- - Tuesday, January 12, 2016


“No trade agreement is going to force us to change our laws,” declared President Obama in a speech at Nike Corp.’s Oregon headquarters last May. He mocked the critics who warned treaties like the proposed Trans-Pacific Partnership (TPP) would undermine a wide range of U.S. laws protecting consumers, small businesses and local democracy , among other concerns.

Before the year was over, however, Mr. Obama proved the critics right. He and Congress revoked the U.S. Country-of-Origin Labeling Law (COOL) with passage of the federal spending bill on Dec. 18. The law enabled consumers to know the origin of meats for sale in grocery stores via mandatory package labels, but was deemed an illegal barrier to trade by the World Trade Organization (WTO) last spring.

The World Trade Organization tribunal demanded the United States weaken or drop the Country-of-Origin Labeling Law or face more than $1 billion in retaliatory tariffs by Canada and Mexico (the amount of profits allegedly lost by meatpacking corporations due to compliance costs). The WTO ruled COOL illegal because its requirements “create an incentive for processors to use exclusively domestic livestock.”

About 90 percent of Americans favor mandatory food labeling laws because they want to make informed decisions about what their families eat. But the labels also are popular among smaller ranchers. Why? When competitive options exist, most of us prefer to buy American-sourced products or services. But if global corporations can force us to make decisions in ignorance, small businesses and consumers both will lose.

Gerald Schreiber’s family has raised cattle on Colorado’s eastern plains for more than a century. He believes losing the Country-of-Origin Labeling Law would be harmful to small ranches like his, noting “when you’re in a commodity business, branding is crucial.”

Mr. Schreiber scoffed at a Senate proposal to replace COOL requirements with voluntary labeling, “The big meatpackers won’t do it — they prefer keeping you in the dark.”

Jack Owen, who runs a family ranch in Alzada, Mont., suspects the WTO ruling is responsible for driving down the price he receives for some cattle by more than one-third. “All the other fundamental market conditions would point to sustaining healthy prices,” said Mr. Owen.

The COOL precedent worries many small-business owners and advocates because a variety of measures to support local entrepreneurs could be deemed illegal under the Trans-Pacific Partnership. For example, many communities have passed laws preferring purchasing from local businesses, limiting the size of big-box stores and other policies to protect local values and quality of life. But under the TPP, taxpayers have no right to prefer contracting a local resident for a project over a global corporation based in places such as Tokyo.

Like most gifts to large corporations, the Trans-Pacific Partnership is being sold to citizens as something that will help small businesses. Factoids like “95 percent of potential customers live outside our borders” appear throughout the Obama administration’s TPP marketing material. Since well over 99 percent of all businesses have fewer than 500 employees, some of those naturally could increase overseas sales. But according to the U.S. Census Bureau, just 3 percent of those businesses export anything at all.

Firms with fewer than 100 employees saw their share of U.S. exports to Mexico and Canada decrease after implementation of the North American Free Trade Agreement — from 14 percent to 10 percent. There’s no reason to think homogenizing (read: lowering) standards globally will result in anything other than global corporations grabbing even more market share.

The debate over the TPP is the rare issue with virtually no correlation to partisan affiliations. Homogenizing laws across states and nations invariably means diminishing the ability of communities and states to serve their own residents and build more self-reliant economies. The resulting centralization of power in distant institutions concerns people across the political spectrum.

If foreign corporations can force the United States to abandon a compelling public interest like knowing the source of your food, it’s hard to imagine what regulations won’t be challenged.

While boosters of the Trans-Pacific Partnership would have us believe it’s simply about trade, tariffs and economics, the core of the vast treaty deals with limiting the potential for democracy to create regulations disfavored by transnational corporations.

It’s about who will govern.

Jeff Milchen is the co-founder of the Montana-based American Independent Business Alliance.

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