The NAFTA talks are advancing rapidly with very little information available to the public on their content or the possible consequences for fair and sustainable food and farm systems. IATP is aiming to stay on top of the process, and our Senior Attorney, Sharon Treat, will be in Toronto this weekend for the third round of negotiations. This is the second in a series of blogs examining the proposals being made by agribusiness firms that take the failed Trans Pacific Partnership as a starting point. The first blog in the series focused on proposals that could be used to delay and repeal public interest protections. Next week’s blog will take a look at corporate proposals on agricultural biotechnology in NAFTA 2.0.
One of the fundamental problems with the talks to “modernize” the North American Free Trade Agreement (NAFTA) is the utter lack of transparency in the negotiations. In this context of increased secrecy, there are signs that the complex and often controversial process to set standards for organic agriculture could be subsumed into the black box of the trade rules. This could affect not only the volume of organic products being traded among the three countries, but the nature of future standards on the kinds of technologies and techniques permitted for organic farming.
Past trade negotiations with the EU and Asian countries have been criticized for (among other things) inadequate consultations with stakeholders from various sectors, but the NAFTA talks take that secrecy to a new level. No public stakeholder events to hear views from citizen groups, no question and answer sessions at the end of the talks, just a big insider club at the negotiating rounds for Trade Advisory Committee members (nearly all from corporations), and lots of speculation and rumors about what’s really being negotiated.
That said, it is clear what various sectors want out of the deal. The administration presented its list of negotiating objectives at the start of the talks and issued a request for comments on what should be included in the NAFTA talks. More than 12,000 of those comments, ranging from a few sentences to comprehensive policy proposals, have been published online.
Among those comments are several that propose to harmonize standards in organic agriculture. The North American Working Group of the Food and Agriculture Trade Dialogue calls for a new chapter on regulatory cooperation in the trade deal that would address differing standards on pesticides, organic agriculture and agricultural biotechnology. That coalition includes dozens of major commodity associations and agribusinesses, many of which are developing lines of organic production. Two of its members -- the Corn Refiners Association and Campbell Soup Company -- submitted comments echoing those proposals on organics.
Sharon Treat explained the proposal for regulatory cooperation in an earlier blog. Briefly, this proposal aims to align standards between countries so that they are as similar as possible, increasing trading opportunities and reducing business costs. It would give industry stakeholders preferred access in a non-transparent process to encourage additional cost-benefit analyses of regulations and review of measures to ensure that new and existing standards do not place “unnecessary” burdens on trade. Voluntary standards would be encouraged over mandatory policies such as labeling. This relatively new concept was included in the Trans Pacific Partnership (TPP) as a mainly voluntary process. A much more ambitious and binding proposal was being discussed in the Transatlantic Trade and Investment Partnership (TTIP, currently paused). That proposal raised alarms for consumer groups, environmentalists and public health advocates, as well as state legislators concerned that it could create new obstacles to better rules.
Consumer demand for organic foods has increased dramatically to nearly $50 billion in annual sales. This has created tension between producers and consumers interested in strong standards and food and feed companies (especially conventional companies with organic lines) that would like to satisfy the new demand with cheaper products produced with weaker standards. The National Organics Standards Board (NOSB), for example, is currently considering new rules on whether hydroponic (water based) or aquaponic (fish based) production of fruits and vegetables should be allowed as organic (those practices are banned in Mexican and Canadian organic standards). In 2010, the NOSB ruled that soilless production is not consistent with organic production. More recently, a heated debate has emerged on whether to revise that guidance to allow some kinds of water-based production with added nutrients. The NOSB was unable to reach a decision on the issue its November 2016 meeting, but will be taking it up again in late October.
Earlier this year the NOSB approved new animal welfare standards in organic meat and poultry production that could help to eliminate inhumane and highly polluting factory farms. The National Pork Producers Council vowed to challenge that process, and the rulemaking seems to have ground to a halt, leading to a lawsuit by the Organic Trade Association over the administration’s inaction. Rules on the use of nanotechnology in organics have also been debated and will no doubt emerge again.
Including organic standards in a regulatory cooperation chapter in NAFTA would create new obstacles to rules to ensure the integrity of organic standards. On top of the debates at the NOSB, it would empower a trinational commission to add new layers of cost-benefit analyses. In the case of organic standards, the benefits are not only about a better food product but also about environmental protection and other qualitative factors that simply wouldn’t fit with that kind of study. It would also consider the possible trade impacts of changes in standards, which, again, misses the point. Trade in organic goods might make sense in some cases, but facilitating trade shouldn’t drive the standards.
The Organic Trade Association, which tends to represent the largest producers, took a more moderate approach in its comments, instead asking USTR to “maintain and protect the organic equivalency arrangement with Canada; and allow for direct negotiation on the Mexico organic equivalency arrangement outside of NAFTA.” Currently, Mexican organic exports to the U.S must be produced according to U.S. standards and certified by U.S. accredited inspectors.
The U.S. has already negotiated equivalency arrangements with Canada, the European Union, Switzerland, Japan and South Korea (in that case, for processed organic foods). These deals allow products certified as organic in one country to be sold as certified organic in another and explicitly acknowledge areas where the standards differ. EU organic wine, for example, is excluded from the US-EU arrangement because of its use of sulfites, which are banned in U.S. organic standards. These arrangements have resulted from years of negotiations and examination of organic standards, practices and enforcement and have built-in workplans to review progress and consider updates every few years. They could certainly be improved. A recent assessment of USDA’s organic programs by the Office of the Inspector General (OIG) found a lack of transparency in the documentation of the differences among other countries’ standards in these arrangements. In addition, the process of negotiating the arrangements should be opened up to participation from a much broader range of stakeholders, but they do represent a more measured, cautious approach, and one that can be revised in the future.
Apart from the decisions around which standards are needed is the issue of the enforcement. The Washington Post documented imports of soybeans with pesticide residues from Turkey that somehow left the country as conventional products and along the way morphed into “organic” through false documentation (a problem the OIG also flagged). To be clear, this problem is not limited to imports: the Post also reported on questionable activity in domestic organic milk production (especially access to pasture). Other provisions in the trade deal could limit oversight by increasing the volume of imports while undercutting inspections. The Rapid Response Mechanism in the TPP empowers importers to second-guess inspectors’ decisions. That’s a provision the Food and Agriculture Trade Dialogue and the National Oilseed Processors Association (also a member of the Dialogue) among other agribusiness firms, would like to import into NAFTA. Likely funding cuts for enforcement of organic standards and food safety generally would create additional pressures to allow imports with minimal inspections. This is a risky bet; without consumer confidence in the integrity of the standards, the organic market could crumble.
There are very real debates in each country about the nature of organic standards and values involved in that production, as well as constant scrutiny of enforcement. The inclusion of organics standards within NAFTA, especially in a chapter on regulatory cooperation, would take those decisions even farther away from consumers and farmers and would set a dangerous precedent for future trade talks.
