Most recently there is political backing for the European Union and United States to negotiate on the free trade agreement called the Transatlantic Trade and Investment Partnership (TTIP). The European Parliament gave its conditional approval and US Congress gave President Barack Obama a broad negotiating mandate to “fast-track” negotiations. The deal is not only about free trade in a strict sense, but also about the EU and the US setting common standards for global trade. The negotiation started in July 2013, and the agreement on agricultural trade is one of the toughest issues being discussed.
The EU and the US are large export markets for each other’s food and agricultural products. In 2014, the total value of EU’s food and agricultural exports to the US was €16 billion. The majority of the exports were processed food products and beverages. Various beverages, such as strong alcoholic beverages, wines, beer, and waters & soft drinks accounted for half of the value of the exports. In contrast, the main agricultural products imported from the US were nuts, fruits, soya bean, processed fruit and vegetables, and animal feed. The total value of EU’s food and agricultural imports from the US was €10 billion.
Even though the EU is a leading exporter of food products, its agricultural sector has adopted a defensive role because US agriculture is generally considered to be highly competitive and more efficient than EU agriculture in many respects. It is important for EU agriculture to reach a trade deal that allows the EU’s food safety and other standards to be imposed on products imported from the US. The EU policy is to ensure food safety throughout the food production chain, from primary production to the end product (farm to fork). In the US, it is enough that the product is safe according to the authorities (Food and Drug Administration) for consumption. The EU and the US have diverging views on issues such as the use of growth hormones in meat production, pathogen reduction treatments, genetically modified (GM) foods, animal cloning, and food safety regulations.
The EU and the US have diverging views on issues such as the use of growth hormones in meat production, pathogen reduction treatments, genetically modified (GM) foods, animal cloning, and food safety regulations.
Both the EU and the US are signatories of the Sanitary and Phytosanitary (SPS) agreement under the World Trade Organization (WTO), specifying that measures applied to protect human, animal or plant life or health must be based on science. However, the precautionary principle applies in the absence of scientific consensus, if there are any suspected risks of causing harm to the public or to the environment. The EU has made this precautionary principle a cornerstone of its risk management on issues concerning health and plant protection. In the US, the precautionary principle is seen as an excuse to build barriers to trade and the science-based method is the preferred and applied policy.
One significant disagreement between the parties is related to the EU’s ban on hormone-treated meat. At the heart of the dispute is the use of growth-enhancers in the final stages of feeding beef cattle, which is common in the US. This accelerates growth and improves the efficiency of feeding. No internationally recognised evidence exists of this method posing actual health risks to consumers. Nevertheless, the EU insists that the use of growth-enhancers is not necessary for meat production and should, therefore, be banned if there is even a minimal trace of health risks or decreasing animal welfare.
Another disputed issue is that US poultry meat has practically been shut out of the European market due to a ban on pathogen reduction treatments. This is because poultry meat in the US is commonly washed with chlorine in all poultry production facilities and traceability from “farm to fork” does not exist.
The EU’s negative stance concerning GM products and foods that contain them is also seen as a threat to US agricultural exports, and in some cases it has already obstructed trade. Behind the controversy are the widely different views of the EU and the US regarding GM products and their potential health and environmental effects. The US goal in the negotiations is to change the EU’s attitude to the approval and labelling of GM food products.
The harmonisation of regulations and standards would enable a significant growth in trade flows between the EU and US. Abandoning import duties on agricultural products and facilitating market access in general would bring many benefits to food companies on both sides of the Atlantic.
The EU and the US have very different food and agricultural policies, thus many trade policy disputes have arisen between them in recent decades. The slow progress of negotiations at the WTO in dealing with these issues has gradually shifted the policy focus of countries from multilateralism towards regionalism such as the TTIP. Food safety regulations and standards are the hardest part of the negotiations concerning agriculture. The harmonisation of regulations and standards would enable a significant growth in trade flows between the EU and US. Abandoning import duties on agricultural products and facilitating market access in general would bring many benefits to food companies on both sides of the Atlantic.
Studies suggest up to 80% of the gains from any future EU-US trade deal would come from improvements in regulations which protect people from risks to their health, safety, environment, financial and data security. Initially, the aim was to conclude the negotiation by the end of 2015, but now the goal is to finish the negotiation before the Obama Administration ends in January 2017. A successful conclusion calls for major compromises and a more flexible approach from both the EU and the US.