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.
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 one in a five part series.
To judge by the U.S. proposals in the leaked TTIP chapter on Sanitary and Phytosanitary (SPS) measures, which includes food safety rules, the U.S. Trade Representative (USTR) is seeking to export a flawed regulatory system to the EU, a system based on risk assessments that rely often on inadequate, secret data. While the leak indicates that the U.S. is trying to use TTIP to impose its weaker system for setting and enforcing SPS standards on the EU, this new transatlantic regulatory regime would also limit efforts in the U.S. to improve food safety standards and performance.
The Transatlantic Trade and Investment Partnership (TTIP) has the potential to transform agricultural trade between the United States and the European Union. TTIP could potentially lower tariffs and non-tariff barriers on a range of agricultural goods. While the impact of this on U.S. and EU food and farm systems has been heavily debated, there has been much less discussion of its possible impacts on developing countries. Could TTIP make it more difficult for developing countries to export, particularly goods which many communities have come to heavily rely on for their livelihoods?
TTIP is at the forefront of the “new era” of trade deals in that it seeks to move beyond simple reduction in tariffs towards regulatory harmonization on issues such as labor and environmental standards. In an agricultural context, tariff barriers and regulatory harmonization in areas where the U.S. and the EU differ, such as pesticide use, have garnered the most attention in the negotiations. While many states are implementing innovative pesticide regulations, in general, U.S. standards are lower than those in the EU. However, the push for regulatory convergence within TTIP—advocated by lobby groups such as CropLife America—would push standards to the lowest common denominator, while reducing individual U.S. states’ ability to regulate pesticides, as well as future efforts to regulate pesticide use within the EU.
A new report from Friends of the Earth (FoE), “Nanoparticles in baby formula: Tiny ingredients are a big concern,” will prompt a lot more commentary than can be summarized in this blog.
Two questions likely to be raised in all commentaries:
Answering these questions may seem as simple as, well, child’s play. The simple answer is if governments refuse to regulate, companies will do what they perceive to be in their economic interest. As anyone who has watched children play, their activity is not simple.
Over the past year, the Star Tribune, the largest paper in the Minneapolis-St. Paul metro area, has published almost all its articles on the outbreak of highly pathogenic H5N2 in its business section.
The placement is telling and reminds us that the paper views the virus, which has killed 50 million poultry across 21 states, as a matter for food companies and investors. It seems the ecologies and epidemiologies in which we are all embedded are to be treated as mere subsets of commodity economics.
An update last week, published—where else? —in the business section, repeated unsupported declarations about the origins of the outbreak. The newspaper claims the virus originated in Asia; migratory waterfowl brought it here and spread it; and farmer error is to blame for the outbreak. Anything but the poultry sector itself.
Defenders of high-frequency trading (HFT) claim that they provide necessary capital to commodity derivative markets that enable commercial users of commodities to trade in “liquid” markets, i.e., to manage price risks by buying and selling what they want, when they want. However, HFT orders provide capital to the market milliseconds before computer-automated trading systems (algorithms) cancel those orders. In other words, HFT provides phantom liquidity by emitting trade order price and volume “noise,” but very rarely executed trade information that is usable by commercial traders. HFT administers nearly continuous micro-shocks to price formation.
Farmers and ranchers rely on derivatives markets to set benchmark prices and price trends for forward contracting of grains and oilseeds to local grain elevators and of livestock to stockyards. When HFT “hot money” creates price volatility and price surges with little, if any, relationship to supply, demand and other fundamental factors, derivatives prices no longer help forward contracting. The “hot money” traders induce price volatility not only on U.S. markets, such as the Chicago Board of Trade, but also on Chinese commodity markets.
In early March, farmers and rural residents of southeast Minnesota gathered for three intensive days of presentations, discussion and deliberation around the thorny issue of climate change. The Winona, Minnesota Climate Dialogue participants, most of them in shirts and jeans, were a blend of ages, cultural backgrounds and jobs. Some had lived in the community their whole lives, while others had moved to the area recently. All said they loved where they lived and cared about its natural beauty—ideally positioned where fertile farmland meets the deeply carved Mississippi River Valley. But, all certainly did not come to the table with any shared view of climate change or common political perspective.
There is a common misconception that you can’t talk about climate change in rural communities because the issue is considered too polarizing. Many would likely wage a bet that a climate discussion would paralyze Winona residents, divide them, and lead to more finger pointing than hand holding. But not here. Despite their differing viewpoints, the 18 participants in the Winona County Climate Dialogue produced a collective statement and action plan, crafted solely using participant input, based on six topical presentations from local experts on weather trends, energy use, water, insurance, public health and agriculture in Winona County.
A long standing claim by the U.S. government and agribusiness lobby is that U.S. regulations on genetically engineered (GE) crops are science-based while European regulations are not. For example, an April 8 letter from the American Soybean Association to the U.S. Trade Representative Michael Froman and U.S. Department of Agriculture (USDA) Secretary Tom Vilsack, states that “approval of these events [three GE soy crops] is now needed for the EU Commission to have any semblance of a working biotech approval system.” A “working biotech approval system” is that of the United States, which invariably “approves” GE crops, i.e. deregulates them, on the basis of an agency review of data and studies, some classified as Confidential Business Information, submitted by the GE crop developer.
This approach has been in place for two decades. For example, a Food and Drug Administration letter to Monsanto in 1996 states, “Based on the safety and nutritional assessment you have conducted, it is our understanding that Monsanto has concluded that corn products derived from this new variety are not materially different in composition, safety, and other relevant parameters from corn currently on the market, and that the genetically modified corn does not raise issues that would require premarket review or approval by FDA.” A 2013 FDA letter to Monsanto regarding a GE soybean “event” deregulates the product, but does not approve it, in almost identical language.
The controversial new trade deal, the Trans-Pacific Partnership, has been a tough sell for the Obama Administration. The top four Presidential candidates oppose its passage and support in Congress is waning. The road to TPP approval got a little tougher when 161 food, farm, faith and rural organizations sent a letter to Capitol Hill urging lawmakers to reject the deal.
“The main beneficiaries of the TPP are the companies that buy, process and ship raw agricultural commodities, not the farmers who face real risks from rising import competition. TPP imports will compete against U.S. farmers who are facing declining farm prices that are projected to stay low for years,” the organizations wrote.
At a time when the farm economy is struggling, the 12-nation TPP is being sold as a boost to farmers. But many farm groups are not buying it. “Trade deals do not just add new export markets—the flow of trade goes both ways—and the U.S. has committed to allowing significantly greater market access to imports under the TPP,” the groups explained.
An IATP paper earlier this month raised concerns about the impact of increased imports of milk and whey protein concentrates from the largest dairy exporting company in the world, based in the TPP country New Zealand. U.S. dairy farmers are already suffering under a climate of extremely low prices.
The EU is being asked to give up a lot in the Transatlantic Trade and Investment Partnership (TTIP), especially its relatively higher standards on food and chemical safety. It’s also asking for a lot in return, including the massive opening of U.S. public procurement to bids by EU firms. A new leaked memo from the European Commission shows just how much they want to open up those markets. It’s a bad tradeoff for both sides.
The March 29 European Commission non-paper addressed to its Trade Policy Committee titled “TTIP–Messages on public procurement” begins with the assertion that, “Public procurement is a key component of the TTIP negotiations and an area where almost all Member States have offensive interest, and in consequence the EU has been requesting a substantial market opening in this area.” The short paper provides arguments against the idea that U.S. procurement markets are already fairly open and accessible to European companies. The memo also takes aim at local decision making on procurement and preferences for small businesses.