Washington Insider -- Monday

By DTN's Washington Insider

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

Administration Changes TPP Sales Pitch

The Trans-Pacific Partnership deal currently being negotiated among 12 Pacific Rim nations is unlike earlier free trade agreements in that environment and labor issues are at its core, not on the periphery, says to U.S. Trade Representative Michael Froman. "TPP is not your father's free trade agreement," Froman said in remarks last week to the President's Export Council. "This is a new type of trade agreement, whereas instead of having labor and environment provisions as side agreements, afterthoughts, they're at the center of the agreement and they're stronger than ever before."

Froman's remarks are clearly aimed at placating congressional Democrats and their allies among labor unions and environmental groups that have mounted increasing opposition to TPP. The USTR said that in the talks, the United States is seeking to make labor and environment provisions binding commitments that are subject to dispute settlement.

Froman and the administration have a tough job ahead of themselves in convincing current TPP opponents to drop their objections. As a consequence, the negotiations may continue, but wrapping up an agreement looks increasingly like it will take far longer than earlier anticipated.

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House Republicans Expected to Fight USDA Healthy Lunch Rules

The House this week is scheduled to resume work on an appropriations bill that Republicans are expected to use to roll back school-lunch nutrition requirements passed in 2010. Among other things, the GOP believes the rules are costing local school districts too much and are an example of the federal government trying to micromanage what children eat.

The legislation under consideration would fund USDA, the Commodity Futures Trading Commission and the Food and Drug Administration during fiscal 2015, which begins Oct. 1, 2014. The USDA appropriations bill includes a Republican-sponsored provision that would allow some school districts to opt out of the healthy-food mandates, which call for more fresh foods and fewer calories. Under that provision, schools that can prove they're losing money on their school lunch programs can get a one-year waiver from the federal rules.

There is no similar provision in the Senate version of the appropriations measure, meaning that even if the opt-out proposal is approved by the House, it faces an uncertain future both because the Senate is controlled by Democrats and because an expected House-Senate conference on the overall bill could drop the opt-out provision.

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Washington Insider: Food Labels in Court

An increasingly bitter fight over requirements for GMO labels on foods is erupting in federal district court in Vermont. As promised, the U.S. food industry, led by the Grocery Manufacturers Association, recently filed a suit to challenge the new state law requiring labels on some genetically modified foods. The association, joined by the Snack Food Association, the International Dairy Foods Association and the National Association of Manufacturers, previously announced that it would take such a step to contest the requirement, which was signed into law in early May and is slated to take effect in July 2016.

The industry asserts that Vermont's mandatory GMO labeling law is a costly and misguided measure that could lead to a 50-state patchwork of labeling policies "that do nothing to advance the health and safety of consumers."

Vermont lawmakers earlier made a very strange claim that their legislation is "lawsuit-proof" because there's a "state interest in requiring labels due to health concerns" whether warranted or not. How that could be a basis for requiring expensive labels certainly will be examined in the litigation.

Initially, at least, the grocers' group will challenge the law under the First Amendment, saying it "imposes burdensome new speech requirements," and under the Commerce Clause, saying the Constitution prohibits a state from "regulating nationwide distribution and labeling practices that facilitate interstate commerce."

Perhaps a more substantial charge is that "Vermont has effectively conceded this law has no basis in health, safety or science," the association said. "That is why a number of product categories, including milk, meat, restaurant items and alcohol, are exempt."

Independently, the food industry is backing a bill introduced in the U.S. House of Representatives by Rep. Mike Pompeo, R-Kan., that would pre-empt states from passing their own labeling measures. At the same time, congressional sources are skeptical that the Pompeo measure will pass because some charge that it would expand the Food and Drug Administration's authority and possibly face charges that it tramples states' rights.

Prospects for the case are muddied somewhat by the recent U.S. Supreme Court ruling that allowed POM Wonderful to sue Coca-Cola Inc. over its Minute Maid juice product that includes negligible amounts of the juices it claims on the label. The argument is that this could make it easier for food and beverage companies to self-police, according to advocacy groups. However, it could also raise questions regarding Vermont's unsubstantiated and undefined interest in health claims, observers note.

The Center for Science in the Public Interest trumpeted that the recent Supreme Court ruling "is a clear and unequivocal victory for consumers as well as competitors." The CSPI statement also claimed that "The Court recognized that companies don't have a safe haven from being sued for deception just by complying with FDA's minimal regulations."

An appeals court had ruled that POM's claim against Coca-Cola under the Lanham Act, which allows companies to sue each other over unfair competition, was preempted by the Food, Drug and Cosmetic Act. CSPI joined the Public Citizen Litigation Group, Consumers Union and the Consumer Federation of America in filing a brief supporting POM's right to sue. "In allowing Lanham Act suits to go forward, the court has given its blessing to a valuable tool for companies to patrol their competitors' products for just this kind of commonplace deception," said CSPI.

What the organization didn't say is how this affects the food companies' capacity to litigate laws that proclaim state health interests in spite of earlier assertions that no health risks are involved, observers note.

So, the case of grocers versus Vermont will be both interesting and important, especially since it could be expected to focus on consumers' widespread claims regarding undefined and unspecified "consumers' rights to know." If this litigation can focus this label controversy clearly on how consumers' rights to information are defined and constrained. It likely would go a long ways toward limiting many of the extravagant, unsupported claims of benefits from even vague labels — claims being advanced frequently nowadays, Washington Insider believes.

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