AGRICULTURE could be a deal breaker for any final agreement on the Transatlantic Trade & Investment Partnership (TTIP).
European Union trade ministers are expected to move forward on an accord formalizing the start of TTIP negotiations by the end of June.
According to a recent report from the EU, the U.S. is the EU's biggest market for agricultural exports, while the EU is the fifth-largest market for the U.S. The EU surplus with the U.S. in 2012 reached a record $8.84 billion; in 2011, it was $6.76 billion.
In a letter to Michael Froman, White House deputy national security adviser for international economic affairs and nominee for U.S. trade representative (USTR), more than 40 organizations — ranging from commodity and livestock groups to the American Feed Industry Assn. and American Farm Bureau Federation — explained that if U.S. agriculture or selected segments of U.S. agriculture are excluded from the soon-to-be officially launched TTIP or are placed into a "future negotiation" category, the accord will likely fail to win the overall support of the food and agriculture sector — support that will be needed to ensure final congressional approval of the agreement.
What concerns the agricultural groups is a resolution regarding TTIP that passed the European Parliament April 24 and strongly expresses the intent of the EU to maintain the precautionary principle, "which would undermine sound science and, ultimately, the agreement itself," the groups warned.
The letter explained that "precaution" in the EU has become a pretext for import protectionism under the guise of consumer safety, and "as a result, U.S. exports have repeatedly paid the price."
Examples of such problems include unjustifiable restrictions on production methods that negatively affect exports of U.S. meat, poultry and dairy products, as well as fresh fruits; discriminatory and trade-restricting labeling requirements; political and regulatory barriers to agricultural biotechnology that restrict U.S. exports of corn, soybeans and processed corn and soy products, and the imposition of arbitrary sustainability requirements on the production of feedstocks in the U.S. and other countries for biofuels used in the EU.
"TTIP negotiations in agriculture carried out on the terms mandated by the EU Parliament would be an enormous mistake," the groups wrote.
They added that the best way to achieve an outcome on these matters that the food and agriculture sector can strongly support is to use the Trans-Pacific Partnership negotiating structure as a template for the TTIP talks. The goal of those talks is a comprehensive agreement covering all sectors without exceptions; all topics are to be concluded as a "single undertaking," which means that nothing is agreed to until everything is agreed to.
USTR, in conjunction with the Interagency Trade Policy Staff Committee, held a public hearing on May 29-30 at the International Trade Commission to solicit comments on U.S. negotiating objectives for the proposed TTIP.
In testimony, groups representing the poultry industry said history has provided very "strong and compelling evidence that the European Union will act aggressively to overly protect its domestic poultry-producing industry."
Prior to 1996, the U.S. had a growing export trade to the EU, but the EU announced that it would no longer accept poultry that had been processed using hyper-chlorinated water as an antibacterial rinse, which is a standard practice in the U.S.
Clay Hough, senior group vice president and general counsel on behalf of the International Dairy Foods Assn., testified that the U.S. faces a dairy trade deficit with the EU that exceeds $1 billion. Hough highlighted the importance of addressing EU's "overreach" on geographical indications.
"Fundamentally, the EU effort to claw back common cheese names under the guise of (geographical indications) is market restrictive and anathema to the spirit and goal of trade liberalization that is the driving force behind the TTIP negotiations," Hough testified.
EU regulatory barriers for biotech products are problematic for U.S. exporters and are expected to be particularly challenging while formulating negotiations for TTIP.
Richard Wilkins testified on behalf of the American Soybean Assn. of the sharp declines in soybean exports to the EU as a result of certain EU policies, including labeling biotech products and discriminatory policies on biofuel feedstocks under the Renewable Energy Directive.
In written comments, CropLife America said it has concerns with a change implemented in 2009 regarding the EU's pesticide regulation and registration that moved away from a science-based approach and use of risk assessment to guide decision-making.
The most recent example, the group said, is suspending the use of certain insecticides due to concerns for bee health despite the contradiction of scientific evidence.
"Trade in food, feed and seed products produced using pesticides in the U.S. and around the world will be impacted by the EU approach," CropLife warned.