Consumer interest in healthy food and supporting sustainable local food systems has never been higher. Consumers want and expect that product labels will identify where their food is from, how it was produced and what is in it. With federal food labeling policies lagging far behind public expectations, state legislatures have taken the lead by enacting labeling laws to educate and protect consumers and support local food systems. Nearly 300 food labeling bills were introduced in state legislatures in 2014 and 2015, including nutrition disclosures, sugary drinks warnings, identification of local products such as olive oil and seafood and disclosure of GMO ingredients.
The United States is looking to wrap up two new massive trade agreements that could threaten the continued viability of these local food policy initiatives. The Trans Pacific Partnership (TPP) among 12 nations would cover 40 percent of global economic activity. The Transatlantic Trade and Investment Partnership (TTIP) would link the U.S. and European Union (EU). Unlike earlier trade agreements focused primarily on reducing tariffs to open up markets, these agreements are likely to include extensive provisions intended to reduce or eliminate state and federal regulations.
The TPP has already been sent to Congress, which will soon be reviewing it under an abbreviated "fast track" process. The trade agreement with the EU is still under negotiation, but both the US and EU hope to finalize a deal by the end of 2016. Thus, it is imperative that consumer advocates and state government officials take steps to get informed about these deals as quickly as possible. If they do not, they could see important state health and consumer protections, including food labeling, undermined and likely rendered moot by these international agreements masquerading as trade facilitation.
Rules on "technical barriers to trade" (TBT) at the World Trade Organization (WTO) have already been used to overturn federal food labeling standards, including Country of Origin Labeling for meat. A draft TBT chapter for TTIP would require that labeling rules set at the national level apply across the land, potentially threatening more progressive programs like Vermont's GMO labeling law. State standards that differ from federal rules could be challenged, even if U.S. law allows for those differences.
Health warnings are also at risk. In 2015, bills were introduced in three states-California, New York and Vermont-to require safety warnings on sugary drinks. The US Trade Representative (USTR) has opposed such laws in other countries, objecting to Chilean nutrition warning labels because they might discourage consumption of imported processed foods. The TPP includes a new annex on "Proprietary Formulas for Prepackaged Foods and Food Additives" that could hinder stronger federal standards relating to junk food warnings and detailed information about "proprietary" food additive formulas. Another section, "Trade in Products of Modern Biotechnology," encourages GMO and other biotech agricultural products.
Business groups have openly stated their interest in using these trade agreements to thwart state and local consumer protections. The U.S. Council for International Business testified that "[s]ubsidiary political units, such as EU Member States or US States should be prohibited from seeking to impose separate requirements for approval or local restrictions on sale or use."
The EU's proposal for a Regulatory Cooperation chapter in TTIP could create new obstacles to innovative legislation. Under that proposal, a U.S. federal agency would be charged with collecting information about proposed and pending federal and state legislation and regulations and sharing it with trading partners. Foreign governments could then use the TTIP to influence domestic policies and procedures.
The TPP would require the federal government to provide advance notice of state-level proposals for regulations that "may have a significant impact on trade" to trade partners. The federal government would be required to engage in "technical discussions" upon request by another TPP country to align state regulations with international standards. This would create pressure for the laws of the TPP countries would become equivalent over time.
These provisions don't specify how-or if-state policymakers would be consulted. But it's likely that they would impose new burdens on budget-strapped state agencies and legislatures, shifting resources from the implementation of consumer protections to collating documents and monitoring and participating in international meetings. The consequences could extend well beyond increased red tape. Attempts to harmonize U.S. federal standards with those of our trading partners would mean reining in outlier state standards that impose additional or different requirements on businesses, such as state-level food labeling standards.
The Investor-State Dispute Settlement (ISDS) procedures in trade agreements-including the TPP and the TTIP-allow foreign investors to sue governments directly in private investment tribunals, bypassing the courts or allowing a "second bite" if the investors do not like the results of domestic court decisions. For example, under ISDS transnational corporations could sue for claimed lost profits due to food labeling requirements or GMO disclosure rules that companies claim will lower sales of GMO-containing products.
ISDS clauses in other trade agreements have been used repeatedly to attack environmental and public health measures. Even unsuccessful challenges take years to resolve, cost millions to defend and have a chilling effect on the development of new legislation. TPP and TTIP would exponentially increase the number of corporations that could take advantage of these special rights to challenge consumer standards.
1.) National Conference of State Legislatures' databases of state legislation on environmental health and agriculture and rural development. Last accessed July 30, 2015.
2.) Senators: Voluntary is not COOL, Shefali Sharma, IATP, December 2, 2015.
3.) See initial proposal for legal text on "Technical Barriers to Trade", Article 4.
4.) See, CA S 203 (2015), Sugar-Sweetened Beverages: Safety Warnings, Senator Monning; NY A 2320 (2015) Labeling of Sugar Sweetened Beverages, Assembly member Dinowitz; VT H 89 (2015), Health and Safety Warnings on Sugar Sweetened Beverages, Representative Stevens.
5.) USTR 2014 Report on Technical Barriers to Trade, p. 55.
6.) USCIB, The United States Council for International Business Submission to USTR?on The Transatlantic Trade and Investment Partnership (May 10, 2013) available at http://www.uscib.org/docs/2013_05_14_.
7.) Preempting the Public Interest: How TTIP Will Limit US States' Public Health and Environmental Protections, Center for International Environmental Law (September 2015).
8.) TTIP alone could "quadruple" the number of newly empowered investors, see TAFTA Corporate Empowerment Map, Public Citizen.
Trade Secrets is a series on how the United States’ international agreements influence a wide range of policies, laws and corporate activities within our borders—and beyond. From food safety to climate change and from labor to consumer protection, trade has an enormous and often invisible pull on the actions governments take and the choices available to citizens. Trade laws often displace hard-won domestic policies.
This series is a collection of primers on trade agreements and how they shape our daily lives, our workplaces and our governments.