Executive Summary

The negotiations for the Transatlantic Trade and Investment Partnership (TTIP) began with a series of bold assertions that it would serve to jump start the two ailing economies, resulting in rising economic growth and job creation on both sides of the Atlantic. Tariffs are already quite low. The bigger challenge—and the real target—is the very different approaches to regulation. Past experiences with free trade, such as those under the North American Free Trade Agreement, give reasons for concern. It is impossible to accurately predict the real impacts of changes in tariff and non-tariff barriers on specific sectors of agricultural production in Maine. The bigger question may be how the changes that could result from TTIP would affect the state’s food sovereignty, i.e., farmers’ efforts to produce sustainable crops at fair prices, consumers’ demands for healthy and affordable foods, and their joint efforts to support local economies.

Food Safety: Tariffs on most crops are already very low. There are, however, some real differences in rules on food additives, pesticides and other agrochemicals that are allowed in one jurisdiction but not the other. The EU’s restrictions on GMOs and its labeling laws could come under pressure in TTIP. Any changes in those rules made under TTIP would apply to the U.S. as well as the EU, potentially limiting what is allowable under Maine law. The Maine Citizen Trade Policy Commission (CPTC) should request information from USTR, including:

• Are commitments on food safety issues such as the use of chlorine rinses of poultry, Ractopamine in meat production and diphenylamine (DPA) on fruit being discussed within the TTIP negotiations on Sanitary and Phytosanitary Standards (SPS) or Technical Barriers to Trade (TBT), and, if so, would TTIP SPS or TBT requirements limit states’ abilities to raise food safety standards?
• If those issues are not being addressed within the chapters on SPS or TBT, would they be covered under a chapter on regulatory coherence? How would regulatory coherence subordinate U.S. and Maine laws to protect public and environmental health in agriculture and food?
• Is GMO labeling being discussed in TTIP and, if so, how would any commitments made affect Maine’s GMO labeling laws?

Public procurement programs, whether for local foods, roads, or renewable energy, are important tools to strengthen local economies. Maine (along with 36 other states), the U.S. and the EU are already included in the plurilateral Government Procurement Agreement, which requires many procurement programs (but not Farm to School programs) to be open to bids from foreign companies. The EU is seeking to expand those commitments in TTIP at the state level to include all goods, all services and all sectors, potentially undermining these important programs.

• The CPTC should insist on a written answer from USTR to its questions on procurement commitments for Farm to School and other local foods programs in TTIP, as well as on the EU’s suggestion that federal grant funds used at the state level be opened up to European vendors. It might also consider sharing these concerns with other states and cities being approached by EU negotiators for procurement commitments.
• The CPTC should request information from the Governor’s office on any meetings or other communications with EU or U.S. officials on potential procurement commitments under the trade agreement, both in terms of possible risks to local foods programs and more generally to clarify the process of agreeing to those commitments at the state, county or city level. Those commitments should be the result of a fully informed public debate.

Geographical Indications establish legal protections for products based on their place of origin, specific production techniques, and the reputation of quality for those goods. The EU protects over 1,200 such products through intellectual property rights rules enforceable through trade agreements. Some U.S. GIs exist, such as Maine Lobster, which are protected by trademarks held by producers. The EU seeks to protect GIs in TTIP, potentially including cheese names such as feta, gorgonzola and munster, as it did in recent bilateral trade agreements with Canada, Central America, Peru and Korea.

• The CPTC should call on the European Commission and USTR to provide a list of the specific Geographical Indications protections sought by the EU in TTIP, as well as the U.S. response to date.
• Based on that information, the Commission could issue a request for comments or convene a hearing of Maine dairy, wine, cheese and processed meat producers on how they see their interests being affected by those protections. Their recommendations should inform advocacy by the Commission with USTR.

Dairy: Maine dairy farmers—like all American dairy farmers—have been struggling for the past decade, due to low producer prices, which are set by a complicated formula administered by the Federal Milk Marketing Order system (FMMO). FMMO prices have rebounded somewhat in the last two years, due in great part to increased demand for non-fat dry milk (NDM). It is likely that increased trade could lower the price of NDM, and in so doing, drive FMMO prices down significantly. This could prove particularly devastating to Maine dairy farms. Beyond this, Maine currently supplements payments to farms through a Dairy Stabilization Program, which could be subject to legal challenges under the trade deal as an unfair price support. It is also important to note that Maine dairy farmers, like EU farmers, do not use artificial bovine growth hormone. Depending on how the U.S. and EU deal with this issue in trade talks, the outcome may not prove beneficial to Maine farmers.

• The CPTC should request information from dairy groups and other available sources on the likely impact of increased export activity on the U.S. Class I milk price, given (in particular) the role that non-fat dry milk has in Federal Milk Marketing Order pricing.
• The CPTC should make sure trade negotiators are aware of the Maine’s Dairy Stabilization Program and its importance to Maine.
• Work with in state players (e.g., Maine Farmland Trust, Maine Organic Farmers & Gardeners Association) to alert Maine’s dairy processors (that do not accept milk with bovine growth hormones) of the possible consequences of an international trade agreement on their operations.

The establishment of common standards should serve to prohibit—rather than promote—efforts by corporations to play off regulatory standards in one jurisdiction against the other. The U.S.-EU Organic Equivalency Arrangement was negotiated outside the confines of a trade agreement. The current approach to our bilateral economic relations in TTIP is a political choice; alternatives are entirely possible. If not, if the talks are to continue along the lines of other recent trade agreements, then civil society and policy makers should seriously consider putting a halt to the TTIP until a different approach is underway.

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