Currently browsing posts about: Trade

Every now and then I like to try to catch up with the arcane topic of trade agreements (see last week’s post).  Today, I’ll deal with the other one still in play, the Trans Pacific Partnership (TPP).  The U.S. Trade Representative’s Office states the administration’s position on the TPP.  Ballotpedia.org has a helpful summary of where we are on it.

For this one, should you be at all interested, the full text of the TPP is available online.  Like all trade agreements in which the U.S. participates, the TPP is about reducing and eliminating tariffs.  In principle, this is supposed to foster competition and create business opportunities and, as the Trade Representative’s Office says, “leveling the playing field for American workers & American businesses.”

The TPP was signed by the U.S. and the 11 other participating countries in February.  But for us to participate in it, Congress has to ratify the agreement.  It has not yet done so, not least because the TPP is caught up in election-year politics.

Contributing to slow approval is the weak endorsement of the International Trade Commission, which was required to report on the agreement’s economic effects.  Its conclusion: TPP would improve the economy by 2032 (the target year, apparently)—but by less than 1%.  The report gives examples of the increased percentage over baseline in 2032:

• Annual real income: $57.3 billion (0.23 %)
• Real GDP: $42.7 billion (0.15 %)
• Employment would be 0.07 %
• Exports: $27.2 billion (1.0 %)
• Imports: $48.9 billion (1.1 %)
• Agriculture and food output: $10.0 billion (0.5 %)

So TPP has an upside, but a small one.

What about the downside?

For starters, see the letter filed in January by 1500 groups opposing the agreement, and this BMJ paper, just out, about the TPP’s potential to block public health policies such as front-of-package food labels.

Public Citizen also has concerns.  These include, among others, that the TPP would:

• Make it easier for corporations to offshore American jobs.
• Push down domestic wages.
• Flood the U.S. with unsafe imported food.
• Permit big pharmaceutical corporations to keep lower cost generic drugs off the market.
• Tacitly permit human rights violations in partner countries (the agreement does not mention “human rights”).

The Institute for Agriculture and Trade Policy (IATP) has problems with the “fast-track” rules passed by Congress earlier this year.  Under these rules, Congress is only allowed to vote yes or no on the agreement.  It cannot amend it. The IATP says:

Provisions in the chapter on Sanitary and Phytosanitary Standards, for example, would reduce the food safety inspection capacity of food imports, and relegate controversies over GMOs to questions of market access rather than public or environmental health. The inclusion of investor state rules would give foreign corporations new ways to challenge a wide range of environmental and consumer laws around the world for alleged loss of anticipated profits. New rules on patent protections would limit farmers’ ability to save seeds. The agreement fails to acknowledge climate change while expanding an extractive mode of globalization. Like previous failed trade agreements, there are a lot of promises to help farmers that will likely result in the accelerated loss of family farms.

Should you want to do some advocacy on this issue, the IATP has produced a timeline for urging Congress to say no to the TPP, and a handy form for doing so.

A couple of years ago, I wrote a long post attempting to explain the Transatlantic Trade and Investment Partnership (TTIP), a trade agreement under negotiation since then with the European Union.  Like all trade agreements, this one is done secretly, making it difficult for interested parties to weigh in.

But Greenpeace Netherlands has now leaked what it says are the texts of 13 chapters of the TTIP.  These include 248 pages of internal documents dating from TTIP talks at some uncertain date.  These include chapters about food and agriculture, as well as many other issues.

The documents include a 25-page “Tactical State of Play” on the negotiations similar to a 20-page public EU report, but with more detail on points of disagreement and consensus.

Greenpeace claims that the documents demonstrate major risks for the climate, environment and consumer safety.  The Office of the U.S. Trade Representative strongly disagrees, and European Trade Commissioner Cecilia Malström says the leaked documents only reflect negotiating positions.

I took a look at the leaked Chapter X Agriculture [US: Market Access].  The European Union proposes, for example:

• [On public health and safety] The Parties recognize that their respective societal choices may differ with respect to public policy decisions affecting agriculture. In this regard, nothing in this Agreement will restrain the Parties from taking measures necessary to achieve legitimate policy objectives such as the protection of public health, safety, environment or public morals, social or consumer protection, or the promotion and protection of cultural diversity that each side deems appropriate.
• [On sustainability] The Parties recall the prominent role of sustainability in its economic, social and environmental dimensions in agriculture and aim at developing a fruitful cooperation and dialogue on agricultural sustainability issues. To this end, the Parties shall work together to…exchange ideas and share experience in developing sustainable farming practices, particularly with regards to organic farming, and environmentally friendly rural development programs.
• [On geographical indicators] The Parties shall cooperate in matters related to geographical indications…The Parties reaffirm the importance of origin-linked products and geographical indications for sustainable agriculture and rural development, and in particular for small and medium-sized enterprises.

On international agricultural development, the United States proposes

The Parties shall work to promote international agricultural development and enhanced global food security by: (a) promoting robust global markets for food products and agricultural inputs; (b) seeking to avoid unwarranted trade measures that increase global food prices or exacerbate price volatility, in particular through avoiding the use of export taxes, export prohibitions or export restrictions on agricultural goods; and (c) encouraging and supporting research and education to develop innovative new agricultural products and strategies that address global challenges related to the production of abundant, safe and affordable food, feed, fiber, and energy.

You have to read between the lines to figure out what they are really talking about (GMOs in the case of this last one).

Politico Pro’s analysis suggests that several issues remain unresolved:

• The link between agriculture and car parts: we take European car parts and they take our agricultural exports.
• Protection of wine names. The EU does not want us to use European names for our wines; Washington does.
• The EU’s October proposal to cut back on antibiotic use in livestock is not in these documents.
• The sanitary and phytosanitary chapter (the one that deals with food safety) finds little agreement on use of animal growth hormones or GMOs.
• GMOs: The US wants the EU to accept them. The US language says “Each Party shall endeavor to meet applicable timelines for all steps in its approval or authorization processes for products of modern agricultural technology.”

Perhaps in response, the EU has now released its own version of the agriculture chapter, and  the European Commission has released all of its working documents related to the TTIP, including draft proposals on agriculture and other matters.

The European Commission also released a report on the state of the negotiations.  Several points are unsettled.  The EU, for example:

• Indicated it does not support a US proposal on modern agricultural technologies.
• Insisted on the importance of animal welfare provisions in trade agreements and the relevance of the matter for SPS [Sanitary and Phytosanitary issues, such as food safety].
• Stressed the importance of joint efforts to fight AMR [antimicrobial resistance] at all levels in all fora and argued for the inclusion of AMR in the SPS Chapter.

On our part, the U.S. goals for agricultural trade are

• Eliminate tariffs and quotas
• Address SPS measures and technical barriers to trade (TBT).

More than two dozen Senators urged U.S. Trade Representative Michael Froman to ensure there is “a strong framework” for agriculture in the TTIP, warning that its absence could have a negative impact on Congressional support for any deal.

As long as the negotiations continue in secret, all of this will remain mysterious and out of the reach of the public.  This makes trade negotiations inherently undemocratic, something Greenpeace attempted to reverse in releasing the leaked documents.

I’ve been collecting items on sugars.  Here are the first two.  Two more will come later this week.

1.  The American Academy of Pediatrics Council on Nutrition has new guidance on sugars in schools.

Although access to junk foods remains an issue in schools, the Council blames the problem on students, parents, and staff.  It advises:

A positive emphasis on nutritional value, variety,appropriate portion, and encouragement for a steady improvement in quality will be a more effective approach for improving nutrition and health than simply advocating for the elimination of added sugars.

Really?  Evidence, please.

I ask because Kellogg could not be happier with this approach.  A little sugar, it says, may help kids eat more nutritious foods.

Surely it’s not a coincidence that one of the authors discloses receiving support from the National Dairy Council and the American Dairy Association, and the other receives support from the Nestle Nutrition Institute.

In any case, we aren’t talking about a little sugar in schools.  We are talking about candy, cupcakes, and drinks brought in for birthdays, treats, and after school celebrations.

2.  Sugar in the Trans Pacific Partnership (TPP)

This, you will of course recall, is the controversial multinational trade agreement currently under negotiation (see my previous post on this topic).

Japan wants to keep its tariff on sugar.

It now appears that the Japanese sugar industry gave a 1 million yen donation to a political group that supports Minister of Agriculture Koya Nishikawa, just before he became involved in the TPP talks in 2013.

As one commentator put it, considering Nishikawa’s central role in the TPP negotiations,

his receipt of a donation from an industry group brings his morals as a politician into question. Nishikawa stated that he returned the donation in light of his capacity as agricultural minister, but this is unlikely to resolve the situation…In March 2013, it was announced that the Japan Sugar Refiners’ Association would receive 1.3 billion yen in subsidies under a Ministry of Agriculture, Forestry and Fisheries’ project.

At the very least, this situation looks like blatant conflict of interest.

Sunday’s New York Times discussed how foreign governments are dropping millions on Washington DC think tanks to fund reports explicitly designed to influence government agencies to set policies favorable to the donor country’s interests.  One such interest is food trade with Asia.

The line between scholarly research and lobbying can sometimes be hard to discern.

Last year, Japan began an effort to persuade American officials to accelerate negotiations over a free-trade agreement known as the Trans-Pacific Partnership (TPP), one of Japan’s top priorities. The country already had lobbyists on retainer, from the Washington firm of Akin Gump, but decided to embark on a broader campaign.

Akin Gump lobbyists approached several influential members of Congress and their staffs…seeking help in establishing a congressional caucus devoted to the partnership, lobbying records show. After those discussions, in October 2013, the lawmakers established just such a group, the Friends of the Trans-Pacific Partnership.

To bolster the new group’s credibility, Japanese officials sought validation from outside the halls of Congress. Within weeks, they received it from the Center for Strategic and International Studies, to which Japan has been a longtime donor. The center will not say how much money the government has given — or for what exactly — but an examination of its relationship with a state-funded entity called the Japan External Trade Organization provides a glimpse.

In the past four years, the organization has given the center at least $1.1 million for “research and consulting” to promote trade and direct investment between Japan and the United States. The center also houses visiting scholars from within the Japanese government…one Japanese diplomat…said the country expected favorable treatment in return for donations to think tanks.  “If we put actual money in, we want to have a good result for that money — as it is an investment,” he said.

Ah yes, the Trans-Pacific Partnership (TPP).  Let’s start with the context: The US has trade agreements with 20 countries.

These, says the US, provide many benefits:

Trade is critical to America’s prosperity – fueling economic growth, supporting good jobs at home, raising living standards and helping Americans provide for their families with affordable goods and services.

Obviously, Japan must think the TPP will do all that and more for Japan.

But trade negotiations run into trouble when one partner has higher food safety standards—Sanitary and Phytosanitary (SPS) Measures—than another.

This is an issue in current negotiations over the TPP.

Like other trade agreements, the negotiations are conducted in secret.

Over the past two years there has been a steady drip of stories about the secretive negotiations regarding the Trans Pacific Partnership (TPP). Members of Congress and congressional staffers have been stymied in their efforts to perform some measure of oversight while major corporations have reportedly been given unfettered access and influence over the deal. The public has been kept almost completely in the dark regarding negotiations that affect everything from food prices to our ability to innovate on the Internet…Historically, international trade negotiations have happened through the World Trade Organization…Trade negotiators have had trouble closing major deals over the past decade, in part because the public, and sometimes their elected officials, have stood up to decry these secret negotiations, demanding oversight opportunities and setting up websites to post leaked drafts of the agreements.

According to PoliticoPro, negotiations on TPP with Japan and 10 other countries in the Asia-Pacific region are close to conclusion, but pork producers, other farm groups, and Republicans are insisting that Japan eliminate all agricultural tariffs and completely open its market to U.S. agricultural exports.

Japan says it can offer improved market access but cannot eliminate all tariffs because of pressures from its own farm groups.

At the end of July, some House members demanded that Japan—and Canada—be dropped from the TPP if they do not agree to eliminating tariffs.

Trade negotiations work in predictable ways.  for example, despite the North American Free Trade Agreement (NAFTA—and also see this link— which allows unfettered imports from Mexico, the US is imposing tariffs on Mexican sugar to prevent flooding the US market with cheap supplies that undermine sales of US sugar (NAFTA allows this).

The moral: In trade agreements, each country looks to maximize its own interests.  Hence: Japan’s lobbying via Washington think tanks.