Sector News

Enormous trade deal could upend the global food industry

October 7, 2015
Consumer Packaged Goods

A full third of global trade will have some 18,000 tariffs lifted, thanks to the Trans-Pacific Partnership, the massive free-trade agreement that representatives of 11 countries have reached after seven years of on-again, off-again negotiations. The Monday announcement makes the maligned trade deal, which as been in the works for nearly a decade and could affect 40 percent of world GDP—$27.5 trillion worth of goods—that much more likely to become a reality.

The details of the trade deal, however, remain a secret.

Congress will have 30 days to read it, after which it will be made public. Thanks to the fast-track legislation Congress passed earlier this year, members of the House and Senate will not be able to amend or filibuster the deal—but they still have to pass it for the trade deal to go into effect.

While the deal touches on all types of goods, from textiles to lumber to tech products, past trade deals, including 1994’s North American Free Trade Agreement, have shown that such pacts can change the food industry drastically. Critics are concerned that the TPP’s upsides will only be for multinational agribusiness firms and that consumers could be put at risk.

“We believe the Trans-Pacific Partnership will allow food to move more freely across borders from places of plenty to places of need, which benefits farmers and consumers around the world,” said David MacLennan, the CEO of Cargill, in a statement. The ag giant operates in 67 countries and has its eye on some of the “500 million new customers in Asia” mentioned in its press release. Same goes for the likes of Monsanto and other major food companies that already have a large international presence.

But it’s that increased expansion of such ag giants that is a major concern of those who work on the environmental sustainability of agriculture, which accounts for as much as 30 percent of global greenhouse gas emissions.

“While this trade agreement has been negotiated in secret, what we do know should concern those who care about fair and sustainable food systems,” said Karen Hansen-Kuhn, director of international strategies at the Institute for Agriculture and Trade Policy, which advocates for sustainable ag policy in the face of globalization, in a statement. “Multinational agribusiness companies wanted this deal—it provides them a framework to lower regulations and expand their market power. Unfortunately, that same framework has proven to be a bad deal for farmers, consumers, and the environment.”

Bernie Sanders, Hillary Clinton, and Donald Trump are among the presidential hopefuls who have criticized the deal.

The broad strokes of the deal that have been made public promise that, in addition to lifting tariffs, countries involved will commit to reforms—including “eliminating agricultural export subsidies”—to promote trade. But that approach will create some domestic losers too, with countries moving away from local, protected production of meat, dairy, and other ag products to cheaper imports. The Canadian government is promising to pay farmers $4.3 billion over 15 years to compensate for the sales they’re expected to lose.

For American consumers, who have become accustomed to eating significant amounts of Mexican produce over the past 20 years, one of the biggest changes might involve seafood. Vietnam has a $5 billion aquaculture industry, and the U.S. has a big appetite for cheap, farmed shrimp—the shellfish is the U.S.’ most popular form of seafood, and we import more than half a million tons of it annually. But between 2008 and 2012, just 3 percent of the seafood imported from Vietnam was inspected by the FDA, according to Food & Water Watch, despite fish and shellfish being a leading cause of food-borne illness. The extensive shrimp ponds have been built at the expense of coastal mangrove habitat—which is important for both wildlife and carbon sequestration.

“When you add all these various free-trade agreements together, you’re getting a lot more product coming in with a lot less inspection,” Jaydee Hanson, a senior policy analyst at the Center for Food Safety, told TakePart in July. “And that’s what can lead to serious problems.”

Source: Take Part

comments closed

Related News

February 25, 2024

The Body Shop faces store closures, layoffs and ingredient surplus after Aurelius acquisition

Consumer Packaged Goods

Recent reports reveal The Body Shop will shut up to half of its 198 stores in the UK and cut the size of its head office, incurring hundreds of job losses. According to the firm overseeing the restructuring of the beauty retailer, closures will begin this Tuesday.

February 25, 2024

Kroger and Albertsons face lawsuits to block $24.6bn merger – Bloomberg

Consumer Packaged Goods

Amidst brewing tensions, the US Federal Trade Commission (FTC) and a coalition of states are poised to take legal action as early as next week, aiming to prevent grocery giant Kroger’s $24.6 billion acquisition bid for Albertsons, Bloomberg reported.

February 25, 2024

Diageo reportedly in talks to offload trio of brands, including Pimm’s

Consumer Packaged Goods

The owner of Guinness and Baileys has hired financial service group Rothschild to explore the sale, which includes Pimm’s, fruit liqueur brand Safari and Pampero rum. Each brand could be offloaded individually or as a three, according to Sky News.

How can we help you?

We're easy to reach