Transatlantic trade partnership may open business
Sept. 10, 2013
Even though negotiations began only last July and preliminary meetings have been marked more by political jostling than negotiating progress, the food industry needs to maintain keen awareness of continuing talks aimed at creating the new Transatlantic Trade and Investment Partnership. That is the grand name for the trade deal envisioned between the United States and European Union that has been talked about for a long time without going anywhere until this year. It has been brought to actual negotiations by the economic recovery and the appreciation of President Barack Obama and the E.U. leadership for the opportunities existing for improving trade.
David Cameron, the British prime minister, has done a good job of describing possible gains from a successful negotiation by saying, “We’re talking about what could be the biggest bilateral trade deal in history, a deal that may have a greater impact than all the other trade deals on the table put together.”
The food industry’s focus in such a grand undertaking ought to center on what is likely to be the toughest part of the talks, and that is easing regulations that have as much to do with food dealings as markets and economic considerations. Undoubtedly, the United States will press hard to urge the E.U. to take steps to reduce its resistance to imports of bioengineered grains and food products that are now barred from the 27-nation bloc. Health issues also loom large for the E.U. where concerns are expressed about the way the United States may implement new laws governing food labeling as well as regulations having to do with origin. Agricultural trade issues that have been argued about since World War II ended still are vital enough to sap the energy of negotiators.
FoodDrinkEurope, the organization representing the food and drink industry of Europe, has not hesitated in hailing the start of trade negotiations by hoping that the partnership “will create new growth opportunities for Europe’s food and drink industry.” Pointing out that regulatory barriers are the greatest obstacle to agreeing on a mutually beneficial agreement, FoodDrinkEurope praised the E.U.’s commitment to “reducing red tape and avoiding divergent regulations for the future.” The European organization, like its American counterparts, has promised to provide active input to negotiators.
The European food industry has ambitiously declared that it looks to the partnership as an instrument for driving growth and facilitating access to “a major export market,” which it hints up to now has been beyond its total reach. That is a bit surprising since the United States is the premier market for the European food and drink industry, accounting for €13.6 billion ($18 billion) of export sales in 2012. The United States is the third largest supplier of E.U. food imports, exceeded by Brazil and Argentina. In the case of European exports to the United States, nearly 60% represents drinks, followed by dairy, vegetable oil and chocolate.
Realism about the current difficult state of the E.U. economy might account for a less aggressive stance by American food manufacturers. Easing the jungle of regulation that greets efforts to sell American food products into Europe, going far beyond the attitude about bioengineered products, stand as a suitable target for American negotiators to address on behalf of the domestic food industry. Coloring any hope from such an agreement is how the E.U. deals with its severe economic divisions. Questions are being raised about the course of integration among the 27 nations that now make up the E.U., regarding cultural as well as economic matters, which will determine whether agreement is achievable.
Successful conclusion of a Transatlantic Partnership requires Europe to establish the “common market” that has been its ultimate goal from the very beginning in the 1950s. So, it’s not just negotiation between America and the E.U. that will determine whether the food industry on either side benefits. It requires less U.S. regulation and more E.U. integration as essentials to moving forward.