Posted July 14, 2016 by Karen Hansen-Kuhn
Last week, there was a bit of good news on the trade front: on July 8, tobacco giant Philip Morris lost its ridiculous case against Uruguay’s cigarette labeling laws. In 2010, the multinational company’s Swiss subsidiary—which owns its operations in Uruguay—sued the country over rules designed to discourage cigarette consumption, especially by young people. As in a similar case against Australia, the company alleged that requiring labels that emphasize the dangers of smoking lowered the value of its intellectual property rights (i.e., its trademarked labels) and therefore, its investments. The case was brought under the Investor State Dispute Settlement (ISDS) mechanism in a bilateral investment treaty between Switzerland and Uruguay. ISDS empowers companies to sue governments in private tribunals over measures that undermine their expected profits. It has become a lightning rod for controversy in the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP).
Like most fair trade advocates, I find myself explaining ISDS to people who are new to the trade debate. In my interactions with local food and farm groups, people are often a bit skeptical that such an outlandish mechanism could be real. But we have decades of evidence, such as Metalclad, the U.S. waste disposal company that successfully sued the Mexican government over a community’s refusal to reopen a toxic waste dump. Other cases could be decided soon, such as Chevron’s suit against Ecuador over environmental cleanup costs resulting from its oil drilling operations; or Pac Rim’s case against El Salvador over its ban on gold mining. According to the United Nations Conference on Trade and Investment, some 700 known cases have been filed, with a record 70 of them filed in 2015.
Philip Morris has had a run of bad luck recently with these cases. The ISDS panel ruled against its suit over Australia’s cigarette label rules last year. In that case, since Switzerland and Australia haven’t agreed to such a mechanism, the company ran the lawsuit through its Hong Kong subsidiary, which does have ISDS through a bilateral treaty. The ISDS panel ruled that this kind of treaty shopping was out of bounds. It did not rule on the underlying public health or intellectual property issues. It is entirely sensible that a company shouldn’t have the right to this kind of sleight of hand. There has been no decision yet on who will pay for the legal costs involved in the case. Reports in the Australian press indicate that the government spent AUD$50 million (US$38 million) to defend the case.
In the new Uruguay decision, in addition to ruling against the company’s claims, the panel ruled that Philip Morris should pay for the legal costs involved in the case, including $7 million of Uruguay’s expenses defending the case. While that decision is welcome news, it underscores the point that these cases can create heavy burdens for a small country like Uruguay, and no doubt lead to strong incentives for the government to simply settle the case to avoid further expenses (as well as a glaring warning to other countries contemplating such measures). In this case, the country was able to continue in part due to substantial financial support from the Bloomberg Foundation. So again, the ISDS panel’s decision that Philip Morris should compensate the government for its costs is common sense.
Here’s where the common sense aspect falls apart. Future ISDS panels are not required to abide by the logic established in these two cases. Even more fundamentally, there is no common sense reason for ISDS to exist at all. Historically, the notion was that it was needed to encourage companies to invest in countries with inadequate legal systems. The rules proposed in TPP, TTIP and the dozens of bilateral investment treaties involve many countries like the EU, Japan and the U.S. that have well developed legal systems. When TransCanada sued the U.S. government under NAFTA rules over its refusal to proceed with the Keystone Pipeline, it also sued in Texas using the normal U.S. legal system for commercial disputes.
This not only gives companies a chance for a “second bite at the apple,” it also undoubtedly sends strong political signals to other local or national governments considering new programs. Laurent Huber, executive director of Action on Smoking and Health, commented in a Reuters article that Philip Morris "will no doubt shed some public crocodile tears, but their main goal in launching the suit has been realized, six years and millions of dollars have been spent defending a nondiscriminatory law that was intended purely to protect public health…This has already resulted in regulatory chill in other countries, preventing tobacco legislation that would have saved lives."
These cases have attracted a lot of public attention. As a result, the final TPP text contains provisions allowing countries to keep tobacco control measures out of future ISDS cases. That’s a good step, but of course, still leaves many public health and environment laws subject to future suits. Food and farm advocates should also be concerned about the dozens of cases over restrictions on mining and oil exploration (with drastic impacts on water pollution), land rights and zoning.
So, while we should certainly celebrate the good news from the Philip Morris-Uruguay decision, that doesn’t mean that common sense over these kinds of disputes has prevailed. A better approach would be to set aside ISDS, as countries like Bolivia and South Africa have done, and focus on global governance rules that put us on the road to better public health and sustainable development.
Posted July 12, 2016 by Shefali Sharma
The Institute for Agriculture and Trade Policy’s European Office, along with international group Compassion in World Farming (CIWF), German member of Via Campesina—Arbeitsgemeinschaft bäuerliche Landwirtschaft e.V. (AbL) and PowerShift launched their new report Selling Off the Farm: Corporate Meat’s Takeover through TTIP today with a panel discussion and a press briefing at the European Parliament.
Some key findings from the report:
As stated in the press release announcing the report, “The U.S. simply lacks essential rules that should curb the meat industry’s worse practices that cost taxpayers millions in environmental and public health costs. The Transatlantic Trade and Investment Partnership (TTIP) negotiations are already influencing European policy even without being agreed to—this is clear from the EU’s recent decision to scrap their methane cap from their National Emissions Ceilings Directive. With TTIP, the EU industry will also ensure that pending decisions on critical issues such as cloning and glyphosate are made with trade ‘competitiveness’ in mind and not the public interest. A TTIP deal would basically hand over Europe’s animal farming sector on a silver platter to transnational meat corporations--through tariffs and quota expansions, but definitively through the sweeping de- regulatory changes the industry hopes to win through the accord.”
Sharon Treat, lead author and former U.S. state legislator said: “The analysis clearly shows that regulatory processes for key issues that the European and American public care about—from climate change, GMOs, country of origin labelling or future rules on technologies such as gene editing--will be affected. The meat industry will be able to use TTIP to effectively undermine efforts to regulate the negative environmental and public health impacts of their industrialized practices in the future—not just at the EU and federal level, but for EU Member States and U.S. states as well.”
Posted June 30, 2016 by Hannes Lorenzen
The outcome of the referendum in the United Kingdom is worth some thoughts about our future as Europeans.
It is useless to enter into the blaming mode. There are many reasons for being frustrated, upset, desperate or simply sad about the state of the world as it is. Our part of this world, Europe, is in a very bad state of mind. Hate is back between us, between political camps and parties, between governments, countries and people who do not even try to talk or understand each other. The question of the referendum was whether to stay or leave the EU. But the answer was more than “leave!”. It was an outcry of discontent and fear.
On front pages of newspapers and internet networks there is language which feeds racist, nationalist, chauvinistic and egoistic feelings and thinking. First there is hate in thinking, then in words, then in action. The killing of Jo Cox, the British young Member of Parliament during the Brexit campaign should ring a bell to all of us.
In the thirty years of my career in the European Institutions I have not heard so much insulting and disrespectful talk from Members of Parliament whose program is to leave or destroy the European Union. I call it pre-war language. The content of that language is very often inaccurate or it is built on blunt lies. The objective of that language is dividing us, bringing us back into borders of nation-thinking, - against the rest of the world. It creates fear of the future and of each other and it is used to feed the ambitions of power of a new generation of autocrats. They try to make us believe that we need to withdraw from the big and insecure world into a smaller more secure world of our nations. They tell us that we need to regain sovereignty through new borders around and between us so that we will be protected against the unknown. But drawing new borders will in no way resolve the malaise within. We need to remake the rules so that people - whether immigrants or native born—have a decent chance, and to confront the big problems like unemployment and climate change from a point of unity rather than divisions.
We cannot keep the world out there. It is coming to us. Climate change, the desperate situation of millions of refugees and migrants, and the increasingly destructive global competition for resources are the very challenges we have to deal with. No one can escape that. The current state of the world out there is part of our common national and European colonial and post-colonial responsibility.. The numerous wars and conflicts around us, and the current wave of terrorism within our nations have their roots in our own European and Western histories. If we ignore this and further use pre-war language among ourselves we will very quickly end up in new wars in Europe.
The European dream appeared from a nightmare of wars between our people. The iron curtain between East and West came down 27 years ago. Now new mental and barbed wires are being drawn between old and new neighbors, even within the European Union, to keep people out. They will not protect us from any of those challenges we might be afraid of. They will just be the source of new divisions and conflicts between us.
So what is new since the Brexit?
The first thing is that the decision is finally made. The campaign is over. The process of separation will now start. It is most probably irreversible for one or two generations and will have wide-ranging consequences for the EU and the UK.
The second thing is that within the EU and within the UK various camps will feel encouraged to further dig in their positions and sharpen their language. Within the EU, populists will take the Brexit as a blue print for further “leave” campaigns. Within the UK, independence movements in Scotland and Northern Ireland already mobilize for independence from the UK in order to be able to stay in the EU; the divide between “leave or in” has also become apparent between elder and younger people, cities and the countryside and enterprises which depend on access to the EU internal market or not.
Thirdly, for the remaining 27 national heads of governments it may dawn, that using the EU as a scapegoat for domestic problems - while picking EU money and markets—is no guarantee to stay in power. Mr. Cameron failed with that. Also earlier referenda in Denmark, France and the Netherlands hit the EU while primarily meaning the national government.
Forth, the national governments in power may now feel obliged to think about ways to keep the European project together. But they seem to be stuck. The frictions are deep. The divide between North and South, East and West has never been so sharp. Austerity policies preferred by governments in the North and East of the EU or new public investments for employment and social welfare preferred by governments in Southern member states are worlds apart. In the same way the ongoing Greek crisis reveals how far political elites are out of touch with day to day problems of people and how close to pressures of the demands of banks and national industries. Furthermore, the former political landscape has become blurry. A switch of votes from extreme and moderate left to extreme right has taken place in many countries. Mainstream parties can no longer count on their constituencies to follow their lead. They have to have new solutions that show they are listening.
Fifth, there is a worst case and a best-case scenario after Brexit.
The worst case is that Brexit is the beginning of the end of the European project. The EU would continue to exist as a mere global market place without any ambition to tame the destructive forces of global capitalism, nor to meet global challenges like climate change or to work as a Union towards social cohesion and fair trade with third countries.
The best-case scenario would be that Brexit creates new movements of civil society beyond party camps with a European spirit, which reveal the core ideas of European cooperation and solidarity and organize themselves as pan-Europeans beyond national borders. On governmental and institutional level, that scenario would include a process of intensified dialogue and cooperation with candidate countries for accession and neighbors of the EU like Ukraine, the Black Sea and Mediterranean region.
My best case scenario might sound naïve against the dominant mood of frustration and anger. But it is not more naïve or illusionary than the visions of the founders of the European project after Second World War. We must not underestimate the power of compassion for humane, democratic and just societies in Europe. They emerge from deep crisis. European civil society movements carry that compassion and positive energy. They embrace Europe on a much wider scale than within the borders of the EU. And they have found ways to influence and change the sometimes-sclerotic structures of the European institutions in a creative manner.
First there is an open mind and creative thought; then come encouraging language and dialogue; further appear gatherings, democratic decisions and good practices; and out of all that may appear a new European project.
It is worth trying.
Originally published on ARC2020.
Posted June 30, 2016 by Ben Lilliston
On a wintry day in March, residents from Winona, Minnesota gathered around tables with flip charts and markers to develop a plan for how the Mississippi River community could respond to climate change. The plan included strategies to expand local energy production and efficiency, and shift toward land use and farming practices that could slow floods that have plagued Winona over the last decade.
This type of essential community-level climate adaptation planning is happening in various forms around the country, but these efforts are often limited by divisive climate politics at the national level. A new report from the non-partisan, independent General Accounting Office (GAO) examines how other countries are establishing national-level climate adaptation planning strategies and the growing financial toll the U.S. faces by not taking stronger climate action.
The new GAO report is a follow-up to a 2013 report which outlined the rising financial risk to the federal government from extreme weather events caused by climate change. The White House has estimated that the federal government has incurred over $357 billion in direct costs due to 86 weather-related disasters over the last decade. A UN report found the global costs of storms alone exceeded $1 trillion over the last two decades. The U.S. Global Change Research Program projects that these types of disasters, and associated financial costs, will only rise in the future. A 2015 follow-up report from the GAO found that only responding to disasters at the local level is not a good long-term strategy. This reactionary approach “can limit states ability to plan and prioritize longer-term disaster resilience.”
The GAO profiled five countries that have already moved well beyond the U.S. in climate adaptation planning: the European Union, Mexico, the Netherlands, the Philippines and the United Kingdom. Each country has long-term climate adaptation plans firmly in place, in some cases for more than a decade. The plans included cross-agency coordination, incorporating climate-related risk in other domestic policies, and a system of monitoring and evaluating success. Two other important elements of these national level plans are long-term funding commitments and a framework for stakeholder engagement.
In reporting about climate planning in the five countries, the GAO wrote: “This alignment may provide co-benefits, such as infrastructure investments that protect against climate change impacts; enhance resilience to all disasters; and create economic opportunities.”
In the U.S., much-needed action on climate adaptation continues to be blocked by a Republican-controlled Congress. In 2014 and 2015, bills were introduced to strengthen federal level planning for extreme weather, but neither was approved. Earlier this month, the House voted to block a Defense Department plan to address risks to national security from climate change.
Despite inaction from Congress, the Obama Administration has taken some initial steps around climate adaptation. The President has issued an executive order directing federal agencies to develop adaptation plans and established the inter-governmental State, Local and Tribal Leaders Task Force on Climate Change Preparedness and Resilience. These are important first steps, but they lack the resources and long-term planning that needs to come from a supportive Congress.
In the coming years, climate considerations will need to be part of a much broader range of policies. For example, the mega Trans-Pacific Partnership (TPP) negotiated by the Obama Administration ignores climate change completely, despite setting new rules that will affect agriculture, mining, clean energy, forestry and other sectors that deeply impact the climate. In 2018, Congress will take up the nation’s most important bill for agriculture, known as the Farm Bill. Past Farm Bills have failed to even consider how to support climate resilience within its broad-reaching programs.
One of the barriers to taking action on climate is psychological – the global scope of the challenge can be overwhelming. But it’s not true that nothing can be done at the community level. Climate adaptation planning is taking place in various forms around the country; some initiatives are led by forward thinking government planners while others are led by concerned citizens, like those in Winona and in two other rural Minnesota communities IATP worked closely with.
At the beginning of the Winona climate dialogue, community members shared what they loved about where they live: the beauty of the Mississippi River and surrounding bluffs, and the close knit community of people that share that landscape. For many, there’s much more than rising financial costs at stake when it comes to climate change. Let’s hope Congress and our next President are ready to act.
Posted June 28, 2016 by Ben Lilliston
On July 1, Vermont’s law requiring the labeling of genetically modified foods will go into effect. That simple requirement to inform consumers about what they are eating sent a shiver through a Congress hooked on millions of dollars in biotech and food industry money. In a last minute desperate attempt to block the Vermont bill, Senate Agriculture Committee leaders Pat Roberts and Debbie Stabenow proposed a new mandatory Genetically Modified Organism (GMO) labeling bill that would pre-empt the rights of states like Vermont to set labeling rules for GMO food.
The problem with the compromise is that it’s not really a compromise – it’s very close to what Monsanto and the food industry asked for. The industry’s priority was to avoid at all costs mandatory language or a GMO symbol on food products. The compromise bill gives food companies two options: they can use a symbol or clear language that the product contains GMOs, or they can use a bar code or QR code that could be accessed by the consumer through a smartphone. Smaller food companies would have the option to just list a website or an 800 number for consumers to find out whether the food contains GMO ingredients. Wonder which options the food companies using GMO ingredients will choose?
Many consumers don’t have smartphones to access QR codes or the instant high-speed internet access necessary to check a website on the spot when buying foods. And do you want to call an 800 number with each individual food purchase?
The proposed bill won’t go into effect for two years, though preemption for states that have passed labeling bills like Vermont, Connecticut and Maine begins immediately. The compromise bill only applies to traditional genetic engineering, not to new gene editing techniques, warns Consumers Union. Nor does it apply to meat from animals fed GMO feed. There are also no enforcement measures for non-compliance.
Most GMO foods grown in the U.S.—corn, soybeans, cotton, and more recently sugar beets—are used as either food ingredients in processed food, for animal feed or in ethanol production. New GMO foods are entering the market that consumers more directly like consume sweet corn, potatoes, apples and salmon.
Congress has been trying to pre-empt the Vermont GMO labeling law, and others passed in Connecticut and Maine, since it was first passed in 2014. Earlier this year, the House passed a weak, voluntary GMO labeling bill that would pre-empt state GMO labeling laws. The Senate tried to pass a similar voluntary bill in March, but after a rush of grassroots citizen pressure, the bill was rejected on the Senate floor.
Now, the last ditch compromise bill could return to the Senate floor later this week. Passage is far from guaranteed. Senator Bernie Sanders has already declared he will do everything he can to defeat the bill. The House won’t consider the bill until after the July 4 recess and a tight legislative schedule may push off a vote toward the end of the summer.
The biotech industry has been enormously successful in hamstringing U.S. government regulation since the first GMO crops were introduced in the early 90s. Dan Quayle’s Council on Competitiveness set the initial framework for deregulation when it declared GMO crops were “substantially equivalent” to other crops and required no special pre-market testing or consumer labeling. The U.S. government has acted as much as a partner as it has as a regulator to the biotech industry. The FDA essentially ignored more than one million citizens calling for mandatory labeling, while the State Department routinely attempts to intimidate other countries into deregulating GMOs.
Despite polls consistently finding that 90 percent of Americans want GMO labeling, the biotech industry and its army of lobbyists have beat back every attempt to do so thus far. But this time may be different. A growing number of food companies have already shifted to using GMO labeling in response to the Vermont bill. As importantly, no one seems fooled by the biotech industry’s dream compromise bill that will continue to keep consumers in the dark.
Your Senator needs to hear from you. Tell your Senator, No Deal on GMO Labeling!
Posted June 23, 2016 by Tara Ritter
The Clean Power Plan is the predominant plan in the U.S. to address climate change. The Environmental Protection Agency (EPA) is encouraging states to set up regional carbon markets to comply with the plan; however, carbon markets to date have not achieved their intended goals. If states follow the EPA’s advice and set up new carbon markets across the country, they must learn from past mistakes to prevent more of the same underwhelming results.
California’s Global Warming Solutions Act (AB 32) is the most prominent U.S. example of a carbon market that has resulted in unexpected outcomes. AB 32 includes a cap-and-trade program to reduce the state’s greenhouse gas emissions to 1990 levels by 2020. The program sets a statewide emissions cap and then distributes emissions allowances to industries covered under the regulation (“covered entities”). A majority of the allowances are given away for free—a reversal of the polluter pays principle—and the remainder are auctioned off quarterly. Each year, the emissions cap and the number of free allowances each covered entity gets are ratcheted down. Ratcheting is intended to increase the value of allowances, but this strategy has not worked as of yet.
On May 18, 2016, the California Air Resources Board held its quarterly auction of allowances. Just over 10 percent of the allowances up for auction sold, and all of them sold at the price floor. This left California $600 million short of projected revenues. Although the purpose of the carbon market is not to generate revenue for the state—it’s to reduce greenhouse gas emissions—the May auction’s outcome demonstrates that allowances may not be scarce enough to drive competition for them and raise their value.
One reason for the low allowance sales and prices at the auction is the secondary market, which the state set up for covered entities to buy and sell allowances outside of the quarterly auctions. Speculators bought up allowances in earlier auctions hoping to buy and sell them for a profit on the secondary market when prices rose. But, with too many allowances on the market at low prices and with the future of the cap-and-trade program beyond 2020 in question, the allowances were dumped at even lower prices on the secondary market. At the May auction, it was cheaper to buy allowances on the secondary market than at the official auction.
The California market’s structure requires auction revenues to be used for projects that reduce greenhouse gases and environmental burdens, specifically in disadvantaged communities. Many power plants, coal mines and fracking sites are located in communities, often rural areas, already burdened by high poverty rates. These communities pay the price of the pollution through worsened public health and deteriorated natural resource bases. Because the auction revenues fell short in May, anticipated investments in California climate programs will now be much lower than expected. Cap-and-trade mechanisms have proven to be an unreliable and insufficient funding source and should not be the primary source of funding for critical climate change programs.
California’s cap-and-trade system is not the first carbon market to underperform. The Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade system among nine northeastern states, had an overabundance of allowances for years that were also sold at the market’s floor price. The EU Emissions Trading System (EU ETS) is no different; due in part to an economic recession and an over-allocation of allowances at the outset, allowance prices fell from over 20 Euros/ton in 2011 to just 2.75 Euros/ton in 2013. In order for a carbon market to be effective, it must sufficiently limit allowances and maintain high enough prices to motivate industries to reduce their emissions. Without an effective cap or price on carbon, polluters will continue polluting at whatever rate their profit objectives dictate.
The United States now has a nationwide carbon reduction policy through the Clean Power Plan, and states have until 2018 to create State Implementation Plans outlining how they will meet their emissions reduction goals. Although the EPA has encouraged carbon markets as a cost-effective way for states to meet their targets, carbon markets are not the only way to limit emissions and raise public revenue. If the Clean Power Plan does drive the creation of more carbon markets, it’s imperative that states learn from the mistakes of past markets by pricing allowances high enough, making the number of available allowances low enough and continually ratcheting down the number of allowances available to create real motivation for emissions reductions. The Clean Power Plan must avoid building more carbon markets that don’t live up to their promise.
Posted June 10, 2016 by Karen Hansen-Kuhn
The proposed Transatlantic Trade and Investment Partnership (TTIP) between the U.S. and the European Union has been negotiated in secret – preventing the public from knowing what exactly is on the negotiating table. In May, TTIP text was leaked by Greenpeace Netherlands. The leaked text provides a snapshot of the status of the talks. Review of the leaked TTIP text—U.S. and EU proposals along with an EU “Tactical State of Play” document— provides important insights into the direction of the trade talks, and raises alarm bells for advocates of fair and sustainable food and farming systems. This is part five in a five part series.
Both the U.S. and EU have stated their intention for TTIP to be the “gold standard” for other agreements. This could mean that rules set in TTIP could become the default position at the World Trade Organization (WTO) and other trade talks. Early in the TTIP talks, the U.S. proposed a special chapter that would encourage the EU and U.S. to work together to eliminate “localization barriers to trade”—measures that favor local content or preferences for local businesses—used by other countries not party to TTIP. It’s not clear if that idea ever saw the light of day, but now, the EU is proposing a chapter on Agriculture that could also serve to unite pressure on developing countries to conform to EU and U.S. proposals.
The EU has proposed an Agriculture chapter in TTIP, something not included in previous bilateral or plurilateral agreements the U.S. has negotiated. It proposes disciplines on agricultural-export credits along the lines agreed to at the Nairobi WTO meeting in December 2015, as well as other changes to subsidies and food aid programs. While progress on those issues could be helpful, these kinds of commitments in TTIP could also be used to ensure that the U.S. and EU present a united front on other issues that have been controversial in global trade talks and overwhelm developing country concerns.
The EU State of Play memo from March notes that, “As regards export competition, the U.S. is opposed to the inclusion of any discipline in TTIP that would go beyond the Nairobi outcome. It pointed to a non-binding language in TPP that resisted calls from [other TPP] members to undertake specific commitments. The U.S. proposed adding to the TTIP the language on export restrictions agreed in TPP and committed to propose an alternative language on cooperation in agriculture.”
The TPP went beyond establishing disciplines on export restrictions to also limit developing countries’ ability to shield sensitive agricultural markets from imports. Article 2.26 of TPP on Agricultural Safeguards eliminates the Parties’ rights under the WTO to apply special tariffs in the event of import surges. This issue, as well as establishing developing countries’ rights to exempt key agricultural goods from trade liberalization in order to ensure food security and rural development, has been a key point of contention in the WTO talks. The inclusion of these issues in TTIP would likely mean that two of the world’s largest economies would work together in future multilateral trade talks in ways that override the interests of smaller economies.
Many of the issues included in the TTIP drafts go far beyond anything negotiated in previous trade deals. They could affect a broad range of national and local efforts to rebuild food systems on both sides of the Atlantic and entrench corporate interests in decision-making processes on chemical, health, consumer safety and environmental standards. And yet the exact nature of these proposals remain shrouded in secrecy. Full public debates on the content of TTIP should be based on current information and transparent processes at every step along the way, rather than periodic leaks of incomplete bits of text. Only then would it be possible to envision an agreement that serves to advance progress on fair and sustainable economies and food systems.
Read the other parts of this blog series:
Part 1: Secret science would help streamline biotech and other food product approvals
Part 2: Local governments could be required to abandon buy-local requirements
Part 3: Tariff reductions could disrupt local farming systems
Part 4: Proposals on regulatory cooperation would lower standards
The complete document is available at Five Key Takeaways from the TTIP Leak for Food Systems.
The proposed Transatlantic Trade and Investment Partnership (TTIP) between the U.S. and the European Union has been negotiated in secret – preventing the public from knowing what exactly is on the negotiating table. In May, TTIP text was leaked by Greenpeace Netherlands. The leaked text provides a snapshot of the status of the talks. Review of the leaked TTIP text—U.S. and EU proposals along with an EU “Tactical State of Play” document— provides important insights into the direction of the trade talks, and raises alarm bells for advocates of fair and sustainable food and farming systems. This is part four in a five part series.
“Regulatory Cooperation” is an apparently benign name for an insidious process that would be inserted into trade agreements to establish new tools for corporate “stakeholders” to frame and dominate the development of virtually any kind of public regulations as they are being developed or even to weaken or eliminate existing rules. The U.S. and other TPP members took a first run at it in that accord, although what resulted was mainly a voluntary forum. Leaked drafts of the plurilateral Trade In Services Agreement (TISA) call for similar disciplines on Domestic Regulations. The TTIP push for Regulatory Cooperation also advances that idea, with slightly different approaches coming from the EU and U.S.
Many civil society organizations have indicated the real dangers of increased corporate influence on the development of public health and safety standards posed by the texts on Regulatory Cooperation made by both the U.S. and EU. The U.S. proposals for cost-benefit analysis of new rules, in addition to putting new burdens on regulatory agencies, would create new procedures and data requirements that could be used as evidence in TTIP investor-state cases. Corporations and other investors would be able to sue governments in private tribunals for compensation over all “regulatory actions” including how rules to protect consumers and the environment are enforced. The Regulatory Cooperation chapter is a “horizontal” chapter with application throughout the agreement, but many components of these proposals are also embedded in specific chapters of TTIP.
The second paragraph of the U.S.-proposed “Science and Risk” article in the SPS chapter, for example, would forbid regulators from adopting a food or plant safety regulation until and unless they have evaluated “any alternatives to achieve the appropriate level of protection being considered by the Party or identified through timely submitted public comments, including where raised, the alternative of not adopting any regulation.” This paragraph would enshrine the U.S. practice of allowing an exhaustive process of “timely submitted public comments” by industry to slow down or even stop new regulations, including regulations to protect public and environmental health.
In essence, the U.S. proposes to export the “guilty until proven innocent” burden imposed on U.S. agencies seeking to enact new rules to the European Commission and EU member states. European NGOs have rightly recognized that this SPS chapter proposal and other examples of regulatory cooperation in TTIP would essentially result in the corporate takeover of the EU regulatory process.
We should not read too much into the fact that the leaked provisions of the EU and U.S. horizontal regulatory chapter are mostly bracketed and thus not agreed to. The Tactical State of Play memo notes “good progress” in the regulatory cooperation negotiations and that the EU and U.S. texts are “complementary in many respects.” Regulatory cooperation proposals publicly released by the EU on March 21, 2016, which are more current than those reflected in the leaked documents, confirm that the EU and U.S. proposals are becoming more similar in approach. If enacted, this could create huge roadblocks to public interest laws on both sides of the Atlantic.
The complete document is available at Five Key Takeaways from the TTIP Leak for Food Systems.
Posted June 8, 2016 by Shefali Sharma
The proposed Transatlantic Trade and Investment Partnership (TTIP) between the U.S. and the European Union has been negotiated in secret – preventing the public from knowing what exactly is on the negotiating table. In May, TTIP text was leaked by Greenpeace Netherlands. The leaked text provides a snapshot of the status of the talks. Review of the leaked TTIP text—U.S. and EU proposals along with an EU “Tactical State of Play” document— provides important insights into the direction of the trade talks, and raises alarm bells for advocates of fair and sustainable food and farming systems. This is part three in a five part series.
Though the main critique of TTIP has been its sweeping impacts on rule making and standard setting in the two regions, further agricultural tariff liberalization will have a major impact, in particular in the E.U. The leaks offer a first look at which agricultural goods will be on the line. While average tariffs on goods traded between the U.S. and EU are quite low, those figures obscure substantial differences on key products, some of which currently protect vulnerable farming sectors that are already suffering from low prices and unstable markets. In a memo describing tariff reduction offers dated November 20, 2015, the EU notes the intention under TTIP to eliminate tariffs on 97 percent of goods. While exactly how this will play out will only become clear during the final “endgame” of the negotiations, the memo describes substantial, and in many cases, abrupt changes in tariffs on farm goods. As of November, the EU was offering to lower more tariffs than the U.S., but in the latest round of negotiations in April, the U.S. reaffirmed its goal for total tariff elimination. The EU still opposes this position in the interest of its most sensitive agriculture products.
Contrary to what EU negotiators have been saying about such protection, the leaks demonstrate that the EU is already willing to reduce—and over three to seven years eliminate—duties on 175 agricultural tariff lines (categories of agriculture products) that include live cattle, goat meat, milk and cream, nuts, fruit jam and fruit juice, animal feeding, and glues. In addition, the EU and U.S. have designated two percent of all their tariff lines in a special “T” category. These tariffs will be eliminated, but over an as-yet undetermined phaseout period that could extend beyond seven years. These products for the EU include poultry, ham and swine preparations, barley/maize, wheat and wheat flour, and fertilized eggs (other than chicken eggs). The U.S. has similarly placed certain swine and lamb products, 17 kinds of dairy and cheeses, chocolate and olives in the “T” category.
In a “game of chicken,” the U.S. continues to reserve some tariffs on bovine meat products and 144 kinds of dairy and cheese products (as well as several industrial products such as cars) for less than full tariff elimination in order to push the EU to liberalize more agricultural goods. The EU is protecting 281 agriculture tariff lines that include products made from bovine, swine, poultry, dairy, fertilized chicken eggs, vegetables and fruit, rice, maize flour, starch and sugar). The EU has also indicated that although some tariffs will not be eliminated, tariff rate quotas (set quantities allowed in at reduced tariff rates) for beef raised without the hormones that are banned in the EU are likely to be set.1 This will mean much more pressure on the EU’s beef sector. Taken together, these commitments will have big impacts on EU farming systems.
In many of these cases, the real issue is not just the tariffs. For instance, the EU was expecting the U.S. to abide by certain animal welfare provisions for egg-laying hens on a few tariff lines (for birds other than chicken) and also expecting an “economically meaningful” procurement offer by the February 2016 round before it makes further offers, according to the State of Play memo. The EU prohibition on beef produced with hormones, chlorine-rinsed chicken or sale of cloned animals for meat (to name a few of many examples) are considered non-tariff barriers in TTIP. These measures enhance public health and animal welfare while strengthening local production in Europe from floods of cheap imports produced with lower standards. These are going to be the crux of heated negotiations during the so-called “endgame” of the talks.
Many of the same agribusinesses already operate on both sides of the Atlantic, and at least part of the reduction of agricultural tariffs is about making it easier for those companies to trade across borders. This tariff memo describes the EU’s so far frustrated ambitions for the trade deal, and some of the concessions it is prepared to offer in exchange. It’s hard to discern from this how U.S. farms would be affected. However, changes in public support and volatile and plummeting global prices for dairy products have already left dairy farmers on both sides reeling. Meanwhile, the EU and U.S. negotiators are busy horse trading the lives of small dairy and meat producers and processors over the amount of car parts and other goods each side is willing to liberalize. This will lead to a bad deal for family farmers on both sides of the Atlantic.
The complete document is available at Five Key Takeaways from the TTIP Leak for Food Systems.
1. “U.S., EU To Increase Tariffs Subject To Immediate Elimination, But Clash On Eliminating All,” Inside U.S. Trade, April 29, 2016.
Posted June 7, 2016 by Sharon Anglin Treat
The proposed Transatlantic Trade and Investment Partnership (TTIP) between the U.S. and the European Union has been negotiated in secret – preventing the public from knowing what exactly is on the negotiating table. In May, TTIP text was leaked by Greenpeace Netherlands. The leaked text provides a snapshot of the status of the talks. Review of the leaked TTIP text—U.S. and EU proposals along with an EU “Tactical State of Play” document— provides important insights into the direction of the trade talks, and raises alarm bells for advocates of fair and sustainable food and farming systems. This is part two in a five part series.
One of the EU’s key offensive interests in the trade talks has been to open U.S. public procurement programs at all levels of government to bids by EU firms, removing policies that support local employment, local content or portions of contracts set aside for small businesses. While many states have agreed to those kinds of commitments in previous trade deals (although the number has dwindled in recent agreements), this could mean an unprecedented expansion to municipal and county governments and agencies. As indicated in the Tactical State of Play document, so far, the U.S. has been cool to proposals to commit local governments on procurement. Exactly which state or local governments or institutions would agree to those commitments would be indicated in an annex to the Procurement chapter text. That annex was not leaked, and probably doesn’t yet exist.
In addition to bracketed language in Article X.4.3 that would “immediately and unconditionally” cover both national and local government goods, services and suppliers, the EU is advancing a bold new “flow down” proposal, which would broadly cover local entities. In paragraph 4 of Article X.2 on Scope and Coverage, projects that are more than 50 percent funded or covered by national or local governments that have signed on to TTIP, but are not otherwise directly covered in the text, would be required to follow the rules those agencies have agreed to. This provision appears to be a catch-all that would sweep within its ambit not only state and local government projects but also nonprofit enterprises, utility districts, universities, hospitals and potentially state Medicaid contracts (“project” is not defined in the text, but services are covered). For example, since Medicaid provides medical transportation services to clients, these contracts would be covered by the procurement disciplines if funded more than 50 percent by a covered federal agency.
We do not know the U.S. position on this flow down proposal. However, if the TPP is the model for the U.S. position in the TTIP negotiations, that agreement excludes state and local procurement from the disciplines of the procurement chapter (with the proviso that negotiations to include sub-central procurement must commence within three years) and did not include provisions that would indirectly bind federally-funded projects. TPP Annex 15-A in Section A, Note 1 exempts USDA funded “procurement of any agricultural good made in furtherance of an agriculture support program or a human feeding program,” which protects many Farm to School local procurement programs.
The leaked TTIP text goes further than the TPP in restricting local development preferences, known as “offsets.” It appears that EU and U.S. negotiators have agreed to a definition of “offset” in Article X.1(o) which is more expansive than that in the TPP. The TTIP text defines offsets as “any condition or undertaking that encourages local development or improves a Party’s balance-of-payments accounts, such as the use of domestic content, the licensing of technology, investment, countertrade and similar action or requirement.” In contrast, the TPP definition limits the application of this prohibition to a “condition or undertaking that requires the use of domestic content” [emphasis added].
EU negotiators have previously made known their interest in negating in TTIP longstanding U.S. procurement policy that provide for set-asides or preferences for small businesses. The U.S. maintained those preferences in the TPP with language that exempts “any set-aside on behalf of a small- or minority-owned business” including “any form of preference, such as the exclusive right to provide a good or service, or any price preference” from the procurement rules. The TTIP leak did not include any similar protections. However, annexes and schedules of commitments and exclusions, while referenced, were not leaked.
The complete document is available at Five Key Takeaways from the TTIP Leak for Food Systems.