Washington Insider - Monday

Vermont Litigation on Biotech Labels

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

EU Sugar Industry Sees Threat from TTIP

Sugar growers, manufacturers and refiners in the European Union are said to be concerned that a flood of U.S. and Mexican sugar will be imported into the bloc if sugar is included in negotiations on the Trans-Atlantic Trade and Investment Partnership (TTIP) and trade barriers come down as a result..

Marie-Christine Ribera, director general of the European Sugar Manufacturers Association, told delegates at the American Sugar Alliance International Sweetener Symposium last week that if TTIP were to include sugar, it would "open the EU market to sugar swaps under [the North American Free Trade Agreement]." The concern for the EU sugar sector is that lower priced sugar from North America would considerably undercut EU producers when the EU's sugar quota system ends in 2017 as part of the reform of Europe's Common Agricultural Policy.

Don Phillips, trade adviser to the American Sugar Alliance, said ASA will "take the position that, given [the EU's] market situations [being large net importers, already extensive market access commitments on sugar undertaken in various trade agreements], it makes no sense to negotiate additional market access commitments in TTIP. Therefore, sugar should be left out of these negotiations." With the sugar industries on both sides of the Atlantic pledged to work against any liberalization of bilateral trade, they are likely to get their way.

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CBO Projects Additional Federal Disaster Relief Funds Will be Available Next Year

The Congressional Budget Office says Congress will have up to $18.4 billion available to appropriate for disaster relief in fiscal 2015. The estimate is higher than earlier estimated due to the fact that the government used less than its allotment of disaster funds this fiscal year.

Under the 2011 debt limit law, Congress could have appropriated up to $12.1 billion for disaster relief in 2014, but so far it has appropriated just $5.6 billion, and the fiscal year ends in just six weeks. That leaves $6.5 billion that can be added to potential disaster funding next year.

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Under the budget law, the amount that Congress can appropriate for disaster relief is based on average disaster spending during the previous 10 years. However, if less was spent the previous year than was allowed, that amount can be added in the next year. Later this month, the Office of Management and Budget is expected to release a separate assessment of whether the Congress’ current appropriations bills for fiscal 2015 would exceed the discretionary spending caps, a report that also will affect how much Congress can spend in the fiscal year beginning Oct. 1.

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Washington Insider: Vermont Litigation on Labels

The state of Vermont is under pressure now to defend in federal court its effort to impose labels on foods with ingredients from biotech crops. Recently, the state attorney general's office moved to dismiss a lawsuit by the Grocery Manufacturers Association and other trade groups who say the Vermont labeling law unconstitutionally compels businesses to disclose information they don't want to reveal. This, they say, would restrict their commercial speech by prohibiting biotech products from being labeled as "natural."

An attorney involved in the case told the press last week, "In the Vermont case, the disclosure is purely factual, but where GMA and Vermont differ is whether it's noncontroversial. Vermont believes [GMO labeling] is noncontroversial because it is true, but GMA's approach is that it is controversial because it's a government message to consumers that assigns significance to the fact that food contains genetically engineered ingredients."

This creates problems, GMA says, because the disclosures are coupled with underlying assumptions or assertions that are vigorously disputed. Ricardo Carvajal, a representative of the firm arguing for the GMA said, "In its opening, the Vermont law talks about safety concerns in relation to bioengineered food, but these foods have been out there for 20 plus years and no one has presented a proven safety concern. All of a sudden, what looks like a factual statement becomes something else."

In fact, the history of federal biotechnology regulation tends to support the GMA, observers note. The Food and Drug Administration nearly 20 years ago determined it wasn't going to regulate foods derived through bioengineering separately from other foods, and that GE products aren't materially different than conventionally produced food, Carvajal noted.

Pro labeling advocates such as the Center for Food Safety often argue that the patentability of GE foods demonstrates their material difference from conventional foods. However, others believe that Vermont's defense is vulnerable based on a 1996 Second District Court decision, International Dairy Foods Association v. Amestoy. In that case, the Court found that compelling speech to satisfy "consumer curiosity" is not a substantial governmental interest. Also, in 1994, Vermont passed a law requiring the labeling of milk produced by cows injected with recombinant growth hormones but the Second Circuit ruled this violated milk producers' and sellers' First Amendment rights.

The argument about restricting the claim of being a "natural" food is also part of the Vermont case. The U.S. Supreme Court said in a 1980 case that the government must demonstrate it has a "substantial" interest in restricting the speech and that the proposed restriction will advance this interest, among other criteria.

Vermont argues, by contrast, since foods with ingredients derived from biotech crops depend on the direct injection of genes into cells or the hybridization of genes that don't occur in nature, they aren't natural and can't be labeled as such. The state's interest is to prevent consumer deception and confusion, and help consumers make informed decisions, the state says.

Still, the attorneys involved argue that determining what natural means has become highly complicated and the GMA argues the term is unconstitutionally vague.

"The term 'natural' has caused a lot of headaches and lawsuits over what counts as natural," one attorney told the press. I think just one state coming out and saying one process, the inserting of a gene from one species to another, isn't natural is very problematic. It will be difficult to demonstrate how labeling is necessary when we look at many other processes for food out there."

At this time, many observers suggest that the earlier Supreme Court findings that state interest must be "substantial" before regulations can be imposed may be very important to the outcome –– and, that "curiosity" is not necessarily substantial. This is indicative of a problem the "pro-regulation" advocates have had for a long time: the lack of any evidence of a biotech threat to health.

However, the case is still in its relatively early stages, with more assertions and responses yet to come. Clearly, the case is important to technology advocates, among others, and should be watched closely as it proceeds, Washington Insider believes.


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