Washington Insider-- Monday

Business Groups Deplore Anti-Trade Politics

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

Obama Signs Mandatory GMO Labeling Bill

Legislation creating a nationwide mandatory labeling system for foods made from genetically modified ingredients was signed into law July 29 by President Barack Obama. The legislation passed both chambers in July.

Now food companies await implementation proposals and guidelines.

The federal law will preempt any state GMO labeling laws, such as the Vermont statute that had gone into effect July 1.

The measure allows companies and producers to use QR codes, 1-800 numbers, or a text label for food products that contain GMOs.

The law requires USDA to study any potential problems consumers face with the scan code within a year after use begins.

USDA, rather than the Food and Drug Administration (FDA), will develop the implementing regulations. The standards will not go into effect for up to three years,

A likely point of contention will be making a distinction between foods with GMOs and those made with GMOs during processing but that contain nearly no trace of them in the final product.

There already are turf battles building between USDA and FDA regarding the new law. FDA said the bill's narrow and ambiguous definition of "bioengineering," would "likely mean that many foods from GE sources will not be subject to this bill" and that it "may be difficult" for any GMO food to qualify for labeling under the bill.

The label requirement will not include food products created with CRISPR, a more precise gene-editing technology.

Foods coming from livestock like beef, milk, pork, poultry or eggs do not require a GMO label, even if the animal ate feed containing GM corn or soybeans.

The law says food products receiving these labels must contain "genetic material." According to FDA, that would seem to exempt products like oils, starches, and purified proteins even if they were sourced from GE crops.

The law also says that an item is only to be labeled as genetically modified if the modification could not have occurred through "conventional breeding." The FDA raised concerns that the lack of specificity in the language could open this term up to an overly generous reading.

Anti-Pesticide Group Petitions for EPA Review of Pesticide Blends

Pesticide makers should be required to submit data on how the mixtures of chemicals in their products interact with each other, the anti-pesticide Center for Biological Diversity said in a July 28 legal petition submitted to the Environmental Protection Agency (EPA).

When several different chemicals are combined into a single pesticide product, this mixture can create synergistic effects that amplify the potency of one or several of the chemicals involved, according the petition.

The Center wants the EPA to change its data submission requirements for pesticide makers to include information on possible synergistic effects.

The issue of synergy in pesticide mixtures came up last year when the EPA discovered that Dow Chemical Co. had claimed in a patent application that the mixing of two weed-killing chemicals in its new pesticide Enlist Duo amplified each other's effects, information that Dow had not provided to the EPA during its earlier risk review.

This led EPA to take the unusual step of nullifying its own 2014 approval of Enlist Duo to give the agency another chance to review the risks the pesticides pose.

Washington Insider: Business Groups Deplore Anti-Trade Politics

To the surprise of absolutely no one, business groups are complaining that they have been "on the outside looking in during the Republican and Democratic conventions, with both parties expressing indifference or outright hostility to their top economic priorities," The Hill reported earlier this week.

The groups point to rhetorical bombs lobbed repeatedly against the Trans-Pacific Partnership (TPP), the trade deal negotiated by the President that advocates were hoping to pass after the election. The chants and anti-TPP signs became nearly a constant presence during the Democratic event in Philadelphia. Republican Donald Trump also made clear his opposition to the deal, The Hill said.

This barrage of opposition has agitated business advocates who are trying their best to fight back by plastering social media with arguments in favor of the trade deal. "We are absolutely frustrated and disappointed in both party conventions," a business source told The Hill.

President Obama wants the TPP passed before he leaves office, but Clinton and Trump are warning congressional leaders not to hold a vote during the lame-duck session after the elections.

This state of affairs is particularly irritating to Tom Donohue, the president and CEO of the U.S. Chamber of Commerce, who has criticized both candidates on trade. However, he specifically blasted the GOP's opposition to congressional votes on the TPP during the lame-duck session, saying that it is "posing a threat to the sweeping new deal with the Asia-Pacific."

With both nominees against the deal, the odds of it passing before Obama leaves office appear increasingly long, something The Hill says lawmakers have acknowledged. However, it notes that business groups are redoubling their efforts, talking to both campaigns, with House and Senate lawmakers and holding events throughout the August recess with members and companies around the country to "explain again and again what business needs in a global economy," the Hill said.

Other big business groups like the National Association of Manufacturers and Business Roundtable are pitching in with their own social media campaigns.

Amid all the anti-trade rhetoric, the urban dailies seem to have a tough time working out their positions. The New York Times, for example, seems to find it difficult to criticize arguments made by the large labor groups. "Whatever the economic merits of easing the access of American companies to world markets, a trade agenda devised to serve corporate interests is no longer politically tenable," the Times pronounces.

But, then it waffles and concludes that this may not be sufficient "to nix the Trans-Pacific Partnership," although that deal doubles down on some of these sins, "particularly when it comes to protecting the interests of the pharmaceutical industry. But it is also true that by the standards of past trade agreements, the partnership does better in looking out for the interests of workers."

It then argues that "for strategic reasons alone, walking away may be a bad idea." That is because while China may not be in the Pacific trade deal, the whole effort, to a large extent, "is about China." If allowing it into the WTO was about bringing it into the rules-based system, the Pacific trade deal establishes a ring of rules around it. It is a guarantee to China's nervous neighbors of Washington's commitment to the region and an effort to set standards for Asia's economic integration.

And, the Times argues that killing the deal would smack America's Asian allies as betrayal and "China would love it." "If the idea of retrenchment were to take hold and the TPP were to stop, it would be a blow to U.S. influence and credibility more broadly." The article cites trade experts, who say, "If the United States can't deliver, it's going to hurt legitimacy and credibility. That is going to be a pretty big stain."

So the trade fight is intensifying with some pretty strange arguments from both parties that are undermining the credibility of both. In the political arena, the argument has become almost entirely emotional, linked negatively to "corporate interests," a term that seems to many to be compelling but which is hard to explain since worker interests cannot really be divorced from those of employers.

Most likely, the argument will fade, especially as whichever side wins finds that it must govern and, since business interests probably have the resources to keep the current proposal alive. Still, such arguments are dangerous in their unanticipated consequences, and this is one that should be watched with special care.

For U.S. producers, who depend on exports for about a third of their sales—and could expand those opportunities significantly, the stakes are enormous and the risks are real, Washington Insider believes.

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