June 12, 2015
Agriculture Issues in U.S.-EU Trade Negotiations
The Transatlantic Trade and Investment Partnership (T-TIP)
High EU average tariffs on U.S. exports are exacerbated by
is a proposed free trade agreement between the United
the EU’s nontariff barriers to U.S. agricultural products.
States and the European Union (EU). Both sides seek to
Concerns include delays in reviews of biotech products
liberalize transatlantic trade and investment, set globally
(limiting U.S. exports of grain and oilseed products),
relevant rules and disciplines that could boost economic
prohibitions on the use of growth hormones in beef
growth, support multilateral trade liberalization through the
production and the use of certain antimicrobial and
World Trade Organization (WTO), and address third-
pathogen reduction treatments (limiting U.S. meat and
country trade policy challenges. Agricultural issues have
poultry exports), and burdensome and complex certification
been an active topic of debate in the context of market
requirements (limiting U.S. processed foods, animal
access negotiations but mainly within regulatory and
products, and dairy products). EU regulations are also a
intellectual property rights discussions. Negotiations began
concern for U.S. exporters, including lack of a science-
in July 2013, with a ninth negotiations round in April 2015.
based focus in establishing sanitary and phytosanitary
(SPS) measures, difficulty meeting food safety standards
The United States is among the world’s largest net
and obtaining product certification, the lack of cohesive
exporters of agricultural products, averaging more than
labeling requirements, and stringent testing requirements
$120 billion per year (2009-2013). The EU is an important
that often are applied inconsistently across EU member
export market for U.S. agricultural exports and ranks as the
nations. Other concerns involve the use of geographical
fifth largest market for U.S. food and farm exports.
indications (GIs), or the use of certain protected names, that
However, in recent years, growth in U.S. agricultural
many U.S. food producers consider to be generic names.
exports to the EU has not kept pace with growth in trade to
other U.S. markets, and imports from Europe currently
Negotiations on agricultural products may be viewed in the
exceed U.S. exports to the EU. In 2013, U.S. exports of
context of long-standing, high-profile transatlantic trade
agricultural products to the EU totaled $10 billion, while
disputes between the United States and the EU, covering a
EU exports of agricultural products to the United States
range of trade issues including SPS concerns and other
totaled $17 billion, resulting in a substantial trade deficit for
types of nontariff barriers. Further complicating these
the United States and reversing the net trade surplus in U.S.
negotiations are underlying regulatory and administrative
agricultural exports during the 1990s.
differences between the United States and the EU in how
each addresses these issues within their respective borders.
Figure 1. U.S.-EU Agricultural Trade, 1980-2013
SPS and Related Nontariff Trade Measures
SPS measures are laws, regulations, standards, and
procedures that governments employ as “necessary to
protect human, animal or plant life or health” from the risks
associated with the spread of pests, diseases, or disease-
carrying and causing organisms, or from additives, toxins,
or contaminants in food, beverages, or feedstuffs. Technical
barriers to trade (TBTs) cover both food and nonfood
traded products. TBTs in agriculture include SPS measures,
but also include other types of measures related to health
and quality standards, testing, registration, and certification
requirements, as well as packaging and labeling regulations.
SPS/TBT measures regarding food safety and related public
Source: CRS, USDA-reported trade data for the EU-27 countries.
health protection are addressed in various multilateral trade
Major U.S. agricultural exports to the EU in 2013 were tree
agreements and are regularly notified to and debated within
nuts, soybeans, forest products, distilled spirits, vegetable
the WTO. International trade rules recognize the rights and
oils, wine and beer, planting seeds and tobacco, and
obligations of governments to adopt and enforce such
processed fruit and wheat. Major EU agricultural exports to
requirements. These rules are spelled out primarily in two
the United States were wine and beer, essential oils, snack
WTO agreements: (1) the Agreement on Sanitary and
foods, processed fruits and vegetables, other vegetable oils,
Phytosanitary Measures and (2) the Agreement on
cheese, cocoa paste/butter, live animals, nursery products,
Technical Barriers to Trade. In general, under the
and red meats. The U.S. Department of Agriculture
agreements, WTO members agree to apply such measures,
(USDA) reports that the EU’s average agricultural tariff is
based on scientific evidence and information, only to the
30%, well above the average U.S. agricultural tariff of 12%. extent necessary to protect human, animal, or plant life and
health; and to not arbitrarily or unjustifiably discriminate
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Agriculture Issues in U.S.-EU Trade Negotiations
between WTO members where identical standards prevail.
Many U.S. producer groups assert that EU labeling and
Member countries also are encouraged to observe
traceability regulations and lack of timelines and
established and recognized international standards.
transparency in the EU process for admitting GE crops and
Improper use of SPS/TBT measures can create substantial,
products have limited U.S. agricultural exports to the EU.
if not complete, barriers to trade when they are disguised
protectionist barriers, are not supported by scientific
Geographical Indications
evidence, or are otherwise unwarranted.
Geographical indications (GIs) are geographical names that
Regarding SPS/TBT measures between the United States
act to protect the quality and reputation of a distinctive
and the EU, major differences exist in how each applies
product originating in a certain region. The term is most
these measures and also how each regulates food safety and
often, although not exclusively, applied to wines, spirits,
related public health protection, which have likely
and agricultural products. Some food producers benefit
contributed to some long-standing trade disputes regarding
from the use of GIs by giving certain foods recognition for
SPS and TBT rules between the two trading blocs. This
their distinctiveness, differentiating them from other foods
includes formal WTO disputes involving meat and poultry
in the marketplace. In this manner, GIs can be
production and processing methods, such as the U.S. use of
commercially valuable. As intellectual property, GIs also
beef hormones and ractopamine, pathogen reduction and
may be eligible for relief from acts of infringement or
other treatment technologies, bovine spongiform
unfair competition. The use of GIs also may protect
encephalopathy-related regulations, and other plant
consumers from deceptive or misleading labels. Examples
processing regulations. Other SPS concerns between the
of GIs include Parmesan cheese from the Parma region of
United States and the EU involve the use of agricultural
Italy, Tuscan olive oil, Champagne, and Irish whiskey.
biotechnology and pesticide regulations.
Other examples are Florida oranges, Idaho potatoes, Vidalia
onions, Washington State apples, and Napa Valley wines.
Some Members of Congress hope that the T-TIP
negotiations will resolve long-standing trade disputes
The use of GIs has become a contentious international trade
regarding SPS rules between the two trading blocs, as well
issue, particularly for U.S. wine, cheese, and sausage
as to address SPS issues and other nontariff barriers. Given
makers. In general, some consider GIs to be protected
the magnitude of regulatory differences and existing
intellectual property, while others consider them to be
nontariff barriers between the United States and the EU,
generic or semi-generic terms. GIs are protected by the
particularly regarding SPS matters, some are concerned
WTO Agreement on Trade-Related Aspects of Intellectual
about whether the T-TIP would be able to address such
Property Rights (TRIPS). Under TRIPS, both the United
concerns, or whether the agreement might exclude
States and the EU have committed to providing a minimum
agricultural products altogether. Regarding SPS and TBT
standard of protection for GIs to avoid misleading the
matters, among the goals of the negotiations are provisions
public and to prevent unfair competition.
that “go beyond” both the existing SPS and TBT
agreements.
Laws and regulations governing GIs differ markedly
between the United States and the EU, which further
Use of Agricultural Biotechnology
complicates this issue. In the EU, a series of regulations
governing GIs was initiated in the early 1990s covering
Agricultural biotechnology refers primarily to the use of
agricultural and food products, wine, and spirits. Currently,
recombinant DNA techniques to genetically modify or
more than 3,000 product names are registered and protected
bioengineer plants and animals so that they have certain
in the EU for foods, wines, and spirits originating in EU
desired characteristics. In the United States, plantings of
member states and also in other countries. In the United
genetically engineered (GE) varieties have increased to
States, GIs are geared toward brands and trademarks and
171.7 million acres in 2012 and now account for more than
protected under the U.S. Trademark Act.
50% of acres planted to major crops. GE varieties now
dominate (more than 90%) of all soybean, cotton, and corn
U.S. negotiators continue to be concerned that the EU’s
acreage in the United States, and they continue to expand
system for protecting GIs adversely impacts the protection
rapidly in other countries.
of trademark and market access for U.S. products that they
consider to be generic names. Bilateral trade concerns also
GE crops play a much more limited role in the EU; they
arise when a product name recognized as a protected GI in
currently are cultivated in Spain, Portugal, the Czech
Europe is considered a generic name in the United States.
Republic, Slovakia, and Romania. GE crops account for
GI protections afforded to registered products in third-
about 1% of EU crop acreage. Also, several EU countries
country markets are another concern for U.S. agricultural
have banned the cultivation of GE crops in their territories
exporters. This is especially true following a series of
or have specific rules on the trade of GE seeds. In January
recently concluded trade agreements between the EU and
2015, the European Parliament voted to allow each member
countries such as Canada, South Korea, South Africa, and
country to ban or approve GE crops in their respective
other countries, since many of these countries are also
country. In general, EU officials have been cautious in
major trading partners with the United States.
allowing GE products to enter the EU market, and all GE-
derived food and feed must be labeled as such. The EU’s
Renée Johnson, rjohnson@crs.loc.gov, 7-9588
regulatory framework regarding biotechnology generally is

regarded as one of the most stringent systems worldwide.
IF10240
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