This document provides an overview of the EU perspective on the role of food and agriculture in the US-EU TTIP negotiations from the presentation given by Alan Matthews. The key points are: 1) While food and agriculture issues are not central to the economics of TTIP, they have a higher political profile. 2) There are long-standing disagreements between the US and EU on key tariff and regulatory issues in this sector, including hormones, GMOs, and labeling requirements. Compromises will be difficult. 3) The EU has given a strong mandate to conclude TTIP, but campaigns could require changes to the final agreement to ensure ratification given public sensitivity around food regulations.

1. AN EU PERSPECTIVE ON THE
ROLE OF FOOD AND
AGRICULTURE IN THE US-EU
TTIP NEGOTIATIONS
Alan Matthews
alan.matthews@tcd.ie
Trinity College Dublin, Ireland
Presentation to the Session “Transatlantic Trade and Investment Partnership:
Challenges and Opportunities”
IAMO Forum ”The Rise of the 'Emerging Economies': Towards
Functioning Agricultural Markets and Trade Relationships”
25-27 June 2014 | Halle (Saale), Germany
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2. Rapid approval to start negotiations
• 2011 US-EU Summit sets up High Level Working Group on
Jobs and Growth (HLWG)
• Oct 2012 European Parliament calls for launch of negotiations
on comprehensive US EU FTA
• Feb 2013 HLWG final report recommends launch of
negotiations on a comprehensive trade and investment
agreement
• March 2013 Commission proposes negotiating guidelines and
released impact assessment and independent study on
potential consequences
• March 2013 President Obama notifies Congress of intent to
negotiate TTIP under the procedures of the last lapsed TPA
TPA
• June 2013 Negotiations launched at G8 Summit in Northern
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3. But the many previous initiatives should limit
expectations...
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…even if the geopolitical and economic environment is
different today ?

4. Broad objectives of TTIP
• increase market access through the elimination of
barriers to trade and investment in goods, services, and
agriculture and the further opening of government
procurement markets
• enhance regulatory coherence and cooperation
• develop new rules in areas such as foreign direct
investment, intellectual property rights, labour, the
environment, and emerging “21st century” areas of trade
(e.g., regulating data flows, trade facilitation in a supply
chain environment, and the role of state-owned
enterprises)
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5. TTIP is not mainly about agriculture
• From EU perspective
• Seen as a potential stimulus for the EU economy still stuck in crisis
in crisis mode (parallel with the single market initiative in the early
early 1990s)
• Bilateral approaches to trade, investment and trade-related issues
issues such as standards and regulations could potentially set global
global standards in a multilateral framework
• As a defensive measure to avoid loss of market share through
through potential TPP between US and Asian economies
• Key sectors include autos, chemicals, financial services, public
procurement
• However, addressing food and agricultural trade irritants will have
will have political significance for final approval
• Baucus-Hatch letter to the USTR February 2013
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6. EU agrifood trade surplus with the US –
but mainly due to beverages and snacks
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Source: DG Agri, Monitoring Agri-food Policy 2004-1

7. EU negotiating objectives in food and
agriculture
• To eliminate all duties on bilateral trade, with the shared
objective of achieving a substantial elimination of tariffs
upon entry into force and a phasing out of all but the most
sensitive tariffs in a short time frame.
• To remove unnecessary obstacles to trade and investment,
including existing NTBs, through effective and efficient
mechanisms, by reaching an ambitious level of
regulatory compatibility for goods and services,
through mutual recognition, harmonisation and through
enhanced cooperation between regulators.
• Regulatory compatibility shall be without prejudice to
the right to regulate in accordance with the level
safety, consumer, labour and environmental
cultural diversity that each side deems
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Source: Council negotiating mandate, June 2013 and DG Trade SPS initial position paper July 2013

8. EU negotiating objectives in food and
agriculture – SPS issues
• The Parties shall establish provisions that build upon
the WTO SPS Agreement and on the provisions of the
veterinary agreement, introduce disciplines as regards
plant health and set up a bilateral forum for improved
dialogue and cooperation on SPS issues.
• Provisions of the SPS chapter will build upon the key
principles of the WTO SPS Agreement, including the
requirement that each side’s SPS measures be based on
science and on international standards or scientific risk
assessments, while recognising the rights for the
Parties to appraise and manage risk in
level of protection that each side deems
particular when relevant scientific evidence is insufficient,
but applied only to the extent necessary to protect human,
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Source: Council negotiating mandate, June 2013 and DG Trade SPS initial position paper July 2013

9. EU negotiating objectives in food and
agriculture – other issues
• Should seek provisions for the recognition of equivalence,
implementation of pre-listing of food-producing
establishments, preventing implementation of pre-
recognition of disease-free and pest-free health status of
the Parties and the principle of regionalisation for
both animal diseases and plant pests.
• Should aim at establishing cooperation mechanisms
which will, inter alia, discuss equivalence on animal
welfare between the Parties.
• The negotiations shall aim to provide for enhanced
protection and recognition of EU Geographical
through the Agreement, in a manner that complements
and builds upon the TRIPS also addressing the
relationship with their prior use on the US market with
the aim of solving existing conflicts in a satisfactory
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Source: Council negotiating mandate, June 2013 and DG Trade SPS initial position paper July 2013

10. US negotiating objectives in food and
agriculture
• Elimination of all tariffs on agricultural products
between the United States and the EU, with substantial
duty elimination on entry into force of the agreement,
transition periods where necessary for sensitive products,
and appropriate safeguard mechanisms
• Commitments to base SPS measures on science and
international standards or scientific risk assessments,
apply them only to the extent necessary to protect human,
animal, or plant life or health, and develop such measures
in a transparent manner, without undue delay; and to
establish an on-going mechanism for improved dialogue
and cooperation addressing bilateral SPS issues.
• Go beyond existing TBT commitments through
increased openness and transparency in setting standards
and regulations, equivalence of certification mechanisms
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Source: USTR T-TIP Negotiating Objectives Fact Sheet, Mar 2014

11. Tariffs on agrifood, 2012
Product group US
MFN applied
EU
MFN applied
Animal products 2.2 20.4
Dairy products 19.9 52.9
Fruits and vegetables 4.7 10.7
Coffee, tea 3.3 6.2
Cereals and preps. 3.1 17.1
Oilseeds, fats & oils 4.8 5,6
Sugars and confectionary 14.4 32,1
Beverages & tobacco 14.0 19.9
Other agric. products 1.1 4.3
Agrifood (simple) average 3.4 13.2
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Source: WTO World Tariff Profiles

12. Tariffs faced by US and EU exporters,
2011
MFN average of
traded tariff lines
Trade-weighted
Duty-free imports
Simple Trade-
weighted
Tariff lines
%
Value %
Average tariff faced by EU
agrifood imports to US
7.1 2.2 23.9 47.1
Average tariff faced by US
agrifood imports to EU
16.9 5.7 14.7 46.9
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Source: WTO World Tariff Profiles

13. Tariff negotiations
• US approach (adopted in prior FTA negotiations) is to seek
comprehensive elimination without exceptions for sensitive
sensitive products
• few exceptions – sugar with Australia and rice with Korea
• EU approach – tariff rate quota increases for sensitive products
• Sensitive products likely to include beef, pigmeat, poultry
• EU initial tariff offer proposes to eliminate duties on 96% of
of tariff lines immediately, 3% of tariff lines over time, and
maintain tariffs on 1% tariff lines for sensitive products
• Initial US offer only offers 69% duty-free tariff lines (UK CBI
CBI estimate) and has been rejected by the EU
• However, all agree that the main action in these negotiations is
negotiations is around non-tariff measures (NTBs)
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14. Significance of NTMs for processed foods
(food & beverages)
ECORYS (2009) US EU
Ad valorem equivalent of NTMs 73% 57%
After actionable NTMs addressed 35% 27%
Sector level percentage changes in income, output and exports following NTM
alignment (ambitious scenario – Long Run)
Economy-wide NTM
reductions
(i.e. reductions of NTMs in all
sectors simultaneously)
Sector-specific NTM
reductions
(i.e. reductions of NTMs only
in
the specific sector)
US EU US EU
Income (€bn) 1.2 5.0
Output % -2.1 0.9 -0.3 0.0
Exports % 3.0 5.4 2.4 0.8
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15. Significance of tariff and NTM barriers for
agriculture and processed foods
CEPR (2013)
Changes in EU output by sector (in per cent). 2027 benchmark, 20 per cent
direct spill-overs
Less ambitious More ambitious
US EU US EU
Agriculture
Output % -0.01 0.05 0.00 0.06
Exports % 0.67 0.41 1.07 0.22
Processed food
Output % -0.52 0.30 -1.13 0.57
Exports % 4.58 5.21 6.85 9.36
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16. SPS issues
• US and EU share basic mandate to achieve a high level
of food safety and consumer protection
• EU General Food Law 2002
• US Food Safety Modernization Act 2011
• Both laws contain many similarities in approach…
• ..but cultural, political and institutional differences
between the US and EU continue to result in different
perceptions of risk and thus different regulatory
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17. Perceived differences in US-EU SPS
regulatory approaches
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Source: BEUC, 2013

18. EU food safety outcomes not necessarily
superior to US experience
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19. SPS high-profile issues
• Beef hormones (banned in EU in 1985 but still permitted in US)
• Beta agonists e.g. ractopamine (widely used as feed additive for beef
and pigs in US but banned in EU in 1996 and zero tolerance for
residues despite disputed CODEX vote in 2012)
• Biotechnology (GM plants permitted in US since 1986 but restricted
beginning in 1990)
• Pathogen reduction treatments (PRTs) (generally not approved in
lactic acid to clean beef carcases permitted in 2013)
• US 1998 ban on EU beef imports due to BSE lifted in 2013, but import
clearance yet to be given.
• US dairy standards (Grade A Pasteurized Milk Ordinance)
• Proposed changes to EU pesticide regulations which would ban
substances classified as endocrine disruptors and set default low MRLs
• Antibiotics in animal feed (significantly restricted in the EU in 1998
banned for non-medical use in 2006)
• Cloning restrictions
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20. Geographical indications (GIs)
• EU position on GIs set out in Doha Round negotiations –
seeks TRIPS+ agreement on foodstuffs
• US protects GIs through its trademark system,
particularly certification and collective marks
• Two different systems – additional costs to register EU GIs
• Disagreement over generic names
• Precedents in the EU-Korea and Canadian CETA
agreements
• EU list of demands relatively short – just a few names of economic
significance
• ‘live and let live’ with respect to prior trademarks
• Compound names protected but not necessarily the individual
components
• US Senators ‘cheese names’ letter to USTR March 2014
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21. Food labels and other NTM issues
• Greater consistency in food label requirements would
seem an obvious area for coordination
• Organic labels (agreement under 2012 Organic
Equivalence Agreement)
• GM labelling (EU has long had GM labelling, US moving
towards this?)
• COOL labelling
• Nutrition labelling
• Sustainability certification (e.g. biofuels sustainability
standards under the EU RED)
• Horizontal issues (bioterrorism, customs, etc)
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22. The prospects for regulatory convergence
• Previous efforts have had limited success
• 1995 New Transatlantic Agenda
• formalizing regulatory cooperation agreements in virtually all areas of economic
regulation through a Joint EU-US Action Plan outlining over 150 specific areas of
cooperation
• 2002 Guidelines for Regulatory Cooperation and Transparency agreed to
encourage US and EU agencies to consult each other on a regular basis
• 2004 Roadmap for EU-US regulatory Cooperation and Transparency
• 2005 High-Level Regulatory Cooperation Forum set up
• Some successes in the agri-food area
• Veterinary Equivalence Agreement (1998)
• Wine Agreement (2006)
• Organic Equivalence Agreement (2012)
• Key issues
• How would an agreement affect EU decision-making on SPS and TBT issues?
• What enforcement mechanism would be available?
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23. Prospects for ratification
• Approval procedures in the EU following the Lisbon Treaty
• EU’s exclusive competence in commercial (trade) policy extended from
from trade in goods to services and IPR, as well as external investment
investment policy
• Mandate for the negotiations formulated by the Council which thus
retains the power to set the objectives for the negotiations
• Approval in the Council based on qualified majority voting
• agreements covering the new issues (services, IPR, investment) fall under
under unanimity except in three cases (domestic implementation by
unanimity, audiovisual services that affect cultural or linguistic diversity,
diversity, services in the social, education or health sectors).
• Agricultural negotiations “are not too tough to handle” – COPA
COPA COGECA Director, May 2014
• Strong mobilisation by civil society constituencies around
specific regulations and issues (including food)
• “governments are currently losing the public debate” (Novy, 2014)
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24. Prospects for ratification
• Role of the European Parliament
• Parliament can try to influence the mandate by adopting a
resolution prior to the Council (as it did in May 2013, successfully
arguing for exclusion of audio-visual services)
• Parliament also consulted in Commission’s ‘scoping exercise’ prior
to adoption of mandate
• Commission required to keep the Parliament (International Trade
Committee INTA) informed of trade negotiations on the same
basis as the Council’s Trade Policy Committee (governed by Annex
III of 2010 Interinstitutional Agreement)
• EP’s INTA updated by Commission before and after each round of
negotiations
• European Parliament consent required for all trade agreements
(similar to ‘up or down’ vote granted under TPA in the US)
• EP has used its power to refuse consent on various occasions since 2010
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25. Prospects for ratification
• Implications of recent European Parliament
elections
• Centre/right wing views on trade dominate in the current
Parliament
• Despite the rise of anti-EU and anti-establishment parties (up from
21% to 30% of seats), the two main groups (EPP and S&D) will
continue to dominate
• EP hearings to approve new Trade Commissioner Sept 2014
• TTIP will be a mixed agreement which also requires
ratification by 28 national parliaments
• Scope for carving out a separate agreement on exclusive
competence issues
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26. Conclusions and discussion
• Food and agricultural issues are not central to the
economics of these negotiations but have a higher political
profile along with other high-profile issues (data privacy,
ISDS, financial services).
• Key tariff and regulatory issues in the food and agriculture
area are all long-standing; compromises are possible but
high expectations should be avoided
• EU policy-makers have given strong mandates to conclude
TTIP but high-profile campaigns in the end game could
require fine-tuning of a draft agreement (EU-Korea FTA
as example)
• Should TTIP be open to other parties (most obviously,
Canada, Mexico, Turkey)?
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