December 03, 2007

The Washington Post Discredits NAFTA

It strikes me as a problem that the editorial board of The Washington Post is either innumerate or dishonest -- there's just no other excuse for comparing Mexico's pre- and post-NAFTA GDP's in non-inflation adjusted terms. As Dean Baker says, "If we don't adjust for inflation, Zimbabwe's economy, wracked by hyperinflation of several thousand percent annually, is the fastest growing economy on the planet. If the Post editorial writers use a consistent measure, we can expect to see warm praise for Zimbabwe's extraordinary growth on the editorial pages in the near future." And, remarkably the editorial gets worse from there, cherrypicking poverty statistics, ignoring GDP growth, sidestepping distribution, and so on, and so forth. As Daniel Davies famously wrote, "Good ideas do not need lots of lies told about them in order to gain public acceptance." By this standard, The Washington Post is beginning to convince me that NAFTA was not a good idea. Otherwise, why would they have to make such a pathetically weak case?

December 3, 2007 in Trade | Permalink | Comments (11)

May 23, 2007

Food Safety Briefing: Restrictions on Imported Food Urged; Trade Ambassador Pressured; A Florida Family Reels; From Whence Cometh Garlic?

[by litbrit]

U.S. Senator Evan Bayh of Indiana, in letters to President Bush and the head of the FDA Monday, called for a crackdown on exporters sending adulterated and otherwise toxic or dangerous food, medicines, and ingredients into the United States:

WASHINGTON – The United States should yank away the “welcome” sign for many Chinese food and medicine ingredients, Sen. Evan Bayh, D-Ind., told President Bush and the head of the Food and Drug Administration in letters he sent Monday. Recent animal deaths have been blamed on pet food containing an ingredient imported from China that was contaminated with melamine, a plastic precursor used as a fertilizer. Feed tainted with the same imported ingredient was sent to 38 Hoosier poultry operations.

[...] Even though scientists have concluded that the risk to humans from the chickens fed the tainted feed is very low, Bayh told Bush that the episode illustrates how vulnerable U.S. consumers are “to potentially poisonous agents that may be intentionally delivered to American citizens.” In a letter to FDA Commissioner Andrew von Eschenbach, Bayh said the FDA should consider restricting Chinese exports of food and medicine ingredients “until it can be established that its bulk ingredients meet U.S. health and safety standards.” Bayh did not say how the guarantee would be met.

I'm glad another Senator has added his voice to the small-but-growing chorus of criticisms surrounding the regulatory agency (the FDA) that by its own admission inspects only 1% (or "less than 2%", depending on who's talking) of all imports; I'm especially heartened to hear Bayh point out the melamine elephant in the room--that is, how unnervingly vulnerable we are--and even utter the phrase "...potentially poisonous agents [that may be] intentionally delivered to American citizens”.  Senator Dick Durbin, D-Ill. and Congresswoman Rosa DeLauro, D-CT continue to address food safety and consumer information issues: Senator Durbin testified before Congress about the FDA's current state--there are too many imports pouring in for agents who are far too few in number,  to name just one obvious problem--and Congresswoman DeLauro urged the enactment of tougher product labeling laws, including Country Of Origin Labeling (COOL) and clear notification if a meat or poultry product came from a cloned animal or its progeny. On May 10th, the two leaders co-wrote a terse and forthright letter to U.S. Trade Representative Susan Schwab (my emphasis):

Dear Ambassador Schwab: We are writing in light of the recently discovered contamination of imported wheat gluten and rice protein concentrate used to manufacture pet food in the United States. [...]

The safety of food imports from China extends beyond the pet food recall. China is especially poor at meeting international food safety standards, which is particularly disturbing considering that China exported approximately $2.26 billion in agricultural products to the United States in 2006. A recent news article noted that, in February, the Food and Drug Administration (FDA) blocked the entry of several food products from China because they contained banned additives, were tainted by pesticides or were contaminated with salmonella. Some products were simply unsanitary.

The U.S. Trade Representative (USTR) is involved in these matters because regional, bilateral, and international trade agreements entered into by the United States often include sanitary and phytosanitary (SPS) measures. For example, there are two World Trade Organization (WTO) agreements that deal with food safety and animal and plant health and safety. We understand that these provisions allow countries to set their own standards but require countries to base regulations on science and encourage countries to use international guidelines where they exist.

Our concern is whether the USTR has the ability to challenge the sanitary and phytosanitary standards of our trading partners based on evidence that they are not meeting international standards and may be endangering public health in the United States.

This issue is particularly important as U.S. agricultural imports are predicted to reach a record $69 billion in FY 2007. If we are to continue at this rate, we must ask important questions about the food safety standards of our trade partners to ensure our nation's public health is not compromised.

Developing countries often lack sufficient regulations, monitoring, and enforcement of SPS regulations. China, for instance, has come under scrutiny in the past for an overall lack of transparency and failure to properly adhere to SPS measures required by the World Trade Organization.

While we understand the importance of the United States' involvement in international trade, participation in these trade relations should not come at the expense of animal or human health.

Therefore, we request answers to the following questions—   

1) What sanitary and phytosanitary measures are included in current free trade agreements and other permanent trade relations in which the United States is currently engaged?

2) What legal recourse does the United States possess with respect to imported food products that pose a threat to public health, in the event that the country where the offending product originated is not cooperative?

Incidentally, neither of the two Senators from Florida--Mel Martinez (R) and Bill Nelson (D)--mentions food safety or labeling issues on his or her website, though the Sunshine State has an obvious stake in both issues: in terms of the size of its contribution to Florida's GDP, agriculture is second only to tourism.  And many Floridians, along with families and farmers in the other 49 states, have already been profoundly affected by the melamine-adulterated pet food and animal feed.  This family, for example:

If it's not trips to the vet, it's the nightly ritual of injecting a feeding tube intravenously into the animals. Without the daily fluid pack that hangs above the laundry room dryer, Libby faces certain death.

Two of their four cats already have died. All four have suffered kidney disease their veterinarian attributes to contaminated pet food.

The food, Nutro Max Gourmet Classics, did not appear at first on the ever-growing national recall list, and Cmar thought all was well. But then Nutro Max's manufacturer issued a recall, and Gourmet Classics joined hundreds of other products being blamed for the illness and deaths of thousands of cats and dogs nationwide.

Cmar has spent almost $10,000 trying to save Libby and her family's three other cats. Cmar, who runs a small business from home, charged much of it to her Visa card.

As bills mount, she finds herself at a crossroads: continue spending thousands to save Libby? Or does that just prolong the animal's suffering?

"I'm an anxiety-ridden mess," says Cmar, as she weighs the financial issues and the concern that her 4-year-old son, Matthew, and 1-year-old daughter, Maudaline, won't understand the continued loss of their pets.

Lastly, a recent USA Today article about food safety and questionable imports offers some  interesting data:

The overall dollar figures for food imports into the USA from China are high — $29 million worth of fresh or frozen fruit and $131 million worth of fresh or frozen vegetables in 2006, according to the USDA. But "the share of the U.S. food supply that comes from China is tiny, probably less than 1%," said Fred Gale, a senior economist with the China team at the USDA's Economic Research Service.


But that doesn't mean the average American isn't eating food from China, and some surprising ones at that. If you season with garlic, sip apple juice, spread honey or savor fish dishes, there's a good chance you're buying food from China.

Garlic: More than 50%

China produces 75% of the world's garlic, according to the FAO. Last year was the first year in which U.S. consumers bought more garlic produced in China than garlic grown in California, said Bill Christopher, owner of Christopher Ranch, a major grower of garlic in Gilroy, Calif. California grows "99.9% of U.S. garlic," he said.

"There were roughly 150 million pounds of fresh and peeled garlic from California sold in the U.S. in 2006 and 170 million pounds from China," he said.

Chinese garlic is easily recognized, he said. "In California we cut the roots off but we leave a little bit of a brush. In Chinese garlic they cut the root plate off flat, with no brush."

California garlic farmer, author, and English professor Chester Aaron recommends seeking out domestically-grown garlic:

...thanks to a persistent garlic fungus in the nutrient-robbed soil, rock-bottom pricing and a loophole in U.S. trade law, most of the garlic sold in the United States has been grown in foreign soil. China grows two-thirds of the world's garlic, while California is currently responsible for just two percent.


China has been the particular focus of legislation designed to prevent "dumping," in which exporters introduce garlic to the U.S. market at prices significantly lower than their stated production costs. At the urging of American farmers, federal trade officials agreed to levy a 377 percent duty on imported garlic in 1994. Under pressure from free-trade advocates, officials revised the ruling a year later, to lower tariffs on "new" shippers who were not involved in the original investigation. Foreign shippers have had to merely form new companies in order to avoid the tariffs, thereby freeing themselves to continue dumping their product into the U.S. market. Accordingly, the volume of Chinese garlic in the U.S. market has increased more than ten-fold since 2000, forcing California garlic farmers to sell off vast tracts of land in order to survive. Since 2001, Christopher Ranch has put 40 percent of its garlic fields out of commission.

Aaron says that China, along with fellow exporters Argentina, Brazil, Chile, Ecuador and Mexico, are all using pesticides and herbicides banned in, and inherited from, the United States. "There aren't enough inspectors at the borders to check all the garlic that comes in from around the world, and the chances are that what you buy in most markets has been heavily sprayed," says Aaron. He recalls happening upon a bushel basket of purple-skinned garlic in a local organic grocery a few years ago. A shop clerk told him it had been organically grown in Monterrey, but he recognized the "grower's" name as an importer who sells Mexican garlic. Aaron bought a bulb and passed it along to a chemist friend at Berkeley. A few days later she called to tell him that the supposedly organic garlic contained several varieties of chemicals banned in the U.S. A representative from the Food and Drug Administration, contacted for this story, reports that there are no instances on record of garlic shipments from Mexico being turned away because they've contained banned sprays, which neither confirms nor refutes Aaron's claim. "The best advice I can give is to buy from a reputable farmer or grow your own," says Aaron.

Until we have mandatory labels here in the States, concerned consumers will have to ask the friendly produce manager about the origins of the store's garlic inventory or take their chances with pesticide residue on the imported bulbs--pesticide that may well be banned, or in the process of being phased-out, in the U.S., but which the chemical giants continue to produce and sell to farmers abroad, who in turn apply it to garlic and other produce that winds up back in America's food chain.

More on the issue of pesticide inheriting soon.

(H/T JayMonster; Lisa in Baltimore.)

Also at Shakesville.

May 23, 2007 in Trade | Permalink | Comments (20)

May 14, 2007

Trade Prorities

In the New Yorker, James Surowiecki has a very smart analysis of America's approach to intellectual property laws in international trade deals:

Our recent free-trade agreement with South Korea is a good example. Most of the deal is concerned with lowering tariffs, opening markets to competition, and the like, but an important chunk has nothing to do with free trade at all. Instead, it requires South Korea to rewrite its rules on intellectual property, or I.P.—the rules that deal with patents, copyright, and so on. South Korea will now have to adopt the U.S. and E.U. definition of copyright—extending it to seventy years after the death of the author. South Korea will also have to change its rules on patents, and may have to change its national-health-care policy of reimbursing patients only for certain drugs. All these changes will give current patent and copyright holders stronger protection for longer. Recent free-trade agreements with Peru and Colombia insisted on much the same terms. And CAFTA—a free-trade agreement with countries in Central America and the Caribbean—included not just longer copyright and trademark protection but also a dramatic revision in those countries’ patent policies.[...]

The U.S., in its negotiations, insists on a one-size-fits-all approach: stronger rules are better. But accepting a diverse range of I.P. rules makes more sense, especially in light of the different economic challenges that developing and developed countries face. Lerner’s study found that the benefits of stronger patent laws were reduced in less developed countries. And developing countries, being poorer, obviously have more to gain from shorter patent terms for foreign innovations, since that facilitates the spread of new technology and the diffusion of ideas. Tellingly, this is the approach the U.S. takes when it comes to labor standards, arguing that we shouldn’t impose developed-country standards on developing countries. But in the case of intellectual property the government’s position is exactly the opposite. The only difference, it seems, is whose interests are at stake.

It's worth driving in how exact the analogy is: Labor and corporations both argue that insufficient attention to their particular regulatory protections -- in Labor's case, wage and work standards, in the corporate example, IP laws -- will lead to disastrous consequences.  Labor warns of the middle class's demise, corporations warn of innovation's end.  Neither strikes me as particularly likely in full, but both will suffer adverse effects from a deregulated global sphere.  It's telling, then, that Labor's concerns are almost entirely ignored, while the American government exerts great energy in favor of corporate protections.  As Krugman recently put it in a column on inequality, "The government can tilt the balance of power between workers and bosses in many ways—and at every juncture this government has favored the bosses.”  There's no market-based, independent reason to demand wide application of our patent laws and not our labor standards.  It's a choice, and a revealing one.

May 14, 2007 in Trade | Permalink | Comments (11)