Washington Insider -- Thursday

By DTN's Washington Insider

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

EU, Mexico Accelerate Trade Talks Over Global Protectionism

The European Union (EU) and Mexico announced they will accelerate their trade talks because of "the worrying rise of protectionism around the world."

Countries are keen to ink new trade agreements with the EU after President Donald Trump announced that the U.S. is pulling out of the Trans-Pacific Partnership (TPP) and wants to renegotiate the North American Free Trade Agreement (NAFTA).

Mexico, part of both NAFTA and the TPP, has been among the countries showing the greatest interest in talks with the EU, European Trade Commissioner Cecilia Malmstroem said last week.

"Now is the time to build bridges, not walls," the European Commission tweeted as it announced the accelerated EU-Mexican trade talks, likely referring to the wall Trump wants to build on the Mexican border. "Together, we are witnessing the worrying rise of protectionism around the world," Malmstroem and Mexico's Economy Minister Ildefonso Guajardo Villarreal said in a joint statement. "Side by side, as like-minded partners, we must now stand up for the idea of global, open cooperation. We are already well underway in our joint efforts to deepen openness to trade on both sides. Now, we will accelerate the pace of these talks in order to reap the benefits sooner."

In December, the European Commission published a set of proposals for an updated FTA, covering six key topics which the EU sees as key to reducing regulatory barriers and improving what is already a strong trading relationship, according to reporting by Agra Europe. In terms of agriculture, the proposals include references to sanitary and phytosanitary issues, animal welfare and mutual recognition of geographical indications.

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US Agriculture Groups Urge Trump to Fight Canadian Milk Rule

State-level agriculture officials in the U.S. adopted a provision calling on the Trump administration to confront Canada over its dairy trade policy during a meeting of the National State Departments of Agriculture (NASDA) in Washington.

February 1, Canada implemented nationwide a new category for milk products that would allow the country's dairy processors to purchase nonfat milk solids at a subsidized price. Dairy groups and NASDA say that the move violates World Trade Organization (WTO) and North American Free Trade Agreement (NAFTA) obligations and would drive down global dairy prices.

"There is a growing frustration over a period of time with what I would call 'gaming the system,' and it seems like there is always some province out there, some group, that is trying to find a loophole and then we have to come back and re-address these issues in a tri-national court," North Dakota Agriculture Commissioner Doug Goehring said at the meeting.

State agriculture officials also opposed rules requiring that the U.S. wheat that Canada imports be classified as the lowest grade, feed wheat, saying it essentially barred U.S. growers from the Canadian market.

Meanwhile, in January, the U.S. Trade Representative filed a WTO claim against Canada, saying that the country's regulations discriminate against the sale of U.S. wines in Canadian grocery stores.

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Washington Insider: Animal Welfare Labeling Problems

The New York Times is carrying a surprisingly critical article on animal welfare labels this week. It is surprising since the Times seems generally to approve animal welfare requirements. The article says that the labels have become confusing and that many are largely "commercial" with little effort to define or enforce standards that might be expected.

For example, the article says, shoppers buying eggs not only have to decide whether they want organic, free-range or cage-free, but also must choose among labels like "American Humane Certified," "Animal Welfare Approved" and "Certified Humane." It notes that labels "are spreading like kudzu on packages of meat and eggs in the refrigerated cases of grocery stores." They are intended to assure shoppers that the cattle, pigs or chickens were treated well, but may just as easily sow confusion or even mislead shoppers, who probably know little about the organizations that create most labels and how they police the food producers that use them.

Perhaps the central observation of the long article is that consumers are "looking behind the barn doors at these factory farms and 'don't like what they're seeing," the Times says.

Even the American Society for the Prevention of Cruelty to Animals, which created a website to help navigate the labels, says it has problems because "when consumers reach the grocery store, they're faced with a profound lack of transparency, accountability and, in some cases, downright deception" from statements on packaging about humane treatment of animals.

So the article lists what it calls some basic facts. It says most of the labels come from three groups — the American Humane Association, Humane Farm Animal Care and A Greener World — that set their own standards for the practices needed to win certification. While food companies pay fees to use the labels, the phrases on the labels have no "set meaning."

In fact, the federal government has no rules for words like "humane." The term "free-range" on a product, for example, does not necessarily mean that an animal had access to pasture, the Times says.

USDA does offer guidelines to meat producers, and requires them to submit applications and get permission before using terms like "humanely raised" or "raised with care" on packages. But even that organization does not send out inspectors to test those claims. "It's just a paperwork review," Dena Jones, the director of the farm animal program of the Animal Welfare Institute told the Times. "A producer has to fill out a very simple form, one page, two sides, and submit some supporting information." That may be a one-sentence affidavit declaring something like, "I take good care of my animals," she said.

Jones's group would like the federal government to require that all companies do the same, but even that would not be ideal. "Not all certification seals are created equal," said Andrew DeCoriolis, a program director at Farm Forward, an animal advocacy group. "Companies can essentially pick the standards that are the easiest for them to meet." For example, DeCoriolis and other animal welfare advocates say they are not surprised that the largest of the certifying groups is the American Humane Association, the group behind the "American Humane Certified" seal because its standards are "less rigorous than other groups" and therefore preferred by meat companies.

In May, American Humane stirred concern among other animal welfare groups by hiring as its director of marketing a lobbyist from Berman and Company, a public relations firm that is waging a forceful campaign against the Humane Society of the United States and People for the Ethical Treatment of Animals. Other groups also are struggling to define standards they can achieve.

Such nuances make parsing the various labels difficult for shoppers and increasingly contentious, the Times says. Last year, a class-action lawsuit was filed against Foster Farms, a large poultry producer, questioning the "American Humane Certified" label on packages of its chicken. The AHA standards that Foster Farms purports to follow in order to attain "humane certification" from the AHA permit and even necessitate inhumane treatment on their face, asserted the plaintiffs.

Well, while the Times paints a dismal picture of the value of animal welfare labels, it has little real advice for what the industry—or the government—should do. Clearly, the unregulated use of undefinable terms suggests that the market is now chaotic. Some would argue that this problem suggests that the food industry should respond with rules that severely limit the use of such labels to characteristics that can be defined.

Clearly, this is a debate that will be both contentious and long and should be watched closely by producers as it proceeds, Washington Insider believes.

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