Washington Insider -- Tuesday

By DTN's Washington Insider

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Canada's Freeland Lays Down Markers for NAFTA 2.0

Defending Canada's supply management system and the dispute settlement mechanism that currently exists in NAFTA are two areas that Canada will put a priority on during the coming discussions with the U.S. and Mexico, according to Canadian Foreign Minister Chrystia Freeland.

The dispute settlement situation will be one of those that appear to be a line in the sand for Freeland as related a development from the initial round of Free Trade Agreement (FTA) negotiations with the U.S. in 1987. "It was during the initial FTA negotiations in 1987 that the late, great Simon Reisman walked out, pulled home by his PM over the Reagan administration's initial refusal to agree to binding bi-national review of anti-dumping and countervailing duties," she said. "Our government will be equally resolute. Just as good fences make good neighbors, strong dispute settlement systems make good trading partners."

This could emerge as a key matter in the talks as the negotiating objectives laid out by the Trump administration included getting rid of that dispute settlement system as one of its keys. However, Freeland said that while she is "deeply optimistic" about the talks, "I think we do all need to be prepared for some moments of drama, that's going to be inevitable, and, as I also said, that happens in all trade negotiations."

The agricultural access issues could also loom large for the talks, given Freeland's position that Canada will protect its supply management programs that are in place for dairy and poultry.

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FDA To Use Enforcement Discretion on Ultrafiltered Milk in Standardized Cheeses

In a move being hailed by U.S. dairy food processors, FDA says it plans to use enforcement discretion on the use and labeling of ultrafiltered (UF) milk or UF nonfat milk in the production of standardized cheeses and related cheese products until the agency completes rulemaking on the issue.

FDA announced the new policy on Friday (Aug. 11) and plans to publish it Aug. 14.

UF milk is milk that has been filtered to remove some of the water and lactose, which increases the protein content while reducing total fluid volume, the International Dairy Foods Association (IDFA) explained in an Aug. 11 statement. The resulting protein concentrate is less expensive to ship than milk, and use of UF milk increases efficiency in cheesemaking, enhances cheese yield for cheesemakers and allows for fewer trucks on the roads, IDFA said.

UF milk is regularly used in non-standardized cheeses, but until now U.S. cheesemakers have been allowed to use UF milk in only a few standardized cheeses, including Cheddar and Mozzarella, with complex labeling requirements, IDFA said. A rule has been pending at FDA that supports the use of UF milk in all standardized cheeses, but it also includes impractical labeling requirements, the dairy group added.

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Washington Insider: Impossible Burger’s Regulatory Fight

The New York Times is reporting that the new non-meat meat, the “impossible burger,” is under regulatory examination. One of the chief selling points, says the Times about the “much ballyhooed plant-based burger patty,” is its resemblance to meat, right down to the taste and beef-like “blood.”

Not emphasized much is the source of its meat-like qualities; an ingredient produced by a genetically engineered yeast. Its meat-like characteristics have made the burger a darling among high-end restaurants like Momofuku Nishi in New York and Jardinière in San Francisco and have attracted more than $250 million in investment for the company behind it, Impossible Foods, the Times reports.

Now, questions about the product’s safety have arisen and Impossible Foods has turned to the Food and Drug Administration and asked them to confirm that the ingredient is safe. Instead, the agency said it “expressed concern” that the ingredient it has never been consumed by humans and may be an allergen, the ETC Group as well as other environmental and consumer organizations told the Times.

“FDA believes the arguments presented, individually and collectively, do not establish the safety of the burger’s secret sauce--soy leghemoglobin--for consumption,” agency officials said earlier this month. Also, they cannot “point to a general recognition of safety.”

Impossible Foods can still sell its burger despite these FDA findings, which did not conclude that soy leghemoglobin was unsafe. The company plans to resubmit its petition quickly.

So, the Times concludes somewhat snidely, Impossible Foods is finding out “what happens when a fast-moving venture capital business runs headlong into the staid world of government regulation.”

Investors like Bill Gates and Khosla Ventures have poured money into a variety of so-called alt meat companies. And, Silicon Valley firms claim noble goals, applying technological solutions to address major issues like climate change, farm animal welfare and food security.

But food is not an app. It is far more heavily regulated by governments and much more heavily freighted with cultural and emotional baggage, the Times opines.

“This rush to market is the Silicon Valley mind-set,” said Michael Hansen, a food safety expert who is the senior staff scientist at Consumers Union, an advocacy group. “They think because they’re doing something disruptive, the regulations that apply to other companies don’t apply to them.”

Impossible Foods was started in 2011 by Pat Brown, a biochemist at Stanford University, who was able to attract venture capitalists. The company sought to woo top chefs with a splashy sales pitch about how the burger mimicked the aroma, attributes and taste of real beef.

Within three years of its founding, Impossible Foods landed big-name investors like Khosla, Mr. Gates and the Hong Kong billionaire Li Ka-Shing. Recently, Temasek Holdings, Singapore’s sovereign wealth fund, joined an investment round that added $75 million to the company’s coffers.

“I love VCs and particularly the ones that invested in us,” Mr. Brown said at a TechCrunch conference in May, referring to venture capital firms. “But it’s truly astonishing how little diligence they do in terms of the actual science that underlies some tech companies.”

The FDA’s approval is not specifically required for new ingredients. Companies can hire consultants to run tests, but they have no obligation to inform the agency of their findings, a process known as self-affirmation. Impossible Foods used that approach, concluding in 2014 that soy leghemoglobin was safe. But it went further, seeking the regulator’s imprimatur.

The FDA, however, pressed the company to more specifically show the ingredient safe for humans. It told Impossible Foods to establish the safety of the more than 40 other proteins that make up part of its soy leghemoglobin.

“This product has been touted as the ‘secret sauce’ in the Impossible Burger,” said Jim Thomas, program director at the ETC Group, the Canadian environmental organization that started the Freedom of Information request. “Now we know that the FDA had questions about it, but it was put on the market anyway.” Impossible Foods claims it has tested its ingredient and used experts to demonstrate that the ingredient was safe.

It also appears that this dispute is not doing FDA any favors. Consumer advocates say the experience of Impossible Foods highlights longstanding concerns about FDA’s oversight of food safety. A study by the Pew Charitable Trusts in 2013 found that the FDA was unaware of roughly 1,000 of some 10,000 ingredients used in food because companies had used the self-affirmation process. And in May, the Center for Food Safety and other groups sued the FDA over that process.

“The exemption was meant to cover ingredients that had long been used in the food supply, so that companies didn’t have to come in every time they made a new product,” said Tom Neltner, chemicals policy director at the Environmental Defense Fund, an advocacy group that is one of the plaintiffs in the lawsuit. “It wasn’t meant to allow companies to simply bypass the FDA”

So, it is not clear what kind of report card the I-burger will receive from FDA. And, there also is the possible reaction of the anti-GMO crowd in terms of the outlook for the I-burger itself. These folks don’t tend to have strong links to elitist chefs, but will certainly weigh in if the burger comes to local retail chains.

So, it seems the impossible burger may, in fact, be somewhat less possible than was thought only a few weeks ago, with its future, like that of most new products, remaining in the hands of local consumers—who are often very hard to please, Washington Insider believes.

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