In Europe, we are currently facing the world’s “largest free trade deal” with the USA, the Transatlantic Trade and Investment Partnership (TTIP). The deal is shrouded in mystery, as negotiations are taking place behind closed doors. However, this is not the first big free trade agreement spearheaded by the USA and a look back to 1994 and the North American Free Trade Agreement (NAFTA) gives us some insight into what we might be letting ourselves in for. How concerned should we be? A look at the consequences of NAFTA for Mexico is relevant to us because NAFTA largely failed Mexico’s economy and people.
The similarities in the language around the NAFTA agreement and today’s TTIP agreement are strikingly similar. Both were described as the “largest free trade area to date” with objectives to “increase jobs and economic growth” and “expand trade and investment.” Both also involve countries that were in debt and vulnerable. Mexico, at the time, was on the verge of being internationally bankrupt and isolated, and many EU countries today are under pressure to kickstart their economies due to the long recession and austerity. Further, there was strong public opposition to both.
Tessa Tricks noted in her article for the SFT, that the TTIP agreement’s focus is mainly on regulatory barriers, as opposed to trade tariffs. Mexico provides a useful comparison for considering the impact of regulatory barriers embedded in NAFTA, and how they might reflect on the TTIP, particularly on three areas of significant relevance in current negotiations – GMOs, antibiotics and food safety.
US regulations for exporting to Mexico
The United States Department of Agriculture’s (USDA) Food Safety and Inspection Service outlines the regulations for exporting to Mexico, and they are a multinationals dream come true. The regulations are minimal, especially compared to current EU regulations which are more than twice as long. There is no special mention of chlorine washes (there is for Canada, however) no mention of GMOs and certainly no antibiotics regulations. You don’t even need an import licence to take meat across the border. All meat and vegetables, however processed, are welcome. This could be what the US is hoping the new EU regulations will look like. The US has been strongly lobbying the EU to allow the use of chlorine washes on chicken as an antimicrobial treatment, and to hasten the approval of GMOs for use in Europe, among many other regulations and practices they’d like to see eased.
The minimal trade restrictions were just the beginning of an ‘Americanisation’ of Mexican agricultural practice across the three ‘risk’ areas. Mexico famously banned the approval of further GMO corn permits last September – they did not however, ban the importation of GMO corn, which constitutes most of the US yellow corn they import. Since the high court judge ruling against GMO corn in Mexico last year, Monsanto have twice appealed, including an appeal that the judge should be replaced. Their attempts to break into the Mexican market are highlighted by the very recent opening of a Monsanto research centre in Tlajomulco, Guadalajara. This ties in with recent advice given by World Food Prize winner 2014 Sanjaya Rajaram, who said that Mexico should be cautious but not reject GMO crops, highlighting the low crop performance in Mexico compared to the US. The battle against GMOs in Mexico is a difficult one to win against powerful multinationals. What does this say for the European organisations campaigning for universal labelling of GMO products?
European critics of TTIP have voiced fears over regulations concerning the use of antibiotics in agriculture, which endanger general public health. In Mexico the use of antibiotics in agriculture is widespread practice. Antibiotics are aggressively marketed at most bovine and pork farmers, by international and US pharmaceutical companies. Whilst only the most forward looking were concerned about antibiotic use in agriculture in 1994, the NAFTA treaty meant that any future regulation could result in a multinational company suing the Mexican government. A pragmatic view of the TTIP by Karl Mathiesen in the Guardian, reminds us that EU regulations are unlikely to be decreased. However, as in Mexico, new regulations such as the ones needed in Europe to curb antibiotic use, could be appealed by international pharmaceutical companies through the new Investor-State Dispute Settlement Mechanism. This allows governments to be sued by foreign companies if new regulations are likely to negatively affect their interests.
Finally, European sceptics of the TTIP are wary of the use of chlorine washes, an antimicrobial chemical that is used to wash chicken post mortem. These washes are common practice in the USA in order to kill any bacteria on the chicken. The problem is the consumption of the acid, as well as the washes taking precedence over a focus on avoiding contamination in the first place. The practice is not explicitly recommended (although it is not explicitly discouraged) by the Mexican government to chicken processors, but the peroxyacetic acid usually used in the washes is permitted for use in chicken production. The USDA recognises Mexico as one of the countries that most demands broiler chicken, almost certainly as a result of the NAFTA deal (which brought cheap US subsidised chicken into the less subsidised Mexican market, encouraging an Americanised diet). It’s also worth mentioning that aside from the public health risk of the chlorine washes, when Mexicans buy US broiler chicken, they are also supporting an industry that pollutes the environment and has very poor working conditions for its mainly minority workforce. The chicken industry provides quite a comprehensive example of what NAFTA has meant for Mexico.
All three of the ‘risk’ areas for European agriculture will need further regulation amid new scientific evidence and increasing consumer concern. The issue with new regulations will be the TTIP clause for an Investor-State Dispute Settlement Mechanism. This seemingly undemocratic mechanism allows companies to take state governments to a special court (of 3 trade lawyers) if they feel new government regulations will have an impact on their profits. As you can see below, since the signing of NAFTA in 1994, the number of cases has soared. Source: United Nations Conference on Trade and Development
The Mexican and Canadian governments have both been taken to court and had to pay out to multinational companies. So far there have been no cases in Mexico related to the agricultural sector, but cases could still hit the headlines.
A glance at the history of Mexico’s food imports and Americanised agricultural practises post-NAFTA, provides a loud warning alarm against a similar deal for Europe. Whilst we’re only speculating on what the TTIP agreement will look like, the limited information that has so far emerged suggests it will be very similar to NAFTA. The EU’s much tougher regulations on food safety and GMO approvals are, at the very least, likely to be eroded, and any future regulation on antibiotic use in farming could be vulnerable to lawsuits. Are we willing to accept the possible consequences a NAFTA-like deal may bring? Certainly the Mexican experience is not one to be emulated anywhere. Make your voice heard in Parliament Square and around the nation at the many local protests on 11th October.
Featured image by Ibz Omar
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