reduce hunger and disease. The development of the biotech sector over the last 10 years illustrates that the real focus of genetic modification has mostly been on creating commodity crops with herbicide resistance and incorporation of pesticides. Such an approach has generally been more to the benefit of the transnational corporations that sell many of those very same chemicals, rather than to the farmers who grow the crops or the consumers who eat them. Of course, we’re now seeing the long predicted problems with that singular focus: a significant increase in herbicide and pesticide resistance among the very weeds and pests that the GMOs were intended to stop, leading to more use of more toxic alternatives. Meanwhile, we’re still waiting on Golden Rice to reduce global hunger.
This bait-and-switch history around Golden Rice understandably comes to mind now with the GMO chestnut. While even scientists that are skeptical of GMOs acknowledge that the modification of the American chestnut to include a gene from the wheat plant may not be the most risky approach (compared to efforts to introduce insecticides into plants, for example), very real risks do exist both directly and indirectly in taking this new tree out of controlled labs and plots and into the natural environment. If one considers both our admittedly limited understanding of trees and how they interact and work, and how enormous the risk of contamination is for such long-lived species, a basic precautionary and responsible approach would be to exercise extreme caution and patience in introducing something so unknown into the wild where it is impossible to recall.
Other concerns exist about how the GMO chestnut is intended to be used and who is leading the effort. The fact that Duke Energy—the largest energy holding company in the U.S. and a major burner of coal from mountain-top removal mines (with all of the attendant environmental issues)—is a major funder of the GMO effort, based on the chestnut’s ability to be planted on “reclaimed” coal fields as well as its carbon sequestration potential, should give anyone pause. However, a deeper and very real corollary concern exists that the focus on the GMO chestnut is very intentionally tied to its historical and emotional role for Americans, and that regulatory approval for its introduction will also provide the needed precedent to the biotech industry to gain quicker approval for other, less broadly beneficial GMO tree species targeted at the paper, lumber and energy sectors.
In the end, just like with Golden Rice, there are much safer and proven alternatives to this high-risk and relatively low-reward GMO approach. As many critics pointed out in the early Golden Rice debates, native and more nutritious alternative crops and grains already exist that could meet the health needs that Golden Rice was supposedly created to address—what was needed was investment in traditional research and technical support efforts aimed at increasing the production and yields of these crops. Similarly, the blight-resistant chestnut developed by the American Chestnut Society appears to have solved the disease issue without the incumbent regulatory or contamination issues inherent to the GMO variety. At the very moment we’re seeing so many of the predicted problems with GMO agricultural crops emerging, why would we want to introduce a similar risk to our forests?
Posted August 20, 2013 by Rod Leonard
This piece is a guest feature from Rod Leonard, former IATP board member and special assistant to U.S. Department of Agriculture Secretary Orville Freeman.
One of the last acts of the Republican majority of the House of Representatives before the August recess of Congress was to propose to cut funding for the food stamp program by $40 billion in the fiscal 2014 budget. These cuts were proposed even after the U.S. Department of Agriculture reported that the inflation adjusted value of food stamps had declined seven percent between 2009 and 2011.
Whether the cruel and harshly punitive action offended the gods possessing larger powers of compassion and morality is not clear, but no one questions that nearly simultaneously the bottom fell out of commodity market prices for corn, soybeans and wheat. The question is whether the two developments in the agricultural economy are related, and whether the stability of the American farm economy may have been fractured, possibly permanently.
These facts are clear:
Before House Republicans decided to shear by half the program that keeps hunger from the door of nearly 48 million people in America, the cash price of corn was hovering near $7.50 a bushel, and briefly climbed above $8.00 a bushel in future markets. Ever since the Republicans sacrificed help for the hungry to appease the austerity gods, the cash price of corn has fallen to nearly $4.60 a bushel and remains below $5 a bushel. Assuming the cash price remains below $5 a bushel through the rest of 2013, the drop in the cash price represents a potential loss in future income for American corn growers of possibly more than $32 billion in 2013 and 2014 income.
When the potential drop in earnings for wheat and soybeans are included, the overall figure for the heartland of America and the American breadbasket may be a drop of well over $60 billion in potential earnings. Soybeans are down by 16 percent on the futures market since their peak earlier this year, losing $4.25 per bushel, while wheat has declined more than a dollar per bushel to less than $6.50. The actual potential loss could be smaller, depending on the number of farmers that hedged their crops, i.e., sold future harvests to speculators and dealers at market prices that prevailed before the bottom fell out.
This much is also clear: Farming in 2013 will not be as profitable as in 2012. In Minnesota, for example, farm income was 50 percent higher than in 2011. The rise in land values that has seen the price of cropland climb 20 percent in Minnesota—increasing from $4,050 to $4,800 an acre—in 2013, will likely fall back in 2014. Land prices historically have reflected anticipated crop prices. From an historic U.S. average of over $4,000 an acre, the price per acre of choice crop land reached in 2013 to over $12,000 in the cornbelt. But corn prices won't be high enough to pay the mortgages for that land, particularly, as the USDA reported, the costs of farming per acre climbed to a record high in 2012.
The impact of the failure to pass a coherent Farm Bill will not only be felt on the farm, but also throughout the rural economy, as land values decline. Over the past decade—likely to be remembered by many as the golden years of farming in the 21st century—farm debt levels have declined to near record lows reflecting strong balance sheets for most farms. Credit costs for rural borrowers are low.
The fall in the farm economy in 2013 either may be dismissed as a bump in the road or considered the beginning of a mortgage default cascade into depression in the rural economy. Preventing rural depression depends entirely on public policy, on the choices to be made in 2013 and 2014.
For example, the price of corn depends not only on the volume of exports the USDA needs to promote but also on the continued diversion of 40 percent of the corn crop into ethanol production. Without ethanol production, an increase in the yearly supply of corn by 40 percent could send corn prices to crushing low levels of less than $1 a bushel. Ethanol is less an energy program than a subsidy program for corn growers.
Industrial agriculture—i.e., corn, soybean, wheat, cotton and rice—desperately needs new farm legislation to authorize a new system of farm subsidies. A new Farm Bill would continue $20 billion in annual subsidies to industrial agriculture (mostly to fewer than 200,000 farmers) through government subsidies to private crop insurance. Current programs that pay farmers directly, and are rapidly losing public support, would end.
If the House GOP succeeds in its mission to punish nearly 48 million people who rely on the food stamp program (and the 15 million people eligible for the program that don't apply for food stamp benefits or choose to remain at risk of hunger), then farm and food programs, joined together in April 1964, also will end.
The union began when Secretary of Agriculture Orville Freeman finally pushed the Democratic majority of House of Representatives to approve by a narrow 30-vote margin legislation to adopt the statute creating a permanent food stamp program originally proposed in 1961 by President John F. Kennedy. That program is a far cry from the program that today ensures the right of every American adult to choose to protect themselves and their children from hunger. Freeman was intent on linking the capacity to feed a growing nation to a policy insuring that every person, regardless of income, is entitled to share in an abundantly productive agriculture. Within two weeks of the passage of the food stamp legislation, Freeman was able to convince an urban dominated Congress to adopt a Farm Bill establishing supply management as the new post-war policy for American agriculture. Agriculture could maintain remunerative prices for farmers despite a structural tendency to overproduce year after year.
The shape and dimensions of farm policy will continue to change as global agriculture and global demand for food and farm products change, but the central role of government policy is the same today as in 1862 when President Abraham Lincoln created USDA. The 1964 legislation joined farm and food policy at the hip, with food stamps the glue of American food and farm policy.
The effort of the House GOP to perform political surgery to remove food stamps can have only one predictably disastrous outcome: Food stamps will survive. An urban nation will not compel millions of its residents to accept a life dominated by hunger. But, if divorced from food stamps, farm programs, whose benefits largely are delivered to the largest 200,000 farm operations, likely will perish in the ideological bonfire that is the GOP Farm Bill. The political conflagration will inevitably include rural America as well.
Simply put, no food stamps, no farm program.
Posted August 16, 2013 by Andrew Ranallo
As a new policy on the Think Forward blog, we are going to set aside an occasional post to welcome and introduce new staffers to our readers—welcoming them to the organization and highlighting the work they’re taking on in helping further our mission for fair and sustainable food, farm and trade systems.
Over the late spring and summer, IATP has welcomed a group of new staffers in various roles and we’re excited to have them on board as start breaking ground on new work. Their help has already proved invaluable.
Kristen Frank, our new administrative assistant, is the new face of IATP, the voice on the phone, the person at the front desk, a greeter at events, and the one who keeps everyone and everything on the first floor organized.
Yohannes Ghebru is our new finance assistant, in charge of accounts payable and receivable, payroll, and benefits management. In his first few months he has been acquainting himself with IATP’s new accounting software and learning all the ins and outs of the benefits package.
Rachel Grewell is a program assistant working with the Healthy Legacy coalition on Minnesota chemical policy reform and on IATP’s Great Lakes Restoration Initiative, both supporting the production and use of everyday products without toxic chemicals.
Catherine Reagan has joined as a program assistant involved in many and varied pieces of IATP’s current work—one day sorting out Working Landscapes data, the next delivering Minnesota Grown directories to childcare providers throughout the Metro area, the next diving into research about locally grown and processed grains and pulses.
Tara Ritter has joined as a program associate for climate and agriculture. Her first months have been spent compiling resources on rural climate issues, working on advanced biofuels, and updating a paper on agroecological farming practices and their ability to mitigate climate change.
Posted August 16, 2013 by Jim Kleinschmit
Farmers and the insurance industry have one thing in common: they are both on the front lines of climate change. So far, the U.S. insurance industry has been slow to respond to climate induced risk and is well behind its European counterparts who are outspoken leaders for climate action.
In a small sign of progress last month, Minnesota announced that it will join four other states in requiring its insurance companies to report on climate risk. The companies will have to respond to a survey put together by the National Association of Insurance Commissioners that asks how the industry is reducing its own greenhouse gas emissions, altering its investment strategies, or encouraging policyholders to adapt to new climactic conditions (thus decrease reporting company losses).
Minnesota Insurance Commissioner Mike Rothman should be applauded. When IATP met with the insurance commissioner’s staff last year, we encouraged the state to require climate-related reporting of insurers. We were surprised when they told us we were the first to ask them to do such reporting, or indeed, to ask about the climate risk of Minnesota companies. Maybe insurance commissioners in the other 45 states also just need to be asked in order to act.
The social costs of climate change in the U.S. are staggering and difficult to truly assess. A 2008 analysis by Ackerman and Stanton conservatively forecasts U.S. business as usual policies on climate to cost $271 billion by 2025 for repair of hurricane and flooding real estate damage, and energy provision and water provision to increasingly drought stricken areas in the United States. By 2100, the cost to the U.S. economy of the current business as usual policies would likely rise to $1.9 trillion annually, absent a major change in how the government and businesses adapt to climate change and reduce greenhouse gases.
One segment of the industry where we’re already seeing rising payouts is crop insurance. Last year’s drought is expected to result in a record $16 billion in crop insurance payouts. An IATP report last year called on Congress to invest in conservation programs in the next Farm Bill to aid farmers in building climate resilience on the farm, and ultimately to reduce crop insurance payouts in the future. USDA is trying to respond to increased climate risk, based on its own sobering analysis of the risks to agriculture, including creating some new “climate hubs” for direct research on expected impacts of climate change on the sector. Unfortunately, Congress has not yet agreed to treat climate change as seriously as either USDA or the Minnesota Insurance Commissioner.
Responding to a survey about climate change is a good first step to require of the insurance industry. According to CERES, an association that advocates for more sustainable business practices, only 23 of 184 U.S. insurers have comprehensive climate strategies; more than half of those are foreign-owned.
Sure, an industry that exists specifically to reduce risk can and must do more to acknowledge the reality of the problem. Incentivizing climate resiliency with their clients and advocating for strong climate policy that reduces emissions and supports needed adaptation measures are some first steps. If insurance companies cannot induce their corporate clients to reduce their climate-risk exposure, climate change feedback loops governing drought, sea rise levels, ocean acidification, etc., will become unpredictable. As a result, the actuarial tables used to calculate climate-related insurance premiums could become unreliable to the point where companies will not write insurance policies without huge taxpayer guarantees. At that point, we may look back nostalgically to the time when crop insurers paid out a mere $16 billion to cover crop losses.
Posted August 15, 2013 by Jim Harkness
Proceeding from the commonsense notion (and economic principle) that in a free market, buyers should have access to sufficient information to make educated choices, the law required retailers to tell customers the country of origin of a variety of foods, including meat, fruits, vegetables and nuts. I might not know where all the pieces of my cell phone were made—and there are serious issues with that—but I don't plan to eat my phone. Why shouldn’t I be able to know where my food comes from?
The big meat companies have objected the loudest to COOL. Canadian and Mexican meat groups took the U.S. to court at the World Trade Organization (WTO) when the USDA first announced its regulations for implementing COOL, charging that the rules would discriminate against them, and they won. To the Obama Administration’s credit, they issued a revised rule that actually strengthened COOL, requiring more detail about where an animal was born, raised and slaughtered. The current suit is intended to block the revised regulations that were issued this spring in response to the WTO ruling.
Big Meat’s argument? The law violates their right to free speech, by compelling them to provide information that they would not provide voluntarily. This is the same argument a coalition of tobacco companies used when they sued to block enhanced warning label requirements on cigarette packages. The Supreme Court has traditionally made a distinction between political speech, which is strictly protected by the Constitution, and commercial speech, (intended to “propose a commercial transaction”) but as the Court has become more and more friendly to their interests, corporations are getting increasingly aggressive in asserting their new-found rights. And the right to keep us in the dark is among them. Big Meat wants us to believe, as their legal complaint states, that “beef is beef, whether the steer or heifer was born in Montana, Manitoba, or Mazatlán. The same goes for hogs, chickens, and other livestock.”
Whether or not this absurd argument holds up in court, (the first hearing will be August 27) it’s not the only legal tactic Big Meat could borrow from Big Tobacco. Two massive international trade and investment agreements currently under negotiation would grant corporations something that might best be termed the Right to Profit. The Investor-State Dispute Resolution (ISDR) mechanism grants corporations the right to sue national governments in a private trade court for any government action that interferes with the investor’s expected profits. ISDR has already been built into a number of bilateral agreements, so we know what it means in practice. Perhaps most relevant to food labeling is the case of Phillip Morris v. Uruguay. In 2010, the tobacco giant used ISDR to bring a $2 billion suit against the government of Uruguay for enacting new regulations that would require prominent health warnings on cigarette packs. This particular case has not been decided yet, but in 2012, the plaintiffs won 70 percent of such ISDR cases.
Time and time again trade rules strengthen the hand of multinational corporations at the expense of the rest of us. The implications for food labeling could not be clearer. More and more people around the world are demanding their right to know about what they’re eating—whether through labeling GMOs and other ingredients, COOL or other labeling schemes. We need to let Congress and the President know that trade rules and laws must reflect the public interest, not the right of secrecy for big corporations.
Posted August 15, 2013 by Andrew Ranallo
As two of the largest free trade agreements (TTIP and TPP) in history are being negotiated, free trade agreements like these will become more entrenched in our lives than ever before. Unfortunately, the tangle of rules and regulations—mostly design to keep intact and strengthen corporate interests—can create serious roadblocks for real, earnest work to improve sustainability on the national, state and even local levels. Yes, as local governments work to build policy that includes sustainability standards, they may be on the wrong side of international trade law.
A new IATP report, Sustainability Criteria, Biofuel Policy and Trade Rules makes very clear that if we hope to change policy in any arena—pushing for lower GHG emissions, reducing pollution, producing cleaner energy, or enabling local sourcing—understanding international trade law is an absolutely required first step.
Report author and trade lawyer Eric Gillman uses the state of biofuels policy as a backdrop—including real examples of current biofuel sustainability efforts—to set the stage for examining the larger implications of WTO trade law on all sorts of policy development:
If we are to construct the type of policies needed to address the multiple environmental, social and economic crises that we face, understanding how these policies interact with international trade rules is absolutely required. This paper is a ﬁrst attempt—within the context of biofuel policy—to raise some of these questions and address necessary changes.
Download IATP’s new report, Sustainability Criteria, Biofuel Policy and Trade Rules.
Posted August 9, 2013 by Anna Claussen
Farmfest is the largest farm show in Minnesota, bringing farmers together to talk about and see the latest in tractors, seeds, and other farm-related equipment. But Farmfest also brings out the politicians to talk about what is happening with agricultural policies and markets. With no farm bill in place, the question understandably on everyone’s minds at this year’s policy panel was “What’s next?” While the policymakers in attendance did a pretty good job of explaining how we got where we are today, the future of farm policy was left unclear.
Representatives Colin Peterson and Tim Walz, both of whom are on the House Agricultural Committee and participated in the policy discussion, gave their perspectives on why Congress still hasn’t passed a Farm Bill. Peterson and Walz pointed to the relatively speedy and nonpartisan work of the House and Senate agricultural committees, as well as the ongoing support of both parties’ leadership; they made clear that the fault didn’t lie there. Instead, the blame was leveled squarely at Eric Cantor and his fellow right-wing Republicans, who broke with their party’s leadership and scuttled the deal that the agricultural committee had developed. Both representatives were quite pessimistic of the possibility of passing a Farm Bill in the remaining months of 2013; Representative Peterson suggested that a 2-year extension was the most likely outcome, followed by many questions about whether we would actually have a Farm Bill (as we know it today) ever again.
While Peterson and Walz reminded the audience that agricultural policy has mostly been able to avoid such partisan battles until now, the ongoing stalemate over the Farm Bill and nutrition programs makes clear that even this sector is no longer exempt. The threat of removing the nutrition programs from the Farm Bill was identified by politicians and farmers to be a death sentence for any future Farm Bill legislation. Others recognized the split as potentially contributing to the growing perspective that agriculture is a special interest. Dale Moore with the American Farm Bureau reminded Farmfest attendees that the nutrition program is an integral part of the Farm Bill and should remain—not solely for political leverage with our urban legislators, or because it is our moral obligation to put food on the table for those less fortunate, but because 23 cents of each dollar go back to farmers.
Despite the grave circumstances of what many panelists agreed to be one of the strangest Farm Bill processes ever seen, Representative Walz did speak with optimism and conviction that we can come up with policy that is "viscerally smart, that keeps to our moral values and that creates prosperity for our community by coming together." While most of the discussion was about the details and missteps in the policy work, Walz did volunteer what he saw as the more basic cause of the failure of this policy and many others. He suggested that the real source of the disfunction in Congress was redistricting. Led by state legislatures, there has been a widespread redrawing of House districts in recent years that has resulted in many overly partisan and “secure” districts. Such politically homogeneous electorates—whether on the right or on the left—do not, from Representative Walz’s perspective, provide the right environment from which politicians can emerge who understand and respect the role of compromise in politics and policy. As a result, we have politicians who authentically represent their districts in their overt unwillingness to negotiate or understand alternative positions to their own. Representative Waltz urged the crowd to crank up the heat on legislators who are unwilling to understand that “compromise is not a capitulation of your values, it’s the glue that holds the democracy together." Quoting Ronald Reagan, Walz continued, “if they can’t see that light, at least make them feel the heat,” and urged Farmfest attendees to put pressure on legislators to pass a Farm Bill to give the American people the certainty they deserve.
Bob Worth, Vice President of the Soybean Growers Association, said that it is really the next generation of farmers who have the most to lose with no Farm Bill in place. Our beginner farmers don’t have the equity—they need the safety nets, the certainty and the support programs. Too many in Congress, according to Dale Moore, fail to understand that we don’t write Farm Bills for the good times, Farm Bills are for the bad times. In the midst of'good times for agriculture—at this 32nd annual Farmfest, boasting a record 600-plus exhibitors—Moore's point hopefully served as a subtle and timely reminder. While we get rightly frustrated with the long-delayed and politically divisive Farm Bill process, it is important to recognize the important role this piece of legislation plays. At its best, farm policy could help create a diverse agricultural economy that generates public goods and services through integrated programs for conservation and production, build resiliency in agriculture and strenghen the safety net we need for a reliable, safe and accessible food system.
Posted August 8, 2013 by Andrew Ranallo
Ask anyone who's been working on policy-change or advocacy efforts in any arena long enough and they’ll tell you: Change takes time. Except in very rare cases, big, noticeable shifts take years—often decades—of work by countless people, working on all levels and in different ways to achieve change. On one hand, this glacial pace makes sense. After all, it took years to get where we are—a climate on the fritz, food for some while others go hungry, a financial system that is more akin to an online casino—why should getting somewhere else be any quicker? On the other hand, if we aren’t able to think big about the changes we want, and get caught up in little victories, we risk losing sight of our real goals.
It is in this spirit that Oxfam held an online discussion last year calling on experts from across the food and development policy world to write a series of essays focused on four “big picture” questions:
IATP’s Sophia Murphy was invited to submit one of 23 essays that formed the basis of the spirited, online debate about what was possible. Murphy's essay, “Risky Business”, focuses on opportunities for risk-management that could change the face of agriculture and the food system.
"Farmers need strong risk insurance programs to have the confidence to invest in what they do," she writes. "Without investment, agriculture stagnates, and so does food production. With investment agriculture can grow the food the world needs, rural economies thrive, and rural–urban migration slows." She goes on to discuss what farmers, the government and the private sector each can contribute, underlining the importance of procuring and holding public stocks to counter food price volatility.
Posted August 7, 2013 by Dr. Steve Suppan
The launch of the Transatlantic Trade and Investment Partnership (TTIP) negotiations presents a new challenge to commodity and financial market reform. Those reforms, codified in the U.S. in rules authorized by the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act of 2010, are intended to prevent a reoccurrence of the big bank bankruptcies that were avoided only by the nearly $30 trillion bailout of mostly U.S. and European financial institutions from 2007 to 2010. The U.S. Department of Treasury has announced its opposition to the inclusion of financial services in the TTIP. However, according to Inside U.S. Trade (subscription required), the Office of the U.S. Trade Representative (USTR) said that it was evaluating the benefits of including financial services, and U.S. Trade Representative Michael Froman said that financial services would be included.
IATP has been working with organizations on both sides of the Atlantic on the contentious negotiations to apply rules authorized by the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act of 2010 to the foreign affiliates of U.S. financial institutions. A July 11 communique by the European Commission and the U.S. Commodity Futures Trading Commission outlined a “Path Forward” to transatlantic financial regulatory harmonization and cooperation. No mention was made there of the TTIP, but EC Commissioner Michel Barnier has insisted that the TTIP must include a financial services chapter and that “discriminatory” financial and commodity market regulations must be part of the negotiation.
One of the objections to the inclusion of financial services is that under a proposed “investor-state” dispute settlement chapter in the TTIP, disputes about the implementation and enforcement of non-discriminatory rules could be launched by private investors against the U.S. and the 28 European Union member states. The Corporate Europe Observatory has called the “investor state” provisions (a feature of NAFTA and other trade and investment agreements that empowers investors to sue governments for actions that undermine their expected profits), “a transatlantic corporate bill of rights.” A U.N. Conference on Trade and Development Conference (UNCTAD) briefing note in May reports that investors prevailed in 70 percent of 42 investor-state lawsuits in 2012. Occidental Petroleum won the highest award, about $1.77 billion against the government of Ecuador. The political and financial pressures created by the inclusion of financial regulation in a TTIP investor-state provision could lead to a lethal synergy that severely undermines the ongoing reforms.
Econometric projections of total annual benefits attributed to TTIP after 2025 are estimated to be about $95 billion annually for the U.S. economy. However, the General Accountability Office (GAO) has estimated the cost to the U.S. economy of the 2008-09 financial services default cascade to be about $13 trillion. The gross notional value of financial and commodity derivative contracts reported to the Office of the Comptroller of Currency for the first quarter of 2013 was $231 trillion. Using TTIP’s negotiating trade-offs among all economic sectors to advance new forms of financial regulatory exemptions and deregulation, under threat of investor state lawsuits, could make both U.S. and European economies vulnerable to the same opaque and dangerous investment instruments that created the 2009 financial meltdown.
For more on derivatives reforms, see A long and winding road to global derivatives market reform.
Posted August 1, 2013 by Dale Wiehoff
Earlier this week, Andrew Pollack reported in the New York Times that biotech companies like Monsanto, Dupont and Dow Chemical announced through an industry association that they would be more transparent with the public about the chemicals and genetically modified seeds they sell. According to Cathleen Enright, executive vice president at the Council for Biotechnology Information (BIO), “We have not done a very good job communicating about GMOs. We want to get into the conversation.”
To move that conversation along, they’ve opened a new web site, GMOAnswers.com. Any move toward greater transparency from companies who have spent decades suing farmers, spending millions to prevent the labeling of food containing GMOs, hiring private security firms to break into their critics offices and steal information—not to mention generally bullying anybody who questions the safety and value of their products—should be good news. But like with most news from chemical and seed companies, it is another reason to worry that the public will be misled and the issues will be futher obfuscated.
At the same time big biotech shows its sensitive side by answering difficult questions, they are moving in lockstep to ensure that the EU-U.S. free trade agreement, the TTIP, will protect their ability to sell their biotech products without regard to local or national labeling and safety standards. In comments on TTIP submitted by BIO to the U.S. Trade Representative (USTR), the focus is on getting trade negotiators to harmonize the standards between the EU and U.S. on the very issues of transparency and protecting markets. Harmonization is a trade term of art that often indicates that strong regulations and protections are going to be taken down to the lowest common denominator.
IATP recently released portions of the EU’s initial goals on regulatory harmonization. In her introduction, IATP’s Karen Hansen Kuhn says, “Consistent multilateral rules on difficult issues make sense, but let’s make sure trade is put in its place. Rules that provide for a safe workplace, protect public health and the environment, and promote energy and food security have been lost in trade agreements of the past.”
The very fact that the TTIP is being negotiated in secret should be warning enough that something shady is about to take place. Many groups (including IATP) have submitted comments, but so far it’s been a one-way conversation. The only people who really know what’s being negotiated are the trade officials and the security cleared trade advisors (including BIO, which sits on the intellectual property rights committee). When we read through the BIO comments on the trade treaty, there are numerous references recommending that the negotiators look to the U.S. Food and Drug Administration to bring the EU and U.S. biotech standard in line. It isn’t surprising: Chris Parker, in his expose of Monsanto in the Village Voice, reminds us that Michael Taylor (former vice president of public policy at Monsanto) was named by President Obama as deputy commissioner for foods and veterinary medicine at the Food and Drug Administration.
If BIO and the trade officials want to be part of the “conversation” on GMOs, they need to be upfront about what’s really on the table in TTIP (as well as the massive Trans Pacific Partnership). Farmers and consumers need to be part of a real debate about how these proprietary technologies affect the environment, economy, health and culture.