Washington Insider--Tuesday

Trade and the UN Development Agenda

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

California First State to Require Vet Approval for Antibiotic Uses in Livestock

California Gov. Jerry Brown has signed Senate Bill 27, which will make his state the first in the nation to require a veterinarian's prescription for therapeutic antibiotic uses in livestock, ban other uses (including low-dosage levels used to prevent diseases), and require that data be collected on antibiotic use.

In his signing message, Brown stated, "SB 27 addresses an urgent public health problem. The science is clear that the overuse of antibiotics in livestock has contributed to the spread of antibiotic resistance and the undermining of decades of life-saving advances in medicine."

The bill also includes provisions about growth promotion and veterinary oversight, but it went even further by not allowing the regular pattern of use for prophylactic purposes.

The new law, which takes effect on Jan. 1, 2018, also requires the California Department of Food and Agriculture to start a monitoring program "to gather information on medically important antimicrobial drug sales and usage, antimicrobial resistant bacteria, and livestock management practice data."

Those opposed to the law include groups such as the California Cattlemen's Association, who say they are concerned how some ranchers will have access to antibiotics, especially in rural areas. However, the association decided to remain neutral on passage of the bill in exchange for certain changes, the LA Times noted in a report.


European Parliament to Vote on New Regulations Governing Imported and Locally Grown Organic Food

The European Parliament's Agricultural Committee is set to vote Oct. 13 on a European Commission (EC) proposal that foresees extensive changes to rules governing imported and locally grown organic foods. Committee members will also vote on a proposal to begin negotiations with the EU Council. Once those talks start, the Parliament and Council begin to define the final piece of legislation.

On imports, the European Commission proposal calls for trade agreements -- like the Canada and European Union Comprehensive Economic and Trade Agreement (CETA), the Transatlantic Trade and Investment Partnership (TTIP) and a trade deal being negotiated with Japan -- to be in full compliance with EU organic regulations.

On certification thresholds, the commission is proposing tighter controls that would make it harder for organic farmers whose crops have been contaminated by trace amounts of pesticide residue from nearby non-organic producers to market their goods as organic.

Groups representing EU organics traders are against this proposal because they say it conflicts with their goal of using trade in organic raw materials from developing countries as a means of helping promote sustainable economic development.

Organic farmers' lobbying groups say this regulation effectively punishes the organic supply chain rather than non-organic producers who inadvertently taint the organic supply chain.

The commission's proposal could have an impact on EU-US trade in organic foods and raw materials, which is governed by an equivalence arrangement signed in 2012. The commission considers the 2012 organic equivalency arrangement "a self-standing agricultural agreement based on mutual recognition of each side's organic standards."


Washington Insider: Trade and the UN Development Agenda

JB Penn is John Deere's chief economist and frequently speaks and writes broadly on food, trade and productivity, among other issues of importance to the agricultural industry. Recently, The Hill in Washington published his article on U.N. goals on global growth and sustainability.

He notes that the U.N. General Assembly recently moved to adopt formally the 2030 Agenda for Sustainable Development, a document that touches on issues from eradicating hunger and poverty to achieving gender equality and to combating climate change and its impacts. He believes "this new set of global goals charts a path toward a sustainable future" for the world's people.

Penn said that during the ceremony installing the goals, the Secretary General Ban Ki-moon said the agenda will "compel" us to look beyond national boundaries and short-term interests and act in solidarity for the long-term. He thinks that the same is true of global trade -- an essential development to support the goal of "sustainably feeding" the more than 9 billion people that will inhabit our planet by 2050.

Penn noted that his observations come in the midst of disappointment, as the economic breakouts expected for the global economy this year have not materialized. WTO economists now have reduced their estimates of commercial economic growth for 2015 to 2.8% and this will be the fourth consecutive year of trade growth below 3%, the result of economic slowdowns in several key countries.

For example, he noted that China is dealing with significant volatility in its stock market and its currency is down some 4.4% against the U.S. dollar. This may foretell a "new normal" growth rate of around 7% over the future in contrast to decades of double-digit growth, a significant down-shift of a major engine of global growth.

Other countries are experiencing similar struggles, he said. Brazil's economy is in recession, fighting inflation, rising unemployment and a 6-year low in the stock market.

There are other examples, but the key change is that the impacts of these downturns are no longer local -- the impacts of even modest setbacks can be felt around the world. When the second largest global economy, China, encounters slower growth, that change affects all the markets that trade and invest with China -- so, Japan, Taiwan, Australia and other trading partners are immediately affected.

The impact of these economic downturns often have outsize impacts on countries with growing food demands but which are already struggling with food insecurity and who rely on the movement of food and agricultural products around the world. To help reduce these economic and social pressures, the world must "improve the system; strive to make trade more open and equitable" between food deficit countries and the surplus producers, Penn believes.

These represent difficult economic and food security challenges that require both the expansion of global trade and further removal of tariff and non-tariff barriers. Penn thinks that global leaders are increasingly committed to work toward the completion of trade agreements that will be essential to the realization of Secretary General Ban Ki-moon's challenges for the future.

Penn sees both the newly-concluded Trans Pacific Partnership and the Transatlantic Trade and Investment Partnership as having potential to expand markets, increase investment, and generate jobs on both sides of the Atlantic. His message is that each of these agreements, along with continued multilateral trade liberalization efforts, is critical to rebuilding our global economy and, in turn, helping ensure that we will be able to feed the growing planet.

He urges agricultural interests to press policy makers and "leaders in the U.S. and across the world to move beyond our parochial protectionist instincts and to keep the global good firmly in sight."

Penn's message is well beyond the typical urge for support for trade deals that enhance both sides. He argues that only with a more efficient industry built on growing productivity and enhanced by the efficiencies from increased supply and demand interaction supported and smoothed by trade can we hope to meet future needs as they emerge.

This is not a new argument, but it is one now strengthened by the U.N.'s forward-looking Development Agenda for 2030. In that context, its challenge to look beyond national borders will be extremely difficult for global policy makers to ignore, Washington Insider believes.

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