Testimony: Maine Jobs, Trade, and Democracy Act (LD 1815)
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Presented by: Dr. Mark Haggerty
Representing: Maine Organic Farmers and Gardeners Association (MOFGA)
The Maine Organic Farmers and Gardeners Association, an organization of over 4,000 farmers, gardeners, consumers and business, asks you to support L.D. 1815. I am currently a professor at the University Maine where I have taught economics courses that deal with globalization issues.
There are many organizations and individuals that have called for the analysis and subsequent slow down in the implementation of free trade liberalization. Joseph Stiglitz, a Nobel Award winning economist recently reinforced this position after conducting an analysis of the North America Free Trade Agreement (NAFTA)1. His analysis is consistent with the provisions of the Maine Jobs, Trade, and Democracy Act (LD 1815), which will examine the impact of trade liberalization on the economy and communities of Maine. The Free Trade Area of the Americas (FTAA) is being lauded as the most far-reaching trade agreement in history. We need to try and understand the ramifications of this massive new trade agreement so the state of Maine, its people, business and government can play a role in determining the future of Maine.
The following issues are specifically of interest to the Maine Organic Farming community:
1. Trade liberalization policies have led to declining farm prices and income both in the United States and abroad. This has had a negative impact on the economic survival of domestic family farms. The Economic Policy Institute reports that 72,000 family farms disappeared between 1993 and 1999 as the result of trade liberalization policies. They contend that these losses would have been substantially higher if not for federal farm payments2. Federal farm payments and subsidies are a major issue that was debated during the most recent FTAA negotiations. Removal of these safety nets and allowing for large market fluctuations in the prices of farm products has the potential to be very destabilizing to the farm community.
2. Liberalization of trade policies has also been linked to increasing scale in farm production, increased competition and displacement of peasant farmers in developing countries. A shift to mega farms will reduce the competitiveness of family farms. These practices also negatively impact sustainable farming practices that are a core value of the organic farming community.
3. Regulations and standards concerning organic labeling, Genetically Modified Organisms (GMOs) and environmental protection can possibly be overruled by the international tribunals that have been created by existing trade policies. FTAA negotiations are attempting to strengthen these provisions. Foreign firms have the opportunity to oppose local, state and federal regulations that they feel are "unnecessarily burdensome' or "constitute barriers to trade"3. The possible outcomes of these tribunals are a threat to local, state and federal governance and negatively impact the environment. Additionally, trade liberalization proposals will restrict the ability of communities to apply the precautionary principle, which MOFGA supports, when making decisions concerning GMO cultivation and imports.4
1 Stiglitz, Joseph. The Broken Promise of NAFA, New York Times, January 6, 2004.
2 Scott, R. and A. Hersh. Trading Away U.S. Farms, Economic Policy Institute Briefing Paper, www.Epinet.org, August 2001.
3 Barrow, Maude & Tony Clark. Making the Links: A Peoples' Guide to the WTO and the FTAA (Council of Canadians and Polaris Institute), http://www.citizen.org/documents/Making_the_links.pdf.
4 Olson, Dennis. ATSDF Agricultural Tent Recommendations, Institute for Agriculture and Trade Policy, November 2003.