Economics for the Earth Blog

Free trade in frankenfish? Trans Atlantic free trade agreement could be a monster

Posted Apr. 26, 2013 / Posted by: Bill Waren

“Frankenfish is a 2004 monster movie dealing with genetically engineered fish in the bayou.”

­   -Wikipedia

“European Union… measures governing the importation and use of GE (genetically engineered) products have resulted in substantial barriers to trade.”

­   U.S. Trade Representative, 2013 report on sanitary measures  

In his 2013 State of the Union message, President Obama announced that the U.S. would move forward on negotiations with the European Union for the Trans Atlantic Trade and Investment Partnership, a trade deal that raises a raft of serious environmental concerns.

Based on the model of past U.S. trade agreements, statements by officials, and published documents including a U.S.-E.U. “High Level Working Group” report outlining the objectives for negotiations, it appears that the goal is to grant transnational corporations and governments expanded “rights” under the Trans Atlantic agreement to challenge government regulations before international tribunals. In its short report, the working group proposes a deal that would focus on environmental and other regulations alleged to interfere with free market efficiency, rather than traditional trade issues such as lowering tariffs. The HLWG report explicitly recommends going beyond even World Trade Organization standards in the areas of intellectual property rights, sanitary measures, and so-called “technical barriers to trade” that already vitiate environmental protections.

The U.S. Trade Representative is widely expected to use U.S.-E.U. negotiations to subvert regulations on genetically engineered products, food safety, and synthetic biology, among many others. At the same time, USTR is expected to push for provisions in the agreement that  encourage patents on human, plant and animal genes and use of cost-benefit analysis rather than the precautionary principle when setting environmental regulatory standards.

GE products: intellectual property and sanitary measures provisions

If based on the HLWG report, this Trans Atlantic free trade agreement (TAFTA) could open the door wide for gene patents, as well as trade in genetically engineered food and even products based on synthetic biology. This could threaten ecosystems, public health, and the livelihoods of small farmers, among other unintended and even frightening consequences.

The history of successful U.S. suits in the WTO challenging European policies on genetically engineered organisms and food safety under the sanitary measures agreement should be a warning. The working group’s report suggests establishing an even more rigorous review of sanitary measures in TAFTA than that currently employed under WTO rules. This could put GE and food safety regulations at even greater risk in TAFTA litigation.

Friends of the Earth believes that governments on both sides of the Atlantic should have more, not less freedom to regulate in this area. Genetic engineering of commercial products presents many known and more suspected risks to people and nature. GE products should be subject to government regulation based on the precautionary principle: in other words, the burden of proof for demonstrating a new product or technology’s safety should fall on those who would introduce it into the marketplace.

Food safety: sanitary measures provisions

Similarly, Friends of the Earth is concerned about how other food safety disputes would be treated under a WTO-plus regime for sanitary measures. Among the many areas of concern are EU food safety measures targeted as trade barriers in a 2013 USTR report, including restrictions on imports of beef treated with growth hormones, chicken washed in chlorine, and meat produced with growth stimulants (rectopamine). Another 2013 report also targets France in particular for its 2012 ban on use of materials produced using BPA in contact surfaces for food for infants and pregnant women.  .

Cost-benefit analysis & the precautionary principle: regulatory coherence provisions

The HLWG report calls for the U.S.-E.U. deal to include a cross-cutting discipline on regulatory coherence “for the development and implementation of efficient, cost-effective, and more compatible regulations for goods and services.”  In all probability, this recommendation by the HLWG contemplates something similar to the draft regulatory coherence chapter of the Trans Pacific Partnership agreement, a proposal that greatly concerns Friends of the Earth.

The leaked draft of the regulatory coherence chapter of the Trans Pacific Partnership trade agreement encourages countries joining the pact to conduct regulatory impact assessments or RIAs when developing regulations, including environmental measures, which have more than a minimal cost burden on business and the economy. Cost-benefit analysis to determine the net benefit of environmental regulations, specifically, is encouraged.   

In the view of Friends of the Earth the cost of environmental and other government regulations should not be ignored, but it ought to be looked at with a wider perspective. Calculations of seemingly definitive “ratios of benefit to costs” should be considered with balanced skepticism. Identifying and quantifying the costs of environmental regulation can be inflated by assumptions, bias of the analyst, and flaws in data gathering. Quantifying the benefits of environmental regulation can be difficult, for example because public health data is not as comprehensively collected as economic data. Or, it can be impossible: an attempt to attribute a price to the intrinsic value of human life, living things and nature itself.  In our view, cost-benefit analysis, in many circumstances, can be at odds with a fundamental principle of environmental regulation: application of the precautionary principle in the face of an immeasurable environmental risk and inescapably uncertain outcomes. 

An excellent example of an environmental issue involving uncertain outcomes that requires application of the precautionary principle, not cost-benefit analysis, is regulation of synthetic biology. While genetic engineering involves the exchange of genes between species, synthetic biology involves artificially creating new genetic code and inserting it into organisms. Synthetic organisms self-replicate. No one knows how they will interact with naturally occurring organisms or the consequences for the ecosystem as a whole.  Standard forms of risk assessment and cost-benefit analyses used by current biotechnology regulatory approaches are inadequate to guarantee protection of the public and the environment.

Friends of the Earth concerns about TAFTA, more generally

The issues discussed in this first blog post regarding GE products, gene patents, food safety and synthetic biology are only a few of the environmental concerns raised by TAFTA negotiations. Follow-up blog posts will detail many other threats.  Friends of the Earth is in the process of producing a comprehensive analysis of issues raised by the launch of TAFTA negotiations, and we will report to you, our readers, in blog posts as we finalize our research findings. To give you a preview of the breadth of environmental issues raised by these negotiations, here are several thematic concerns that Friends of the Earth has about upcoming TAFTA negotiations. In our view:     

  • Environment and labor obligations in TAFTA should be treated in a similar manner to commercial obligations: they should be enforceable through dispute resolution.
  •  In response to climate change, TAFTA should provide governments with policy space, free from the threat of trade litigation, to adopt climate change measures, such as a carbon tax, other tax measures and subsidies to encourage renewable energy, carbon and pollution regulations, and energy efficiency standards, among others.  
  • TAFTA should not facilitate the “commoditization of the commons” -- our natural resources, water, and animal, plant and human genes.
  • TAFTA should not drive a harmonization down to the lowest common regulatory denominator, especially with respect to regulation of   toxic chemicals, food safety, and GE organisms.
  • Investment disputes, such those related to mining, oil production, water, and energy services,  should be adjudicated not before arbitral tribunals biased in favor of multinational corporations, but before domestic courts and administrative bodies.
  • TAFTA should not be negotiated in secret. A public debate will either make it a better agreement or sink a bad deal.           
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