The trade discussions under way have the potential of boosting America’s economic future to a degree we can barely imagine. Today, even before the deep reduction in trade barriers that the parlaying portends, the trans-Atlantic exchanges of goods and services approaches $1 trillion annually.
Trade is particularly important to US agriculture. According to the Congressional Joint Economic Committee “At $141.3 billion, agriculture accounts for 10 percent of all U.S. exports despite comprising less than five percent of gross domestic product….U.S. farmers, ranchers and food producers are well-positioned to capture an increasing share of the growing world market for agricultural products. The United States is the world’s leading exporter of agricultural products. Since 1960, the United States has posted a trade surplus in agriculture. Last year, this surplus totaled $38.5 billion.”
For many US crops trade is the key to profitability. In 2012, 43% of the wheat crop was exported as was 30% of the corn crop.
The trade agreements being negotiated have the potential to increase these numbers dramatically. A high priority therefore is to eliminate non-tariff barriers to agriculture trade and reduce barriers to agriculture exports. According to the Office of the United State Trade Representative, the US trade relationship with Europe “is the largest and most complex in the world”, with agriculture falling into the latter category.
As they approach the next round of talks in October, American representatives to the US-EU Free Trade Agreement negotiations need to pay special attention to Europe’s ever expanding non-tariff trade barriers in agriculture.
The good news is that as the negotiations start European leaders, and the European public, have embraced the idea of a closer relationship. That is the goal of the Trans-Atlantic Trade and Investment Partnership, “TTIP” as it is being called.
According to the Pew Research Center, seven out of ten voters in Italy and the United Kingdom support elimination of all trade barriers between Europe and the United States, as do a majority of Germans and Poles. Other surveys have shown that even in France nearly 70 percent of the people now have a favorable view of the U.S. This broad support is one reason why, according to The Economist magazine, “A free-trade pact has never had such support in the chancelleries of Europe”.
But there is also bad news for those of us in agriculture. Even while European negotiators work with their American counterparts to lower trade barriers, European regulators are busy raising new barriers, making the trade talks vastly more challenging.
It is already certain that agricultural trade will be one of the thorniest aspects of the discussions. Agricultural protectionism has long been a staple of European Union policy. The EU’s Common Agricultural Policy has become notorious throughout the world. Finding the political will and mutually acceptable formulas to lower the walls that currently inhibit the exchange of agricultural goods is certain to prove among the most difficult tasks – if not THE most difficult task – of this round of bargaining. Both sides should do all they can to avoid making more vexatious what is already destined to be an extremely vexing task.
In recent months, the European Commission has complicated the trade talks immeasurably by increasing non-tariff trade barriers via new regulations that are not based on sound science. The Commission has promulgated a new set of mandates that, should they go into effect, would effectively ban a quarter to a third of all US agricultural output from sale in Europe and effectively ban from import entire categories of American manufactured products for controlling weeds, funguses, insects and other pests that cripple farming.
Instead of measuring risks through scientific standards the new rules would simply say “no” to a number of pesticides, and “no” to fruits, vegetables and grains with even the smallest residue on them.
One of the world’s top academic journals, Regulatory Toxicology and Pharmacology recently published an open letter of protest from eighteen prominent scientists denouncing the regulations as without scientific merit. Other scientists have noted that the criteria the Commission has used to determine which chemicals to keep out is based on how the substances behaves rather than the effect they have.
Prime Minister David Cameron, speaking at a G8 event in June, said “I would argue that we need to ensure a pro-science culture. …We need to be open to arguments from science. The Times of London went further on June 21 and said Europe was “hypocritical” and “anti-science” when it comes to agriculture and the regulation of food.
Our negotiators must make it clear to their European counterparts that this absolutist “cut off” rule is a non-starter. It will senselessly close Europe to vast volumes of agricultural and agricultural chemical imports from the United States. Fair and rational regulation must be based on science. The United States will negotiate with Europe in good faith. We expect no less of our friends across the pond.
The bottom line is this. The TTIP negations will be difficult enough with existing EU policy and regulations. It is a sign of bad faith for the EU to continue erecting new trade barriers that will then have to be dismantled as a part of TTIP.
A successful trade agreement with Europe can be a major boost to our economy, the European economy and, as a bonus, put global food security within reach. The parties just need to follow the science and be honest with the public. The G-8 has embraced sound science and new technology in order to achieve global food security. They need to follow the same commitment in order to complete an historic trade agreement with TTIP.
Marshall Matz, formerly Counsel to the Senate Committee on Agriculture, founded the World Food Program-USA, and works with the Alliance for a Green Revolution in Africa. He specializes in agriculture and food policy at OFW Law in Washington, D.C. mmatz@ofwlaw.com
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