The eighth negotiating session for the Transatlantic Trade and Investment Partnership Agreement (TTIP) is happening this week in Brussels. One of the thorniest parts of the negotiations between the U.S. and EU concerns food safety.
Today, IATP published an analysis of the European Commission’s proposed chapter on food safety, plant health and animal health and welfare (SPS), released on January 7, and a January 28 leak of the chapter on “regulatory cooperation”. The proposal for regulatory cooperation covers all U.S. and EU “regulatory acts” (pre-regulatory research and draft proposed regulations, finalized regulations, and their implementation and enforcement), including those of U.S. states and EU member states that might have a “significant impacts on trade and investment” (Article 5).
Additionally, IATP has contributed to a joint NGO statement about the SPS chapter that was released in time for an EC-sponsored TTIP Stakeholders meeting on February 4. IATP’s analysis of the proposed chapters and of the U.S. government’s insufficient capacity to provide the “appropriate level” of SPS protection guaranteed in TTIP, give plenty of reason to doubt that public, environmental and animal health and welfare will be protected, as negotiators have promised.
TTIP and the TransPacific Partnership (TPP) are primarily agreements about ensuring that regulations to protect public health, food safety, environmental health and worker safety are “least trade restrictive,” although the TPP also proposes sharp reductions in import tariffs. Because the public has no access to the U.S. Trade Representative’s (USTR) negotiating texts and because industry demands to the USTR to remove “trade irritants” include SPS regulations, these agreements are extremely controversial, particularly in Europe.
For example, an anti-TTIP rally on food and agriculture last month in Berlin drew more than 50,000 people. In December, the European Citizens Initiative delivered to EU President Jean-Claude Juncker a “birthday card” with a million signatures on a petition to stop TTIP negotiations altogether. If the Congress gives President Obama “fast track” Trade Promotion Authority (TPA) in March, the USTR could present the TPP and the TTIP to Congress for a yes or no vote, since “fast track” TPA forbids amendments and allows very limited debate on the trade agreements.
IATP’s analysis of the EC proposed SPS chapter and the leaked regulatory cooperation chapter, which applies to the SPS chapter, yields the following highlights:
- As part of “regulatory cooperation” the U.S. and EU will be obliged to forewarn each other about “planned regulatory acts” and their “potential for significant impacts on trade and investment.” This early warning system will target all trade-related U.S. federal, state and local regulations, as well as EU-wide and EU member state regulations. (Restricting regulation by requiring cost-benefit analysis prior to implementation is one of more than 70 procedural requirements to impede regulation in the “Regulatory Accountability Act” currently before the U.S. Congress.)
- In the event that “regulatory cooperation” fails to prevent or modify regulations that may have a “potential significant impact on trade and investments,” investors may sue governments in private tribunals of trade lawyers, if investors believe the regulations are applied in such a way as to “nullify or impair” anticipated benefits under TTIP.
- Although the SPS chapter requires that the U.S. and the EU each provide resources “necessary to implement this Chapter,” those resources are not the same as those required to protect human, animal and plant health. For example, the proposed SPS chapter would ban import re-inspection of food and agricultural products, a traditional food safety management tool, in order to expedite trade. Inspections with paperwork “import controls” are allowed only in “exceptional cases,” such as checking for “regulated pests.” TTIP shrinks the kind and amount of resources that are necessary to provide the “appropriate level” of SPS protections.
- The SPS chapter relies on the inspection of export facilities, but the food industry and members of Congress are opposed to paying fees for SPS regulatory services. The Republican Party is opposed to any tax increase whose funds would pay for such services. The certification of food and agricultural facilities as eligible export to will not be withdrawn if an inspection of one of those facilities shows it to have failed to meeting auditing criteria yet to be negotiated in an annex. However, EU and U.S. may, but are not required to, publish the results of their audits and verifications of each other’s export facilities.
- The chapter allows for temporary import controls only to facilitate “new trade,” which presumably covers novel foods derived from currently unregulated technologies, including agri-nanotechnology and plant synthetic biology. According to a European Food Safety Authority survey of EU member state authority, about 120 food or food-related products incorporating atomic to molecular size materials are in European commerce. As ever, any eventual EU or U.S. regulation of these technologies must be, per TTIP, “least trade restrictive.
- Animal welfare protections in the chapter are not “must” but “we shall try” provisions, save for one paragraph. The chapter requires U.S.-EU cooperation to build “science based” animal welfare standards. The U.S. Animal Welfare Act of 1966 exempts government research from that law, so meat produced by technology developed by horrific experiments at the U.S. Department of Agriculture’s Meat Research Center, as reported by The New York Times, will not violate TTIP’s animal welfare article.
- The Joint Management Committee for SPS Measures may include “non-governmental experts” to join the Committee to discuss “specific SPS issues.” Industry has demanded such inclusion and given the purpose of the chapter, it is likely that the experts included will either be from industry or academics with industry ties.
Much remains to be negotiated, particularly more than a dozen annexes that will contain crucial details about how the SPS chapter is to be implemented. The European Commission has promised to publish future negotiating proposals after they have been discussed with the USTR. The Obama administration has made no such commitment for any trade agreement. Indeed, given the Obama administration’s relentless pursuit of whistle-blowers, it is not likely that U.S. officials will leak draft negotiating text.
Members of Congress, without their staff or experts of their choosing, may read the draft negotiating texts in a room with guards posted at the door. The People’s representatives are not allowed to take notes about what they are reading nor may they discuss publicly the textual specifics of the USTR negotiating proposals. If the Obama administration wins fast track Trade Promotion Authority, the USTR will present a final TTIP text to Congress for a yes or no vote, with no amendments allowed. To give fast track a semblance of democracy, the expedited procedure allows each chamber of Congress 20 hours to debate the text it has forbidden itself to amend.
The conclusion of IATP’s analysis urges TTIP negotiators to take a hard look at the very high costs of SPS regulatory and market failure. TTIP’s carefully modulated pressure against regulation in all economic sectors takes place seven years after the deregulation of the financial service industry resulted in the Great Recession in which most U.S. and European citizens still live. The U.S. economy alone suffered at least $12.8 trillion in damage. A 2010 study by a former U.S. Food and Drug Administration economist put the average annual cost of acute (requires hospitalization) foodborne illness at $152 billion. Only part of that cost can be attributed to regulatory failure and only part due to imported food and agriculture products.
However, given that the TTIP economic benefits forecast by proponents amount to a “rounding error” in terms of the EU and U.S. Gross Domestic Product, IATP urges U.S. and EU negotiators to delete the requirement that all SPS regulations must be “least trade restrictive.” TTIP related deregulatory failures could cost a lot more than the negligible macroeconomic gains forecast by TTIP proponents over the next decade or more.