Posted July 25, 2014 by Dr. Steve Suppan
Trade policy negotiations, such as those for the Transatlantic Trade and Investment Partnership (TTIP), are conducted largely as if they were private business deals. Despite many public interest issues that are subject to “least trade-restrictive” criteria in the TTIP and other so-called Free Trade Agreements, access to draft negotiating texts is restricted to negotiators and their security-cleared advisors, overwhelmingly corporate lobbyists. About 85 percent of 566 advisors to the U.S. Trade Representative (USTR) come from various industry sectors.
Trade negotiations texts are exempted from public disclosure otherwise required under the U.S. Freedom of Information Act by presidential Executive Order 13526, which can be rescinded by President Barack Obama. U.S. NGOs, including IATP, have repeatedly urged the USTR to end trade policy transparency exemptions. IATP was among 250 non-governmental organizations to sign a May 19 letter to the EC’s director of trade demanding the EC release for public comment draft negotiating texts and related documents.
Consultations and “listening sessions,” held by the USTR and the European Commission (EC), offer a very occasional opportunity for public comment on the general issues under negotiation, not on draft negotiating texts. The great majority of EC trade negotiator meetings with “stakeholders” are with industry representatives, 92 percent according to a July 8 Corporate Europe Observatory analysis. Agri-business representatives meet most frequently with EC officials.
Assurances by negotiators that TTIP will not reduce food safety, animal health, plant health or environment regulatory protections have not allayed public concern that the negotiating texts will lead to a weakening of those protections. Partly because the texts remain restricted to negotiators and their corporate advisors, the concern has grown to anxiety. Indeed, as my analysis of an IATP leaked EC draft proposal for a TTIP chapter on trade related Sanitary and Phytosanitary (SPS) issues reports, the U.S. Food and Drug Administration (FDA) is likewise anxious about the terms of the leaked chapter.
The FDA reportedly is trying to remove the SPS regulatory cooperation and standards harmonization provisions from the draft leaked chapter. It is not fanciful to think that the FDA shares public concern that the numerous “least trade restrictive” provisos in the draft EC proposed SPS chapter will prevail over specific FDA regulations to protect consumer health, animal health and plant health.
It is important not to overstate what we now know on the basis of the draft SPS chapter, and not only because it is just a draft, and not only because it is a text proposed by the EC and not a joint EC/USTR draft. The draft refers to nine annexes, yet to be agreed, that have not been leaked and that are crucial to the content of the chapter and any eventual implementation of it.
Among the issues referred to in the annexes are TTIP administrative matters, specific animal diseases about which TTIP member governments may request “additional guarantees” of disease health status prior to import, guidelines for checking paperwork on import consignments, and rules for auditing the certification of food processing and distribution facilities as qualified to export or import.
The EC proposed chapter poses some challenges for U.S. negotiators, food processors and agribusiness companies. Article 4 requires that TTIP member governments “shall avail themselves of the necessary resources to effectively implement this Chapter.” But the Republican-controlled House of Representatives has rejected Obama administration budget proposals to implement the Food Safety Modernization Act (FSMA), signed by President Obama in January 2011. Furthermore, the food processing industry, led by the Grocery Manufacturers Association, has repeatedly refused to pay for a food facilities inspection fee. Currently, the U.S. could not comply with Article 4 because it can neither “avail” itself of public or private resources sufficient to “effectively implement” the chapter.
Facilities inspection and certification is a core element of the TTIP approach to import food safety. According to the draft text, recognition of SPS systems as “equivalent” by TTIP member governments will occur “without a need for individual re-inspection [of products] or other additional guarantees” (Article 9, paragraph 1) (emphasis added). Because SPS equivalence can be granted in the absence of any evidence of port of entry food product inspection and testing, verification of equivalence by facilities inspection and certification is what stands legally between the consumer and contaminated food. The FDA port of entry inspection rates is a small fraction of that mandated under EU law, so relying on food facilities inspection as the last line of defense from food product contamination will put EU consumers in a buyer beware situation.
But what is the food safety value of a food facilities inspection and certification program that is not funded sufficiently to be implemented and enforced? The anti-tax dogma both in the U.S. food industry and the Republican Party majority in the House of Representatives could make Article 4 on implementation resources a paper tiger. Would failure to fund FDA and other agencies with food safety, animal health and plant health obligations constitute a violation of this provision on effective implementation, presumably including enforcement, of the terms of the draft chapter? What would the penalty be for such a violation, particularly if failure to enforce resulted in a TTIP mediated foodborne illness outbreak? The TTIP draft text does not give an indication of how governments would respond to such questions.
Unfortunately for consumers, the terms of the draft chapter do not mention specific concerns, such as the non-therapeutic abuse of antibiotics in animal feed; the use of chemical rinses to disinfect poultry exports that are inspected at very high speed by poultry plant employees; or the mandatory labeling of food products containing genetically modified organisms. Trade policy language renders such concrete concerns into abstract language that is often opaque.
TTIP Parties must ensure that SPS “measures” (laws, regulations, implementation measures, even court rulings) provide the “appropriate level of protection” for human, animal and plant health, as determined by governments. However, Parties must be able to demonstrate “objectively” that such measures are “necessary” to achieve the “appropriate level of protection” and yet also be “least trade-restrictive.” These requirements place a very steep burden of proof on prospective TTIP government regulators, who already are under constant lobby pressure and the pressure of corporate-sponsored science subject to Confidential Business Claims (i.e., “sound science”) that impede peer-reviewed scientific review.
The leaking and analysis of a draft and incomplete TTIP chapter, as proposed by one TTIP Party, is only the beginning of one public interest initiative to open up the TTIP negotiating process to substantive public dialogue. The opportunity for the non-corporate public to influence the terms of the trade policy that affects their lives begins with timely and full disclosure of the draft negotiating texts and preparatory documents.
It is crucial for democracies to take advantage of such opportunities before the final TTIP agreement is presented as a done deal to legislatures for a yes or no vote with no possibility of amendment, as has been the case for past U.S. trade agreements under Trade Promotion Authority. The importance of timely debate about draft negotiations texts is all the greater when one considers that under the Investor State Dispute Settlement proposed for TTIP, a private tribunal of three trade lawyers could overturn domestic laws, including SPS measures that the tribunal determined to conflict with TTIP obligations to U.S. and EU investors. If governments continue to withhold draft negotiating texts from the public, then analysis of leaked drafts is one means to protect some measure of democracy in trade policy.
Posted July 22, 2014 by ARC2020
An interesting window of opportunity for legislators dialogue between the USA and the European Union opened last week in Strasbourg, during the plenary session of the European Parliament, when Sharon Anglin Treat, from the House of Representatives of the US State of Maine, met Members of Parliament (MEPs) from various Committees and political groups in order to exchange views on the impact of on-going negotiations on a free trade agreement between the United States and Europe (TTIP) with regard to food, agriculture, environment and related issues.
Rep. Treat co-chairs the Citizen Trade Policy Commission, which advises the Maine Legislature and Governor on trade policy, and also is a member of the Intergovernmental Policy Advisory Committee (IGPAC) in the office of US Trade Representative Froman.
Representative Treat spoke about the very lively public debate among all stakeholders in her State of Maine and the growing awareness she has noticed about how TTIP could affect policies enacted or under consideration in Maine and other US states, particularly policies supporting small and organic farms, requiring GMO labelling, and regulating pesticides and chemicals in consumer products. She discussed the interest of other state legislators across the US who share these concerns and have joined together to draft letters and pass resolutions on trade agreements including TTIP.
Some of the fields being negotiated in TTIP that Rep. Treat discussed included technical barriers to trade, so-called harmonizing rules or “regulatory coherence,” and procurement rules, all of which could have an impact on farming and food systems. She drew attention to concepts like “localization barriers to trade” which she qualified as a threat to the growing local food movements on both sides of the Atlantic trying to build closer ties between farmers and consumers and to offer fair income and reasonable food prices on both sides of the food chain.
MEPs from the majority groups of the EP, the conservative European Peoples Party and Socialists and Democrats, as well as Greens, Regionalists and the European Left showed interest in establishing closer ties between legislators from State and regional levels, so as to clarify for their constituencies which effects a free trade agreement would have in their rural and urban communities, their food systems and the quality of food. With the EU and the US trade representatives negotiating a number of trade agreements in parallel, such as the Transpacific trade partnership, MERCOSUR/EU, etc. legislators were keen to learn from experience with existing trade agreements like NAFTA. And they were keen to draw public attention to consequences of agreements on certain commercial standards such as “codex alimentarius” or the confrontation between the “precautionary principle” applied in the EU, and “sound science” being favoured by US corporations which would favour trade companies rather than improve quality of food production schemes.
Much concern was raised about transparency of the negotiation process and the influence Parliaments on all levels would have on the outcome. The fact that fast track in the US and the consent procedure in Europe would reduce legislators to a blunt yes or no to a final deal was strongly criticized.
MEPs present at the meeting expressed strong interest in establishing a more structured transatlantic dialogue which should include legislators and possibly involve experts and civil society so as to increase understanding and participation in the process. Rep. Treat noted that there are many areas of mutual concern among parliamentarians in the US and the EU, and offered help to involve legislators from various levels in the US in future transatlantic exchanges, and thanked MEPs and the initiating civil society networks of the meeting, IATP in the U.S. and ARC2020 in for their support.
Posted July 17, 2014 by Andrew Ranallo
Last month, President Obama issued a memorandum to create a national strategy to promote pollinator health. The strategy includes creating a pollinator health task force and taking steps to increase and improve pollinator habitat. The fact that pollinator decline is starting to be addressed at the Federal level signals increasing recognition of the severity of this problem. Nearly one out of every three mouthfuls of food we eat relies on a pollinator, and without the bees, butterflies, moths, flies, bats and other pollinators, the world food supply will become increasingly unstable.
The two largest threats to pollinators are habitat loss and pesticide use. Of particular concern are neonicotinoids, an increasingly popular kind of insecticide that control a wide variety of insects. The most common way that neonicotinoids are applied is as a seed coating. This means that the pesticide is on the seed before it’s even planted, and it travels through the plant’s vascular system as it grows. This transports the pesticide throughout all parts of the plant, including leaves, stems, flowers, fruit, pollen and nectar.
Over 94 percent of the corn and half of the soy planted in the United States is pretreated with neonicotinoids. As a result, many farmers are not even aware that they are using neonicotinoids. Awareness of the problem is growing however, especially in parts of Europe, where they have been banned. Non-neonicotinoid treated seeds are available in the U.S. too, but they need to be specifically sought out and can be hard to find.
In response to this problem, IATP has authored a Farmer and Landowner Guide to Pollinators and Neonicotinoids in collaboration with Pesticide Action Network. This guide provides landowners basic information on the science around neonicotinoids and pollinators, as well as information on pollinator friendly approaches that landowners can undertake to help right now. On-the-ground action can, and must, come immediately if we want to ensure the stability of pollinator populations and crops.
Posted July 17, 2014 by Pete Huff
This week, organizations and individuals around the country are coming together to tell Walgreen’s—the largest drug retailing company in the United States—to eliminate products containing toxic chemicals from their shelves. Led by the Safer Chemicals, Healthy Families coalition (of which IATP is a part), the July 17 “Instagram Day of Action” is asking the company to join the Mind the Store campaign and, by doing so, agree to create an action plan to reduce and eliminate the Hazardous 100+ toxic chemicals from their supply chain. Customers will share their messages with Walgreen’s via social media to create a less toxic world.
Fantastic, right? But what do the shelves of Walgreen’s have to do with food and agriculture? Answer: Eliminating toxic chemicals from consumer products, such as phthalates in children’s toys, reduces the amount of toxic chemicals that enter our agricultural system and, thus, the food that ends up on our dinner plates.
Despite the fact that organic food sales in the United States have increased from $11 billion on 2004 to an estimated $27 billion in 2013, consumers—particularly low income communities—are still exposed to a variety of toxic chemicals through their food. While the direct use of agricultural chemicals and food additives pose known threats to human health, certain toxins, such as those on the Hazardous 100+ list, find their way to our plate in indirect ways.
A majority of organic and non-organic foods—regardless of the chemicals used in the production of their single or multiple ingredients—are processed, transported and distributed through system filled with hazardous chemicals that pay little heed to the boundaries between industrial and agricultural systems, let alone organic standards. Despite consumer information and limited government action to eliminate points of direct exposure to such chemicals, researchers are finding that the levels of indirect exposure to toxins through the food chain have not significantly decreased.
Last week, the Washington Post published an article on the findings of a team of researchers studying phthalates in a variety of diets, including infants. Phthalates, according to the Mind the Store campaign, are chemicals linked to low testosterone, birth defects and cancer that are used to soften vinyl plastic and can be found in products like school supplies and flooring. The article notes that the “study shows that an infant with a typical diet is still consuming twice as much of the chemicals as the Environmental Protection Agency considers safe.” Meat and dairy and other foods that have higher levels of fat accumulate higher levels of the bioaccumulative chemical.
These findings reinforce the fact that addressing toxic chemicals in the food chain—itself a complex set of relationships - must be done holistically to mitigate both direct and indirect exposure, rather than linear approaches that simply focus on direct exposure. Phthalates were banned in certain consumer products, particularly children’s products, when Congress passed the Consumer Product Safety Improvement Act (CPSIA). This measure broadly banned the chemical from children’s toys that can be placed in the mouth and other products with high concentrations of the chemical.
However, Congress failed to take action on the presence of phthalates in broader ecosystems that support agricultural production, nor the products that are part of the associated food system. Given their tendency to bioaccumulate in fat, it’s not a surprise that the phthalates present in chicken feed, plastic tubing used in dairy operations and food packaging result in high phthalate exposure, even for infants wielding phthalate free toys. These indirect exposures require a more comprehensive management plan.
Phthalates are just one of the Hazardous 100+ toxic chemicals targeted by the Mind the Store campaign and this week’s push to have Walgreen’s remove these chemicals from their shelves is a fight that the food and agriculture community must show up for. By achieving this and other similar efforts in agriculture and food system, all people are less likely to have toxic chemicals as part of the dinner menu.
To sign the petition for Walgreen’s to join the Mind the Store Campaign, visit: http://saferchemicals.org/2013/05/14/why-are-we-asking-retailers-to-mind-the-store/. You can share your thoughts with Walgreen’s on Facebook (https://www.facebook.com/Walgreens), Twitter (@Walgreens) and Instagram (http://instagram.com/walgreens).
Posted July 17, 2014 by Erin McKee VanSlooten
Teaching children about food and where it comes from is an important part of many childcare programs, but many childcare facilities want to go a step further and build a Farm to Childcare program that connects local farmers with young children by providing fresh, healthy foods in childcare meals.
In response, IATP has just published a ready-to-use Farm to Childcare Curriculum developed in partnership with childcare provider company New Horizon Academy (NHA); and a complementary Farm to Childcare: Highlights and Lessons Learned Report that tells the story of using that curriculum to start a comprehensive Farm to Childcare program currently operating at 62 NHA childcare centers throughout Minnesota.
The Farm to Childcare Curriculum Package contains information on designing a Farm to Childcare menu and implementation schedule, recommendations on how to highlight local farmers to make the connection real for children, detailed examples of family engagement strategies and extensive experiential learning activity suggestions to incorporate Farm to Childcare themes into Circle Time, Math and Science, Sensory and Dramatic Play, Arts and conversations at mealtime. It also includes resource recommendations for further ideas.
Farm to Childcare: Highlights and Lessons Learned Report acts as an “everything you want to know” guide, sharing the story of our experience implementing Farm to Childcare—including both the successes and missteps—with the hope that it might provide some helpful insight and tools for other organizations wishing to start or expand their own Farm to Childcare initiatives. Inside, you will find a description of our experience developing partnerships, the timetable for our program, our approach for designing the pilot Farm to Childcare program, the tools we developed, the locally grown foods used in our pilot, sample menus, parent outreach strategies and more. Throughout this material, we share “what we did” and then “what we learned.” We also conducted an extensive evaluation of the pilot, and share our tools and lessons from that experience.
This summer IATP is building on our previous experience as part of a new Farm to Head Start pilot program. Working in partnership with the CAPRW Head Start program in St. Paul and the Hmong American Farmers Association who farm in Dakota County, we are adapting our curriculum to fit Head Start educational standards and expanding these resources to include content that is culturally responsive to the Hmong community. More on this project in the coming months!
We have made both of our new Farm to Childcare resources available at www.iatp.org/farmtochildcare.
This work is supported in part by the Center for Prevention at Blue Cross and Blue Shield of Minnesota.
Posted July 16, 2014 by Karen Hansen-Kuhn
Trade agreements are negotiated in a top down process: negotiators cut secret deals and then push for approval. These trade deals set rules on investment by corporations and banks, and lowering standards and regulations to the “least trade restrictive” possible. Local decision-makers are then left to figure out exactly what these rules mean for their state or community programs to build local economies, protect the environment or promote public health, or face challenges in special trade courts. This problem, and the fact that trade talks are held in secret until the completed deal is dropped on lawmakers’ desks, is a huge point of tension in the public debate on the Transatlantic Trade and Investment Partnership (TTIP) and Trans Pacific Partnership (TPP), as well as the continuing debate on fast track authority, which would restrict Congressional input to an up or down vote.
The Maine Citizen Trade Policy Commission (CTPC) takes a proactive approach to this dilemma. The CTPC, made up of state representatives and senators, along with representatives of important state agencies and civil society, holds public hearings and weighs in with the U.S. Trade Representative on issues of concern to local citizens. Under Maine law, the commission is mandated to “conduct an assessment of the impacts of international trade agreements on Maine’s state laws, municipal laws, working conditions and business environment.”
This year, the CTPC asked IATP and the Maine Farmland Trust to look into the potential impacts of TTIP on Maine agriculture and food systems. Tariffs between the U.S. and EU are already quite low. The real focus of agriculture in the trade talks are “behind the border” (i.e., local) rules on such issues as food safety and public procurement. Maine is known for its vibrant local foods movement, in which farmers and consumers have found common ground to increase the value of healthy and sustainable food crops. This includes a special dairy support program to balance erratic price swings, and the expansion of artisanal cheese production. Lawmakers are exploring new ways to strengthen local Farm to School programs to increase the use of locally grown fruits and vegetables in school lunches, hospitals and daycare.
The assessment focused on four sets of issues that could be impacted by TTIP, along with recommendations for follow-up by the commission:
We presented the findings at a public hearing at the state capitol, which included a lively discussion on the right role for trade policy in sustainable agriculture. Protections for Geographical Indications, for example, could be of interest to Maine artisanal cheese producers. But why should those discussions be included in the black box of the trade talks?
The U.S.-EU Organic Equivalency Arrangement offers an alternative approach to resolving those tensions within trade deals. It incorporates input from organic producers. The fact that it was negotiated on its own, outside the horse trading inherent in any trade negotiations, created the conditions for a reasonable approach that can also be reopened should conditions change in the future.
The current approach to our bilateral economic relations in TTIP is a political choice; alternatives are entirely possible. Processes like those in Maine, where citizens and policymakers are working through these issues together, could be the starting point for a very different approach.
Posted June 27, 2014 by Shefali Sharma
The UN’s Human Rights Council passed a historic resolution today for a binding International treaty to regulate human rights violations of transnational corporations. The resolution directs members to “to establish an open-ended intergovernmental working group with the mandate to elaborate an international legally binding instrument on Transnational Corporations and Other Business Enterprises with respect to human rights.” The resolution comes after heated debates at the Council with key industrialized democracies such as the United States, United Kingdom, France, Germany, Italy, Ireland, Austria, Japan and South Korea opposing the resolution—a total 14 countries voted against it (including Czech Republic, Estonia, Montenegro, Romania and Macedonia). Tabled by Ecuador and South Africa, a total of 20 countries voted in favor (Algeria, Benin, Burkina Faso, China, Congo, Côte d'Ivoire, Cuba, Ethiopia, India, Indonesia, Kazakhstan, Kenya, Morocco, Namibia, Pakistan, Philippines, Russia, South Africa, Venezuela, Vietnam) while 13 others abstained (Argentina, Botswana, Brazil, Chile, Costa Rica, Gabon, Kuwait, Maldives, Mexico, Peru, Saudi Arabia, Sierra Leone, UAE).
Over 600 non-governmental organizations, including IATP, signed a statement supporting the resolution in the two months preceding the Human Rights Council meeting. The statement was initiated by several civil society organizations as part of the launch of a “Global Movement for a Binding Treaty” called the Treaty Alliance.
Ecuador proposed the idea in September 2013 after years of fighting Chevron who has refused Ecuadorean court judgments requiring the company to pay $18 billion in damages for massive environmental destruction and other harms to communities in the Ecuadorean Amazon. To avoid these payments, the company sued Ecuador for lost profits through “investor to state” dispute settlement provisions the country agreed to when it signed a bilateral investment treaty with the U.S. Such investor state provisions that grant corporations’ right to future profits over governments’ right to regulate are sadly common in free trade and investment treaties pushed by the U.S., including the current negotiations of the Trans Pacific Partnership (with Pacific Rim countries) and the Transatlantic Trade and Investment Partnership (with Europe). Civil society groups, including IATP, strongly oppose investor state provisions.
Since the 1970s, transnational corporations (TNCs) backed by their governments have thwarted attempts for any legally binding frameworks to regulate their abuses and excesses—see timeline of efforts. However, communities worldwide have amassed mounting evidence of abuses where their economic, cultural and social rights have been violated by corporations—the Permanent People’s Tribunal made vivid these community voices through a day-long hearing on Corporate Human Rights Violations and Peoples Access to Justice. Testimonies were also streamed live.
Such People’s initiatives are growing in number and strength—aided by the launch of the Stop Corporate Impunity Campaign at Rio Plus 20 summit in 2012. The Campaign had a week of mobilization here in Geneva to strengthen the global effort and has launched a People’s Treaty process that is intended to mobilize social movements and citizens to stand up and demand accountability from their governments and to present an alternative vision of governance. It will be a critical bottom up process while governments begin their own deliberations on a binding treaty.
IATP attended a three day meeting in Geneva during this week, organized by FIAN and the Extra-territorial Obligations Consortium to outline how civil society organizations can work together to hold corporations accountable for their social and economic abuses and support these civil society campaigns. The meeting’s focus was on agribusiness abuses and their pervasive distortion of the food system. As the meeting concluded, the gathering heard that Ecuador and South Africa’s resolution had been successful. This marks a clear and much needed victory for CSO efforts and also begins a new chapter in the global campaign to stop corporate impunity.
Posted June 27, 2014 by Dr. Steve Suppan
On June 19, Wikileaks posted the April 2014 draft text of the financial services annex of the proposed Trade in Services Agreement (TISA). The Wikileaks posting shows governments, above all the U.S. and EU trade negotiators, in their traditional role of trying to open markets for the big banks and other financial firms. Incredibly, the leaked text gives no indication that the industry the U.S. and EU negotiators so zealously lobby for needed at least a $29 trillion bailout to avoid bankruptcy from 2007 to 2010. It’s as if the negotiators slept through the financial collapse.
The bailout notwithstanding, Wall Street lobbyists and, as the leaked TISA text reveals, U.S. negotiators, continue to fight reform that would apply to bank subsidiaries in the dozens of countries in which global private financial institutions operate. The draft financial services annex would allow banks, hedge funds and other financial institutions to add to the thousands of subsidiaries they have established in dozens of countries and put strict limits on regulation to what is at best a still unreformed financial services industry. For example, the U.S. and EU negotiators propose that governments that sign on to the TISA will be required to halt new regulations and other legal “measures that a Party maintains on the date this Agreement takes effect” (Article X.4, although TISA governments are allowed to renew existing legislation).
Wikileaks also posted a preliminary analysis of the leaked draft text by Law Professor Jane Kelsey of the University of Auckland inNew Zealand. She notes that “the draft text will not be declassified until five years until the TISA comes into force or the negotiations are otherwise closed.” Contrary to the international law governing treaties, the preparatory negotiations papers will not be released, impeding legal interpretation of the final agreement. Professor Kelsey states that TISA’s document secrecy would reverse a trend towards greater transparency at the World Trade Organization. TISA negotiators, however, plan that the agreement will subsume or at least replace the existing WTO services agreement, including financial services.
The leaked TISA financial services annex constitutes a counter-reformation to the last five years of relatively transparent negotiations among financial regulators to regulate commodity and financial markets to prevent re-occurrence of the global financial services crisis of 2007–09.
IATP has been working on international harmonization of commodity and financial market rules to make operational Group of 20 political commitments to reform the markets and institutions whose reckless investments and mismanagement triggered the Great Recession in which we still live. Part of this work has been through Financial Stability Board Watch, a small NGO and academic consortium that monitors the work of the FSB, one of the main coordinating agencies for advancing G- 20 commitments. Within FSB Watch, IATP has focused on over-the-counter (OTC) derivatives, a class of unregulated financial instruments whose information opacity and trading losses triggered defaults and then the financial systemic crisis. IATP recently commented on the FSB progress report on OTC derivatives to the G-20 finance ministers and on a FSB consultation paper on OTC data standardization and aggregation, a crucial reform to enable regulator surveillance of OTC trading, a prerequisite for taking enforcement actions to prevent another crisis.
On June 23, FSB Watch met with FSB staff members at their Basel, Switzerland headquarters in the Bank for International Settlements, sometimes described as the central bank for central bankers. Although the meeting was conducted on a not for attribution basis, I can describe the discussion thematically. There were eight half hour back-to-back meetings, organized, but not controlled, by questions submitted by FSB Watch members to the FSB staff. Topics covered included FSB governance and structure of representation in the FSB Regional Consultative Groups (RCGs), mostly of delegates from developing countries; shadow banking (hedge funds, money markets and other largely unregulated financial institutions); disciplines on reducing the size and activities of Too Big To Fail banks; cross-border bankruptcy resolution of multinational financial institutions; RCG priorities and concerns about FSB reform impacts on developing countries; OTC derivatives; the Legal Entity Identifier, a key tool for data transparency and aggregation; the relation of sovereign debt and credit rating agencies to financial instability.
The dedication of the FSB staff to the various aspects of reforming the unregulated financial markets, instruments, institutions and practices was impressive, as was their frankness about the difficulties they faced. Here are a couple of the big challenges for these global regulators, including those revealed by the Wikileaks posting of the draft TISA financial services annex.
For the 2013 G-20 finance ministers and central bankers meeting, the FSB published a report on proposals for limiting the size and reach of the big banks. The G-20 Summit scheduled for November 15-16 in Brisbane, Australia is supposed to agree on how to prevent the public bailouts, ensure the private sector creditors pay for losing trades ( “bail-ins”) and end the implicit subsidies received by the big banks, such as lower interest rates on borrowing. There are several tracks of thought among the FSB regulators. One track is to restructure the big banks and make them smaller, e.g. by prohibiting them from owning and trading physical commodities. That track of thought would not be realized under TISA, which prohibits any limit on the number of global bank subsidiaries, their size or activities in the host countries. Financial regulators would have to find other ways to keep financial institutions from becoming Too Big To Fail and receiving huge public bailouts in crisis and implicit central bank subsidies whether in crisis or not.
Big Bank subsidiaries that keep financial data on servers in a national territory must be allowed to move financial information, data and data processing equipment whenever they wish to (Article X.11, as proposed by Panama, a tax haven, and the European Union in the leaked draft annex). For example, if a foreign regulator were attempting to use the cross border data standardization and aggregation mechanism proposed by the FSB for data surveillance or an enforcement investigation, nothing under TISA would prevent global financial institutions from moving that financial information or data out of a territory whenever and to wherever they wished to.
In sum, the FSB government regulators and other financial regulators in the G-20 process need to thoroughly understand what their trade negotiators are proposing in TISA financial services before the reforms to prevent another global financial crisis are sidelined or undermined. The TISA negotiators will claim that the draft text will protect the right for governments to regulate, but who knows how or if such a provision would work, given all the contradictory language in the draft text and the TISA negotiators’ decision to suppress the preparatory papers that traditionally enable interpretation of international treaties.
Unlike the negotiators of TISA, we don’t have the luxury of pretending that the financial collapse never happened and the big banks need more, not less, regulation. Financial regulators must find out what the trade negotiators are doing in secret so that TISA financial services doesn’t pre-empt or put a straitjacket on the reforms that the regulators have worked so hard on since 2009.
Posted June 23, 2014 by Dr. Steve Suppan
Synthetic biology is “Still in [the] Uncharted Waters of Public Opinion,” according to a recent focus group study by the Woodrow Wilson Center for International Scholars. That’s not surprising since the technology involved sounds like something out of science fiction. It includes a range of techniques to modify organisms using artificially constructed sequences of genetic information (DNA) not found in nature. The Center’s Synthetic Biology Project gives an introduction to this discipline, sometimes referred to as “synbio.”
The advancement of synbio has taken place largely under the radar, with little public debate, but that’s changing. A June 17 criticism of an NGO synbio letter by an industry lobbyist, published on the investor website The Motley Fool, served to put more of a spotlight on the issue. The Motley Fool blog was almost immediately rebutted by Synbio Watch.
More attention was brought to synbio earlier this month, when 17 nongovernmental organizations (NGOs), including IATP, sent an open letter to Ecover, a self-described “green pioneer” of consumer and cleaning products, and its parent company Method, to protest their decision to use an oil derived from synthetically modified algae in laundry detergent. The NGOs, led by the ETC Group, Consumers Union, and Friends of the Earth, also opposed the company’s characterization of the synthetically modified ingredient as a “natural” alternative to palm oil. The palm oil industry is notorious for illegally clear cutting tropical forests and evicting forest residents to establish palm oil plantations.
Jaydee Hanson, of the Center for Food Safety, said that the companies could readily and safely substitute coconut oil for palm oil. He added, “That solution would support tropical farmers and would really be ‘natural’, rather than misleading consumers.”
The creation and use of Synthetically Modified Organisms (SMOs), to the extent that they are regulated at all, are governed in the United States by policies issued in 1986 and 1992, which were designed to expedite the deregulation and commercialization of Genetically Modified Organisms. A recent New York Times article surveyed some of the synthetic biology products that are entering the market without regulation specific to the identified and potential harms and risks SMOs pose.
Since SMOs have not undergone independent and mandatory pre-market safety assessment, the NGO letter urges Ecover/Method to “[p]ledge not to use SMO-derived ingredients in its products.” The letter also asks the companies to “[a]cknowledge that descriptors such as ‘natural,’ ‘green,’ ‘ecological’ and ‘sustainable’ cannot apply to the products of synthetic biology.” The press release for the letter links to a petition, “Synthetic Biology is not natural,” which is open for sign-ons. The petition website also contains links to more reading about synthetic biology.
Some of the issues raised in the letter will be discussed by the scientific advisory body of the Convention on Biology Diversity, which meets June 23-28 in Montreal. Of particular interest to the CBD is the effect on biological diversity of the environmental release of SMOs. The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) has already issued permits for field trials of synthetically modified biofuels feedstocks. Since the risks of SMO interaction with wild and cultivated plants are not well understood and since SMOs cannot be retrieved once released, the NGO letter calls on the CBD and “national governments to establish a moratorium on the commercial use and environmental release of synthetically modified organisms.”
IATP is beginning work to understand specific applications of synthetic biology to foods and agriculture. The aforementioned APHIS permitting process for SMO field trials is another indication that the Obama administration will use the existing framework for the case by case deregulation of GMOs to govern the deregulation of SMOs. The U.S. government is a major investor in synthetic biology, particularly through the National Science Foundation, the Department of Energy and the Department of Defense. As an investor, the U.S. government is more concerned with synthetic biology product development than it is with process or product regulation.
Indeed, it appears that federal synthetic biology investment, like the investments in the National Nanotechnology Strategic Plan, commented on by IATP, will prioritize product development over research in public and environmental health and worker safety related to nanotechnology product development. IATP anticipates a very difficult regulatory struggle for U.S. agencies to mandate pre-market safety assessment of synthetic biology products and processes. Actions like the June 2 NGO letter, by publicizing the use of synthetic biology in consumer products, will help slow down the development of the synthetic biology industry, while petitions to mandate pre-market safety of all products derived from synthetic biology or nanotechnology work their way through the legal process.
Extreme weather brought on by climate change will affect each community differently. Rural communities face particular challenges, as they often have higher transportation and energy costs, and their economy is frequently linked to agriculture—a sector directly impacted by a changing climate. But as we learned at the first Rural Climate Dialogue held in Morris, Minn., last week there are effective community-level options to respond to these climate concerns—as well as important opportunities for rural communities to be part of the climate solution.
The small town of Morris lies in west-central Minnesota along the Pomme de Terre River. This town of 5,000 is surrounded by farms, and is also home to the University of Minnesota-Morris. Last week, 15 Morris-area citizens came together for a remarkable conversation about climate change, how it is affecting their community and what can be done for the future. The citizens were part of a Citizens Jury process perfected and run by the Jefferson Center. The Citizens Jury is a randomly selected, but demographically representative group, who, over the course of three days, had access to independent resources and experts to produce their own recommendations that respond to the Morris-area community’s needs, priorities, concerns and values. As we reported earlier, Morris High School students played a critical role in assembling data for the meeting through a series of local energy surveys.
The three-day process allowed the Citizens Jury to hear from, and question, a series of local experts including the University of Minnesota’s climatologist, the Center for Earth, Energy and Democracy, the Insurance Federation of Minnesota, the U.S. Department of Agriculture’s Agricultural Research Service, the Morris City Manager, the local power company (Otter Tail Power), and the University of Miinnesota – Morris Sustainability Coordinator.
The result was a strong statement outlining community concerns and opportunities, and a list of concrete recommendations. Concerns for the Morris community included: the impact possible increases in energy and food costs could have on low- and fixed-income residents, and the possible negative effects of climate change on local farmers. The Citizens Jury also identified opportunities to sustain and actually strengthen its agricultural economy in responding to climate change, and that the Morris community can use local expertise and resources to build a more resilient local economy.
“Climate change is happening and we need to adapt our behavior and infrastructure to meet the challenges of our new world, which include extreme weather events, financial difficulties and long-term adverse effects on agriculture,” said the Morris citizen statement. “Climate change presents short- and long-term challenges and opportunities for everyone. We must all participate to solve these issues. Education is key.”
The Morris citizens issued a series of recommendations for the Morris area community to pursue including: home assessments for structural and energy-saving improvements; better water management to deal with flooding and erosion; the encouragement of greater crop diversity and crop rotations; the discussion of climate change in K-12 education; and the need to hold town meetings where more members of the community can generate and discuss new ideas.
You can read more details about the Morris’ dialogue at the Rural Climate Network’s Dialogue page, including a breakdown of each day, the final executive statement and a recap of the student’s Citizen’s Jury process conducted in May. A longer report from the Morris Citizens Jury will be coming out in the next few weeks. IATP and the Jefferson Center are in the process of identifying other rural communities that might be interested in holding a Rural Climate Dialogue.
Morris is one of the many smaller, rural towns across the country that have been largely been left out of national discussions about how to address climate change, but it’s clear that it’s time for a shift. Climate change has been so overly politicized that many have lost track of the true challenges it poses at the community level, and of the fact that those communities know best how to address those challenges. Our rural communities are great places to live; we must secure them for the next generation. As one Morris student shared in reflection of the student jury process conducted at the High School, “Climate change is going to affect business and the agricultural world […] I really thought about how this change is going to affect my generation and those that come after me so I am ready to do something about climate change.”