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States get proactive on trade agreements: The Maine model
Used under creative commons license from marctomik

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:

  • Food safety: There are some real differences in U.S. and EU rules on food additives, pesticides and other agrochemicals. The EU’s restrictions on genetically modified organisms (GMOs) and its labeling laws could come under pressure in TTIP. Any changes in those rules made under TTIP would apply to the U.S. as well as the EU, potentially limiting Maine’s GMO labeling law and other state-specific programs.
  • Public procurement: Procurement programs, whether for local foods, roads, or renewable energy, are important tools to strengthen local economies. Maine (along with 36 other states), the U.S. and the EU are already included in the plurilateral Government Procurement Agreement at the World Trade Organization, which requires many procurement programs (but not federally funded Farm to School programs, at least for now) to be open to bids from foreign companies. The EU is seeking to expand those commitments in TTIP at the state level to include all goods, all services and all sectors, potentially undermining these important programs.
  • Geographical Indications (GIs). GIs establish legal protections for products based on their place of origin, specific production techniques, and the reputation of quality for those goods. The EU protects over 1,200 such products through intellectual property rules enforceable through trade agreements. Some U.S. GIs exist, such as Maine Lobster, which are protected by trademarks held by producers. The EU seeks to protect GIs in TTIP, potentially including cheese names such as Feta, Gorgonzola and Munster, as it did in recent bilateral trade agreements with Canada, Central America, Peru and Korea.
  • Dairy: Maine dairy farmers—like American dairy farmers—have been struggling for the past decade due to low producer prices, which are set by a complicated formula administered by the Federal Milk Marketing Order system (FMMO). FMMO prices have rebounded somewhat in the last two years, due in great part to increased demand for non-fat dry milk (NDM). Increased trade could lower the price of NDM, and in so doing, drive FMMO prices down significantly. Maine currently supplements payments to farms through a Dairy Stabilization Program, which could be subject to legal challenges under the trade deal as an unfair price support.

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.