Seminar: Effects of the EU bilateral trade agreements on agriculture and food sectors 16 December 2016, Helsinki The impacts of the TTIP agreement on the EU and Finnish agricultural sector Mrs Ellen Huan-Niemi, Senior Research Scientist, Natural Resources Institute Finland

1. © Natural Resources Institute Finland
Ellen Huan-Niemi (Luke)
Jyrki Niemi (Luke)
Janne Niemi (VATT)
The impacts of the TTIP
agreement on the EU and
Finnish agricultural sector

2. EU-US Agricultural Trade
• The EU is the world’s largest importer of agricultural and
food products, followed by the US and China.
• US exports of agricultural and food products to the EU
accounted for only 10% of EU’s agricultural imports in
2015, down from 17% in 1995.
• EU agricultural imports more than doubled over the past
two decades, reaching a robust $126 billion in 2015,
however US exports to the EU increased at a slower rate
– rising only 17% over the same period.
• US exports of consumer-oriented products have been a
key propeller of the growth, but EU tariff and non-tariff
measures (NTMs) continue to challenge US export growth
to the EU.

3. (USDA 2016)
3
Bulk
Bulk
Consumer
Consumer

4. 4
Composition of US exports to the EU in 2015
Source: European Commission 2016
Total = 40%

5. (USDA 2016)
17%
Brazil &
Argentina
5

6. Five different scenarios for the TTIP
• Business as usual with no TTIP agreement;
• A complete removal of tariffs between the EU and US, but all the
non-tariff measures (NTMs) are still in place;
• A complete removal of tariffs between the EU and US plus the non-
tariff measures (NTMs) are lowered by 25%, but excluding beef
and dairy products;
• A complete removal of tariffs between the EU and US plus the non-
tariff measures (NTMs) are lowered by 25% for all agricultural
products;
• A complete removal of tariffs between the EU and US plus the non-
tariff measures (NTMs) are lowered by 25% for all agricultural
products; however, there is a strong preference for domestically
produced products and labels by consumers only in the EU.

7. US Total Exports of Agricultural Products to the EU in 2025
Million US Dollars
2713
1434
2022
99
2862
593
998
3030
717
3028
530
9339
3501
1725
1153
1753
82
2124
435
565
1088
601
996
344
6915
2858
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Business as usual
Tariff removal only
NTMs -25% excluding beef and dairy
NTMs -25% all sectors
NTMs -25% all sectors with preference for
EU domestic products
7

8. US Total Exports of Bovine Meat to the EU Member States in 2025
0,8 3,3
31
0,1
79
4,3
503
275
28
73
1
0
100
200
300
400
500
600
Business as usual
Tariff removal only
NTMs -25% excluding beef and dairy
NTMs -25% all sectors
NTMs -25% all sectors with
preference for domestic products
Million US Dollars
8

9. US Total Exports of Poutry and Pig Meat to the EU Member States in 2025
1,4
40
3,5
58 27 11,3
1683
25 49
1128
4,2
0
200
400
600
800
1000
1200
1400
1600
1800
Business as usual
Tariff removal only
NTMs -25% excluding beef and dairy
NTMs -25% all sectors
NTMs -25% all sectors with
preference for domestic products
Million US Dollars
9

10. US Total Exports of Dairy Products to the EU Member States in 2025
3,6 22 23 3,4
828
3,6
867
1101
94 77
5,8
0
200
400
600
800
1000
1200
Business as usual
Tariff removal only
NTMs -25% excluding beef and dairy
NTMs -25% all sectors
NTMs -25% all sectors with
preference for domestic products
Million US Dollars
10

11. US Total Exports of Other Food Products to the EU Member States in 2025
101
216 268
98
1543
293
2641
2007
254
1677
242
0
500
1000
1500
2000
2500
3000
Business as usual
Tariff removal only
NTMs -25% excluding beef and dairy
NTMs -25% all sectors
NTMs -25% all sectors with
preference for domestic products
Million US Dollars
11

12. 12
US Agricultural Production in 2025 compared to BAU
Million US Dollars
643
1 704
1 650
535
1 167
6 048
1 229
2 547
2 183
795
1 990
9 732
0 2 000 4 000 6 000 8 000 10 000 12 000
Bovine meat
Poultry and Pig meat
Dairy products
Beverages and Tobacco
Primary Agriculture
Processed Food Products
NTMs -25% all sectors
Tariff removal only

13. 13
EU Production of Primary Agriculture according to region
in 2025 compared to BAU
Million US Dollars
-12
-18
-330
-261
-292
-719
-1 678
-27
-38
-479
-364
-336
-1 353
-2 789
-3 000 -2 500 -2 000 -1 500 -1 000 -500 0
Finland
Denmark
Germany
UK and Ireland
Benelux
Mediterranean EU
EU28
NTMs -25% all sectors
Tariff removal only

14. 14
EU Production of Processed Food Products according to region
in 2025 compared to BAU
Million US Dollars
20
68
-64
-425
-620
224
-922
17
75
50
-521
-498
538
-446
-1 000 -800 -600 -400 -200 0 200 400 600 800
Finland
Denmark
Germany
UK and Ireland
Benelux
Mediterranean EU
EU28
NTMs -25% all sectors
Tariff removal only

15. 15 15.12.2016
Composition of EU exports to the US in 2015
Source: European Commission 2016
Total = 50%

16. EU Total Exports of Agricultural Products to the US in 2025
Million US Dollars
9 143 15 5
1013
74 6 50
997
505
34
2951
10941
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
12000
Cereals Fruit &
vegetables
Oilseeds Fibre
Crops
Other
Crops
Animal
Products
Bovine
Meat
Poultry &
Pig Meat
Vegetable
Oil
Dairy
Products
Sugar Other
Food
Products
Beverages
& Tobacco
Business as usual
Tariff removal only
NTMs -25% excluding beef and dairy
NTMs -25% all sectors
16

17. Total Exports of Beverages & Tobacco from
the EU Member States to the US in 2025
Million US Dollars
17
14 48
438
22
582
165
1634
1356
40
5896
746
0
1000
2000
3000
4000
5000
6000
7000
Business as usual Tariff removal only NTMs -25% excluding beef and dairy NTMs -25% all sectors
more than 30 times
compared to Finland

18. Total Exports of Other Food Products from
the EU Member States to the US in 2025Million US Dollars
18
10
85
52 31
519
117
262 290
197
1332
55
0
200
400
600
800
1000
1200
1400
1600
Business as usual Tariff removal only NTMs -25% excluding beef and dairy NTMs -25% all sectors
more than 8 times
compared to Finland

19. Total Exports of Dairy Products from
the EU Member States to the US in 2025
Million US Dollars
19
18 18
2 3
8
40
9 14
78
309
6
0
50
100
150
200
250
300
350
Business as usual Tariff removal only NTMs -25% excluding beef and dairy NTMs -25% all sectors

20. (USDA 2016)
US Trade Deficit in Agricultural Trade with the EU
20

21. US Trade Surplus in Agricultural Trade with the World
21

22. EU Agricultural Trade Balance with the US in 2025
Million US Dollars
7963
33
-3822
-5243
6042
-6000
-4000
-2000
0
2000
4000
6000
8000
10000
Business as usual
2025
Tariffs removal only
2025
NTMs -25%
excluding
beef & dairy
2025
NTMs -25%
all sectors
2025
NTMs -25% all
sectors with
preference for EU
domestic products
22

23. 23
GDP in 2025 compared to BAU
1,5 %
1,5 %
1,5 %
1,8 %
1,5 %
1,4 %
2,2 %
2,2 %
1,8 %
1,5 %
1,4 %
1,7 %
1,6 %
1,7 %
1,7 %
1,6 %
2,1 %
1,6 %
1,5 %
2,4 %
2,5 %
2,0 %
1,6 %
1,5 %
1,8 %
1,9 %
0,0 % 0,5 % 1,0 % 1,5 % 2,0 % 2,5 % 3,0 %
Finland
Denmark
Sweden
Baltic
Germany
Poland
UK and Ireland
Benelux
Balkan
Mediterranean EU
Central EU
EU28
US
NTMs -25% all sectors
Tariff removal only

24. 24
Contribution of the changes in terms of trade until 2025 to welfare
Million US Dollars
195
187
2 120
1 470
1 340
3 865
10 378
-10 585
912
826
7 776
5 766
3 552
14 155
38 822
-24 364
-30 000 -20 000 -10 000 0 10 000 20 000 30 000 40 000 50 000
Finland
Denmark
Germany
UK and Ireland
Benelux
Mediterranean EU
EU
United States
NTMs -25% all sectors
Tariff removal only

25. • The US agenda in the TTIP negotiations will definitely include the
total liberalisation of agricultural tariffs and partial removal of
non-tariff measures (NTMs) in order to propel the export growth
of consumer-oriented agricultural products to the EU market and
close-up the trade deficit with the EU.
• The US will experience a dramatic increase in the exports of
agricultural products to the EU with the implementation of the
TTIP, especially for meat, dairy and other processed food
products.
• In contrast, the EU agricultural exports to the US will grow at a
slower pace compared to the US with the implementation of the
TTIP, and the growth is concentrated on beverages, other
processed food products and dairy products.
Conclusions

26. • The total liberalisation of agricultural tariffs and partial removal of
non-tariff measures will push the EU agricultural trade balance
into a large trade deficit, however the strong preference for
domestically produced products and labels by the EU consumers
will maintain the long-term trade surplus for the EU.
• The gains for Finland in the upsurge of agricultural trade between
the EU and the US will be minimal due to the implementation of
the TTIP.
• The increase in trade between the EU and US will generate GDP
growth both in Finland and the rest of the EU in the period of ten
years. In addition, the improvement in the terms of trade will
generate positive welfare effects for both Finland and the EU,
thus the TTIP agreement as whole will be a stimulus for the
economies of the EU member states.
Conclusions

27. 27 15.12.2016Teppo Tutkija