Inclusion in the TPP May Come at a Cost for Canada


Contributors: Ed Farrell, Jerry Chapin

As President Obama signed Trade Promotion Authority into law he removed a major stumbling block to completion of the Trans-Pacific Partnership (TPP) trade negotiation when chief negotiators, and then Ministers, meet in Maui July 24-31.  However, a sticking point for many of the countries in the negotiation may be Canada’s reluctance to nix their protectionist supply management system for dairy and poultry.

With respect to dairy, the system dates back seventy years to when Canada faced significant surpluses following World War II, as the strong profits realized by Canadian dairy farmers from their trade with the U.K during the war evaporated with the normalization of trade within Europe after the war. In an attempt to align production with demand, Canada adopted a system that established floor prices for certain dairy products, which in turn supported on-farm milk prices. In further pursuit of price stabilization, the government established a supply control system that targeted specific dairy products.  These policies eventually gave way to Canada’s current supply management system.  While this system has propped up Canada’s milk producers, it could now exclude Canada from the largest trade deal since NAFTA.

The Canadian system is best understood as comprised of three parts: Price setting, control of supply, and protection from foreign competition. Prices are set by the Canadian Dairy Commission and ultimately result in significant income for dairy farmers. To avoid overproduction, farmers are allotted a production quota, which is a transferable asset currently valued at about $28,000.00 per dairy cow. Thus, an average Canadian dairy farm of around 70 cows has about $2,000,000 worth of quota. The final component to Canada’s supply management system is protection from foreign competition, which brings us to the TPP.

Canada’s ability to regulate their market is dependent on keeping competitively priced imports out, and to this end Canada has very restrictive tariff rate quotas on dairy products, with over quota tariffs ranging from 246% for cheese to 300% for butter. The result of these supply management policies is that Canadians are currently paying just over C$7.87 for a gallon of milk, or nearly twice as much as the average U.S. consumer.

There is no question that as negotiators meet in Maui, all eyes will be on Canada, which is under pressure to open their dairy market to imports from TPP countries such as Japan, Australia and New Zealand, as well as the U.S. Some believe this pressure will be enough to bring the nation out of its protectionist mind set. However, Canada has long stood behind their supply management program and is not showing much indication that they plan on bending to foreign pressure, regardless of whether the pressure is coming from powerhouse neighbors such as the U.S. or allies half way around the world. As recently as last month, a spokesman for Canadian Trade Minister Ed Fast said Canada would defend dairy supply management in its negotiations.

Faced with elections in October, will the Harper administration de-regulate the dairy and poultry industry as they did their wheat industry in 2011, or will they hold firm in support of their unique and dated regulatory system? And if they hold firm on dairy and poultry, will the US and others take a hard line and exclude Canada altogether? Or will some middle ground be found? Whether preserving Canada’s regulatory system for dairy and poultry is worth losing inclusion in the TPP — a deal that will ultimately benefit Canada in a wide range of sectors — may ultimately be a decision the Harper administration has to make.

How Much Rain Has Fallen In Texas?

By Charles W. Stenholm

In the month of May, Texas received over 35 trillion gallons of rain.  See the graphic, below, to put that into perspective.

Many prayers were answered as we went from extreme drought to an overabundance of rainfall.  Truly a blessing!  It is much more difficult to do without water than deal with having too much.  Just wish the loss of life and property could be avoided.  We did, however, see many of the benefits of investing in flood control pay some dividends.

TX Rainfall

Click graphic to enlarge.

CPSC Enforcement Action Against Michaels Highlights Importance of Proper Reporting

By Elliot Belilos

The U.S. Consumer Product Safety Commission (CPSC) recently filed an action in federal court against Michaels Stores, Inc., seeking civil penalties for allegedly untimely reporting injuries from a vase sold in the stores and, notably, for allegedly falsely reporting the incidents as a retailer rather than as the manufacturer of the product.  According to the Complaint, Michaels misrepresented to the Agency the company’s role in the distribution chain, allowing another company, The Gerson Company (“Gerson”) to report as the manufacturer even though Michaels was the importer of record (and, as a result, the statutory “manufacturer”).

CSPC asserts that Michaels engaged Gerson to contract to have the vase made overseas exclusively for Michaels, but that Michaels was the importer of record, a fact that CPSC alleges Michaels withheld from the Agency in its 15(b) report.  CPSC asserts that Michaels purposefully withheld that information so that Gerson would be the recalling entity, and that the recall would have been more successful had the more well known Michaels been the recalling entity.

This case bears watching as it moves forward.  Certainly companies that are importers of record for products manufactured overseas need to understand that they are deemed to be the manufacturer of those products under the Consumer Product Safety Act (CPSA), and that any report to the CPSC should properly reflect their role in the distribution chain.

Elliot Belilos represents companies on consumer product safety compliance issues, including reporting obligations to the CPSC and corrective actions, up to and including recalls.  Elliot can be reached at ebelilos@ofwlaw.com.

Don’t Rush the Holiday Preparations – Make Certain the Meat is Properly Cooked

By Barbara J. Masters, D.V.M.

Getting ready for holiday “get togethers”, one often finds themselves in a rush or behind on preparing the food for the party.  Don’t let tardiness be the reason the party attendees end up with a case of foodborne illness.  Don’t rush cooking of product; I am certain the guests would rather wait a few minutes than risk the potential of being sick because the product was not properly cooked.

Always read the product label for specific cooking instructions and follow them!  Be sure to verify whether the product has been pre-cooked and simply needs to be re-heated, or if the product is raw and needs to be thoroughly cooked.   All of this information will be included on the product label.  If there are questions on what temperature to cook a specific product to, USDA’s Food Safety and Inspection Service provides a chart that includes safe minimum internal cooking temperatures:

Cook all food to these minimum internal temperatures as measured with a food thermometer before removing food from the heat source. For reasons of personal preference, consumers may choose to cook food to higher temperatures.

Product Minimum Internal Temperature & Rest Time
Beef, Pork, Veal & Lamb
Steaks, chops, roasts
145 °F (62.8 °C) and allow to rest for at least 3 minutes
Ground meats 160 °F (71.1 °C)
Ham, fresh or smoked (uncooked) 145 °F (60 °C) and allow to rest for at least 3 minutes
Fully Cooked Ham
(to reheat)
Reheat cooked hams packaged in USDA-inspected plants to 140 °F (60 °C) and all others to 165 °F (73.9 °C).

 

Product Minimum Internal Temperature
All Poultry (breasts, whole bird, legs, thighs, and wings, ground poultry, and stuffing) 165 °F (73.9 °C)
Eggs 160 °F (71.1 °C)
Fish & Shellfish 145 °F (62.8 °C)
Leftovers 165 °F (73.9 °C)
Casseroles 165 °F (73.9 °C)

Source: Food Safety and Inspection Service

You can not see or smell bacteria that may be on raw products.  It is important to follow the manufacturer’s cooking instructions to ensure the safety of the product.

Stuffing Safety 1

By Barbara J. Masters, D.V.M.

It is that time of year again.  I don’t cook –and I continue to provide food safety advice for those of you that do.  Ah, it must be Thanksgiving.  Last year I provided some tips on thawing and cooking your Thanksgiving turkey.  I encourage you to review those tips if you have any questions on safely preparing your turkey.

This year, I am adding counsel on safely preparing the stuffing.  The most important things to remember are: stuffing should be cooked separately from the turkey (you can add it to the bird after both have been properly cooked), the stuffing should not be prepared ahead (unless you plan to freeze it), and the stuffing must reach a temperature of 165°F to be safe.

The safest way to prepare stuffing is to mix the ingredients just prior to cooking and place them in a shallow baking dish. Moist stuffing is always better, as heat destroys bacteria better in a moist environment.   The oven should be set no lower than 325°F and the stuffing should reach an internal temperature of 165°F.   The leftover stuffing should be promptly refrigerated within 2 hours of removal from the oven.  The leftover stuffing should be used within 3-4 days.

While we are all looking for those dishes we can prepare ahead to save time, stuffing is not one of them.  If you must prepare it ahead, you can prepare the stuffing and freeze the mixture in the shallow casserole dish that will be used for baking.  The stuffing can then be cooked from the frozen state (do not thaw) until it reaches 165°F.

If you add meat, poultry or shellfish to the stuffing (if I cooked, I certainly would add this), you should pre-cook the ingredient to 165°F before adding it to the stuffing.  This is true even when you are planning to freeze the stuffing and cook it at a later time.

Finally, if it is not clear by this point, the stuffing must reach an internal temperature of 165°F to ensure that it is safe.  Of course, you learned last year that a food thermometer is part of any “safe Thanksgiving.”  It is critical to use it to measure the temperature of both the turkey and the stuffing.

Have a Thankful and Happy Season.

Before joining OFW Law, Dr. Masters served as Acting Administrator and then Administrator for the United States Department of Agriculture Food Safety and Inspection Service (FSIS) from March 2004 through January 2007.

Big Data and Your Privacy

By John G. Dillard

Note: John authors a regular column in Farm Journal magazine, the most widely-circulated farm publication in the United States.

Agriculture is officially entering the era of big data. Prescriptive planting relies on historical weather trends and satellite mapping coupled with soil sampling, yield monitoring and soon whatever a drone can glean from flying over a field. Using these tools, data flows from a farmer’s equipment to a central database, along with terabytes of information from farms all across the country. While this data transfer is necessary to feed the algorithms that will compute an individual farmer’s planting prescription, it also has value that extends well beyond its use for prescriptive planting.

One of the primary concerns many producers have about prescriptive planting programs is the ownership of the data. Most farmers view the information about their farm as personal. Although you might brag or complain about yields in the truck line at the grain elevator, you do not necessarily feel comfortable with a computer jockey who is five states away sharing your yield data. If this data can be sold, many farmers want to know how it will be used.

Click here to read the rest of John’s Farm Journal column.

John Block: Bounty of Food

By John R. Block

I hope you have a happy Thanksgiving this year. The celebration of Thanksgiving dates back to our ancestors who settled this country. They didn’t have any of the comforts that we take for granted today. They were just thankful to have a roof over their head and food to eat.

Even today, there are people starving in other countries. In many of the African countries, they use 50 percent of their family income just to put food on the table. We used to spend 30 percent, then 20 percent, now less than 10 percent of family income to feed the family.

How much do you think this year’s Thanksgiving dinner will cost? Probably less than $5.00 per person. That includes more than just the turkey. It includes stuffing, sweet potatoes, rolls, peas, cranberries, carrots, celery, milk, and pumpkin pie with whipped cream. According to Bob Stallman, President of the American Farm Bureau, that delicious bounty of food costs less than it did last year.

I’m looking at a Thanksgiving dinner chart going back 25 years. The inflation adjusted cost is actually less than it was in 1986.

According to the Economic Research Service (USDA), the nation’s food price index has risen less than 1 percent this year.

The severe drought that we experienced last year pushed up our food prices but they are back down now. Global grain reserves are up by 13 percent. Course grain reserves that include corn are up by 30 percent.

There are a lot of reasons why food is such a bargain in the U.S. We’re just better at producing than we used to be. When I was 10 years old, one farmer produced enough food to feed 15 people. By 1964, one farmer was feeding 26 people, and today, one farmer supplies food for 155 people. That is a 10-fold increase. And, we do it with less crop acres.

I know we have many reasons to be thankful, but one big reason is that we are not hungry. Thanks to the American farmer.

John Block was Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill.

A Safe Thanksgiving

By Barbara J. Masters, D.V.M.

I am always amazed each Thanksgiving that my friends have questions on “cooking turkey.”  I am even more amazed that they ask me questions, because I have a solid reputation for not being able to cook anything!  That said, perhaps they ask because I do know how to make certain the turkey makes it safely to the table for Thanksgiving.

Many of us buy a frozen turkey, and the first challenge is remembering to thaw it!  It takes a few days in the refrigerator for thawing.  DO NOT THAW THE TURKEY AT ROOM TEMPERATURE!  If you have already started thawing your turkey, great!  If not, do not panic.  You can place it in the refrigerator right now, and complete the thawing in COLD water.  If you thaw it from a frozen state in cold water, it takes about 30 minutes per pound.  I find many people become impatient with the cold water thawing method and start running warm water to hasten the process.  We should not use warm water for thawing!  Get that bird in the refrigerator today and finish the thawing in COLD water!  Once the turkey is thawed, the giblets can be removed for cooking separately.

The turkey should be cooked in an oven that has been pre-heated to 325°F.  It is recommended that the stuffing be cooked separately from the turkey.  The internal temperature of the turkey should reach 165°F.  A food thermometer should be used to measure the temperature of the turkey, taking the temperature at the thickest part of the breast.  I recommend using a food thermometer even if the turkey has a pop-up timer.   Many of my friends prefer the flavor of the turkey when it is cooked to higher temperature, but it is safe once it has reached 165°F.  It is best to let the turkey stand for approximately 20 minutes before carving.

I have found that the only thing harder than remembering to thaw the turkey is cleaning the table after eating all the yummy food.  However, food safety necessitates that leftovers be refrigerated promptly.  If there is any leftover turkey, it should be put into the refrigerator within 2 hours of removing it from the oven.  The leftover turkey will last in the refrigerator for 3 to 4 days.  If there are a lot of leftovers, they should be placed in the freezer, where they will last for 2 to 6 months.

Following these simple steps should provide for a safe turkey!  Well, these steps, in addition to making sure your hands are clean and you do not cross contaminate the counter…However, if there are remaining questions, the Food Safety and Inspection Service (FSIS) has staff working to make sure everyone can have a safe holiday.  They are available at 1-888-MPHotline or Ask Karen on the FSIS website.  Happy Thanksgiving, and enjoy the safe turkey!

Before joining OFW Law, Dr. Masters served as Acting Administrator and then Administrator for the United States Department of Agriculture Food Safety and Inspection Service (FSIS) from March 2004 through January 2007.

Supreme Court Draws the Line on Genes and Patentability

By John G. Dillard

The discovery and isolation of a naturally-occurring gene is not eligible for patent protection.  Such was the holding issued by the U.S. Supreme Court in a unanimous opinion in Association for Molecular Pathology v. Myriad Genetics, IncWhile the Court’s decision has drawn both praise and ire from different pockets of the biotech community, the Myriad Genetics decision is not as much of a game-changer as the popular press would have you believe.  While the Court did hold that isolated genes were not patentable, synthetic DNA and screening tests that identify whether a subject carries a particular DNA sequence are patent eligible.

The Supreme Court has used the 2012-13 term to more clearly define the boundaries of its patent jurisprudence.  In Bowman v. Monsanto Co., the court analyzed whether patent rights extended to subsequent generations of self-replicating seeds.  (OFW Law participated in this case.)  In Bowman, the Court held that patent rights extended to subsequent generations of patented soybean seeds; however, it limited the scope of the decision to the context of agricultural seeds.  With the Myriad decision, the Court has established another bright-line rule – isolated, but naturally-occurring DNA is a “product of nature” and not patentable.

In Myriad, the plaintiffs challenged three of Myriad’s patents related to BRCA-testing.  The BRCA test, recently made famous by Angelina Jolie, allows a patient to determine whether she carries a gene for an increased risk of breast cancer.  Myriad held a patent on the isolated DNA sequence for the BRCA1 and BRCA2 gene.  Myriad also held a patent on complimentary DNA, known as cDNA, for these genes, which was synthetically-replicated based on the isolated DNA sequence in question.

35 U.S.C. § 101 delineates patent eligibility in rather simple, albeit legal, terms.  It reads: “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”  Simple enough, right?  Not really.  Disputes over these 36 words keep thousands of patent lawyers across the country very busy.

The difficult question Myriad posed to the Court was whether the act of discovering and isolating a naturally-occurring gene, an expensive and time-consuming breakthrough that could save millions of lives, was patentable.  Patent protection would give Myriad the right to determine how the gene was used and could allow it to recoup the cost it invested in discovering the gene.  However, one problem that was ultimately fatal to Myriad’s case is that “products of nature” cannot be patented.  The Court invalidated Myriad’s patents in the isolated DNA because it was a naturally-occurring product of nature that Myriad had discovered, but not made.  At the same time, the Court held that cDNA was patentable subject matter because its existence came about by human intervention, not nature.

Biotechnology has made waves in the patent world ever since the Supreme Court affirmed that living things are eligible for patent protection in Diamond v. ChakrabartyMyriad is certainly a landmark case that places some boundaries on Chakrabarty.  However, in practice, its effect will be limited and I would not expect a significant impact on the biotech industry for two reasons.  First, Myriad does not place limits on developing synthetic DNA, patenting methods to identify naturally-occurring genes, or transgenic modification (genetic engineering).  Myriad simply stands for the proposition that one must take a step beyond isolating DNA to qualify for patent protection.  Second, most biotechnology players that hold (now-invalid) patents on isolated DNA also hold patents for subsequent processes or technology that utilize the naturally-occurring DNA; the patents for these processes and technologies are still valid.  For instance, Myriad’s now-famous test to identify the BRCA genes remains patented.

“Alcohol Facts” Becomes a Reality: FTC Requires Four Loko To Label Its Product

By Richard L. Frank and Robert A. Hahn

Nutrition Facts, Supplement Facts, Drug Facts…… Alcohol Facts?  For a number of years, alcoholic beverages have been the only category of consumable product that does not bear basic product information in a consumer-friendly form.  Conventional foods have Nutrition Facts; dietary supplements have Supplement Facts; and OTC drugs have Drug Facts.  But, alcoholic beverages have…. mystery. While most (but not all) alcoholic beverages are required to list percent alcohol by volume (%ABV) or proof, you have to perform mathematical calculations in your head to know how many standard drinks you have consumed.

On February 12th, the Federal Trade Commission (FTC) issued an order that may dramatically alter the beverage alcohol labeling landscape.  To settle a complaint against Phusion Projects, LLC, the maker of Four Loko, the FTC has issued an order that requires Four Loko flavored malt beverages containing more than two servings of alcohol to carry an “Alcohol Facts” panel on the back of the container. The Alcohol Facts panel must include the beverage’s serving size, number of servings per container, container size, %ABV, and the following statement: “According to the U.S. Dietary Guidelines, a serving contains 0.6 ounces of pure alcohol.”

Alcohol Facts

While the Alcohol & Tobacco Tax and Trade Bureau (TTB), the agency that regulates labeling of alcoholic beverages, must approve the Alcohol Facts panel on Four Loko labels, one would think that the FTC cleared this requirement with the TTB before including it in its order.  And if TTB approves the Alcohol Facts panel on Four Loko labels, that should open the door for other bottlers to use it on their products voluntarily.

Why is this important?  The Alcohol Facts panel will enable consumers to easily determine how many standard drinks are in a can or bottle.  For example, if the Alcohol Facts panel says a can or bottle contains 4 servings and that each serving contains 0.6 ounces of pure alcohol (i.e., a standard drink), then a consumer knows that the product contains the alcohol equivalent of four regular beers, four glasses of wine, or four shots of distilled spirits.  With this information, consumers can better modulate their alcohol intake.

Alcohol Facts labels will enable consumers to:

  • Follow the Dietary Guidelines advice on moderate drinking. The Dietary Guidelines recommends that men consume no more than two, and women no more than one, drink(s) per day on average.  A drink is defined as the amount of beer, wine, or spirits that contains 0.6 ounces of pure alcohol.
  • Follow the FDA’s warnings on aspirin and acetaminophen, which state: “If you consume 3 or more alcoholic drinks per day, ask your health professional whether you should take acetaminophen or other pain relievers…”
  • Avoid the many problems associated with over-consumption of alcohol, including alcohol abuse and drunk driving.

Almost ten years ago, the consumer groups National Consumers League, Consumer Federation of America, Center for Science in the Public Interest, and Shape Up America! petitioned TTB to require an Alcohol Facts panel on labels of all alcoholic beverages.  TTB published a proposed rule in 2007, received literally thousands of comments from the public in support, but never finalized it.  It’s possible the FTC order may give the TTB rulemaking new life.