Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.EU, US Close to Resolving Key TTIP Differences
Agreement on the topic of an investor-state dispute settlement (ISDS) system, and an imminent highly anticipated U.S. offer on liberalizing public procurement restrictions, has the potential to bridge major gaps between U.S. and European Union (EU) trade negotiators on the contours of a Transatlantic Trade and Investment Partnership (TTIP) trade deal.
EU and U.S. trade officials appear to have come to an agreement on a set of common goals for the investment protection chapter of TTIP. EU proposals for a reformed investor-state dispute settlement (ISDS) system – which the U.S. had resisted in the past – now see negotiators on both sides coming to common ground on the matter. The ISDS proposal is also expected to serve as a framework for dispute resolution questions in future trade deals.
A long-awaited U.S. proposal on opening public procurement to EU-based companies is expected to be unveiled at the 12th round of TTIP talks, taking place Feb. 29 - Mar. 2. Access to federal, state and local public procurement has been a major ask made by EU negotiators and has played a large role in recent TTIP negotiations.
U.S. lawmakers are looking to weigh in on trade agreements and how they are implemented, with Senate Finance Committee Chairman Orrin Hatch, R-Utah, announcing a Mar. 3 hearing on the implementation of free-trade agreements (FTAs) already on the books. The hearing will look to gather lessons from the impacts of past agreements and how they might factor into the ongoing debate over the Trans-Pacific Partnership (TPP). Agreement enforcement is expected to be a major topic of discussion at the hearing.
***Agreement Announced Between Argentina, Creditors
Argentina and its bond holders have reached a $4.65 billion agreement in principle to settle the 14-year old dispute over sovereign debt defaults, court-appointed mediator Danila Pollack announced in New York.
The agreement between the Argentine government and the four largest remaining holdout creditors represents 75% of their full judgments, including principal and interest, Pollack said. “This is a giant step forward in this long-running litigation, but not the final step,” Pollack said in a statement. “The Agreement in Principle is subject to approval by the Congress of Argentina and, specifically, the lifting of the Lock Law and the Sovereign Payment Law, enacted under an earlier Administration and which would bar such settlements.”
Federal Judge Thomas Griesa has presided over the battle and on Feb. 19 he dealt the bond holders a setback in agreeing to lift an injunction that has prevented Argentina from raising new money in bond markets. The ruling by Griesa was based on two conditions – Argentina would repeal its domestic law that barred payouts to the bond holders and it has to make full payments to those that settled with the country by Feb. 29.
Pollack also said Argentine Economy Minister Alfonso Prat-Gay played a key role and had “involved himself intensely with me over the past several weeks.” Further, Pollack said that Argentina’s new government had made an “heroic” course correction in the matter.
Argentine President Mauricio Macri pledged in his campaign to resolve the dispute with bond holders and appears to be close to delivering on that pledge. Macri’s predecessor vowed the country would never pay the bond holders, labeling them “vultures.”
Key going forward are the details to get the matter resolved and once those are in place, it will open up options for Argentina to seek funding on the global stage, funding that could prove critical for the country as it seeks to bolster its economy. Increased funding would help Macri improve the country’s situation without having to make sharp spending cuts that have proved unpopular with Argentine citizens in the past.***
Washington Insider: Thinking About GMO Labels
This week, the Senate is expected to take up the issue of GMO labels and The Hill is carrying a letter from an ag industry executive, John Bode, president and CEO of the Corn Refiners Association, who raises serious concerns about the issues at stake.
Bode begins by asserting that the debate is not about food safety but market share because there has been no credible showing that any safety issues exist. Bode thinks the main driver is the interest from certain parts of the organic food industry to make some products compete against “a label that scares consumers.”
In that fight, Bode argues, even truthful GMO labels work “brilliantly” to create a competitive market advantage but are “misleading.” Consumers perceive a government-mandated label statement as a warning, he says, and points to testimony before Congress by the chief lobbyist for “Just Label It” in which he acknowledged that foods produced with biotechnology are safe, even as “backers of mandatory labeling continue to push a contrary notion.”
This fight has been underway for years, Bode says, but this time it is different. After citizen referendums in California, Colorado, Washington and Oregon rejected mandatory labels, the small state of Vermont passed a law “that would affect not only Vermonters, but American shoppers in every corner of the United States,” and will go into effect July 1, 2016.
Bode charges that the Vermont law was carefully structured to reshape the national food supply, but not have major impacts on Vermont because it exempts key local products, including cheese and maple syrup as well as “two-thirds of all food sold in Vermont.”
Vermont achieves this by imposing its labeling requirement on the manufacturers of food sold in Vermont, so “manufacturers generally must change their ingredients or label all non-exempt food.” If Vermont had not been trying for national impacts, “its GMO labeling requirement could have been applied to Vermont food retailers as other effective food labeling requirements do.” Bode argues.
At least for the products Vermont did not exempt, that would have been just as effective. So, Bode thinks the wider impact was purposely sought by its financial supporters. He quotes Andrew Kimbrell, executive director of the Center for Food Safety as declaring, “We are going to force them to label this food. If we have it labeled, then we can organize people not to buy it.”
Bode then asserts that “tiny Vermont’s GMO labeling law is projected to hike the average American household’s food costs by almost $1,100 over the next year,” with the heaviest impact on low-income households. Thus, Bode and his organization are supporting Senate Agriculture Committee Chairman Pat Roberts R-Kan., in the effort to regulate food label requirements.
For the $1,100 figure, Bode cites a study his organization released that stated the Vermont label could cost consumers a range between $50 and $1,100 a year.
Clearly the gloves have come off in this fight, especially as the arguments have become more complex. Bode’s assertion that the Vermont law would have nationwide impacts on food costs -- at the same time it excludes important local products -- appears to raise powerful issues of fairness and may resonate in the current debate, as similar charges did in California and other states where labeling proposals were defeated.
Still, mandatory labels are popular among many consumer advocate groups, so the debate will be intense and outcome may possibly be closer in the Senate than it was in the House. This is an important fight for producers and should be watched carefully as it proceeds, Washington Insider believes.
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