Agriculture Issues in U.S.-EU Trade Negotiations

Agriculture Issues in U.S.-EU Trade Negotiations

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Updated July 21, 2016
Agriculture Issues in U.S.-EU Trade Negotiations
The Transatlantic Trade and Investment Partnership (T-TIP)
Other concerns involve the use of geographical indications
is a proposed free trade agreement between the United
(GIs), or the use of certain protected names, that many U.S.
States and the European Union (EU). Both sides seek to
food producers consider to be generic names.
liberalize transatlantic trade and investment, set globally
relevant rules and disciplines that could boost economic
Negotiations on agricultural products may be viewed in the
growth, support multilateral trade liberalization through the
context of longstanding, high-profile transatlantic trade
World Trade Organization (WTO), and address third-
disputes between the United States and the EU covering a
country trade policy challenges. Agricultural issues have
range of trade issues including SPS concerns and other
been actively debated in the context of market access but
types of nontariff barriers. Further complicating these
mainly within regulatory and intellectual property rights
negotiations are underlying regulatory and administrative
discussions. Negotiations began in July 2013.
differences between the United States and the EU in how
each addresses these issues within their respective borders.
The United States is among the world’s largest net
exporters of agricultural products, averaging more than
Figure 1. U.S.-EU Agricultural Trade, 1998-2015
$140 billion per year (2010-2015) The EU is an important
export market for U.S. agricultural exports and ranks as the
fifth largest market for U.S. food and farm exports. In
recent years, however, growth in U.S. agricultural exports
to the EU has not kept pace with growth in trade to other
U.S. markets, and imports from Europe currently exceed
U.S. exports to the EU. In 2015, U.S. exports of agricultural
products to the EU totaled $12 billion, while EU exports of
agricultural products to the United States totaled $20 billion
(Figure 1). This has resulted in a substantial trade deficit
for the United States and reversing the net trade surplus in
U.S. agricultural exports during the early 1990s.
Major U.S. agricultural exports to the EU include tree nuts,

soybeans, forest products, distilled spirits, vegetable oils,
Source: CRS, USDA-reported trade data for the EU-28 countries,
wine and beer, planting seeds, tobacco, and processed fruit
including the United Kingdom which recent voted to leave the EU.
and wheat. Major EU agricultural exports to the United
States include wine and beer, essential oils, snack foods,
SPS and Nontariff Trade Measures
processed fruits and vegetables, other vegetable oils,
SPS measures are laws, regulations, standards, and
cheese, cocoa paste/butter, live animals, nursery products,
procedures that governments employ as “necessary to
and red meats. The U.S. Department of Agriculture
protect human, animal or plant life or health” from the risks
(USDA) reports that the EU’s average agricultural tariff is
associated with the spread of pests, diseases, or disease-
30%, well above the average U.S. agricultural tariff of 12%,
carrying and causing organisms or from additives, toxins, or
including all products imported under an applied tariff and
contaminants in food, beverages, or feedstuffs. Technical
under a tariff rate quota (TRQ).
barriers to trade (TBTs) cover both food and nonfood
traded products. TBTs in agriculture include SPS measures
High EU average tariffs on U.S. exports are exacerbated by
but also include other types of measures related to health
the EU’s nontariff barriers to U.S. agricultural products.
and quality standards, testing, registration, and certification
Concerns include delays in reviews of biotech products
requirements, as well as packaging and labeling regulations.
(limiting U.S. exports of grain and oilseed products),
prohibitions on the use of growth hormones in beef
SPS/TBT measures regarding food safety and related public
production and the use of certain antimicrobial and
health protection are addressed in various multilateral trade
pathogen reduction treatments (limiting U.S. meat and
agreements and are regularly notified to and debated within
poultry exports), and complex certification requirements
the WTO. International trade rules recognize the rights and
(limiting U.S. processed foods, animal products, and dairy
obligations of governments to adopt and enforce such
products). EU regulations are also a concern for U.S.
requirements. These rules are spelled out primarily in two
exporters, including lack of a science-based focus in
WTO agreements: (1) the Agreement on Sanitary and
establishing sanitary and phytosanitary (SPS) measures,
Phytosanitary Measures, and (2) the Agreement on
difficulty meeting food safety standards and obtaining
Technical Barriers to Trade. In general, under the
product certification, the lack of cohesive labeling
agreements, WTO members agree to apply such measures,
requirements, and stringent testing requirements that are
based on scientific evidence and information, only to the
often applied inconsistently across EU member nations.
extent necessary to protect human, animal, or plant life and
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Agriculture Issues in U.S.-EU Trade Negotiations
health and to not arbitrarily or unjustifiably discriminate
Geographical Indications
between WTO members where identical standards prevail.
Geographical indications (GIs) are place names used to
Member countries are also encouraged to observe
identify products that come from these places and to protect
established and recognized international standards.
the quality and reputation of a distinctive product
Improper use of SPS/TBT measures can create substantial,
originating in a certain region. The term is most often
if not complete, barriers to trade when they are disguised
applied to wines, spirits, and agricultural products. Some
protectionist barriers, are not supported by scientific
food producers benefit from the use of GIs by giving certain
evidence, or are otherwise unwarranted.
foods recognition for their distinctiveness, differentiating
them from other foods in the marketplace. In this manner,
Regarding SPS/TBT measures between the United States
GIs can be commercially valuable. GIs may be eligible for
and the EU, major differences exist in how each applies
relief from acts of infringement or unfair competition. GIs
these measures and how each regulates food safety and
may also protect consumers from deceptive or misleading
related public health protection, which have likely
labels. Examples of registered or established GIs include
contributed to some longstanding trade disputes regarding
Parmigiano Reggiano cheese and Prosciutto di Parma ham
SPS and TBT rules between the two trading blocs. This
from the Parma region of Italy, Toscano olive oil from
includes formal WTO disputes involving meat and poultry
Tuscany, Roquefort cheese, Champagne from the region of
production and processing methods, such as the U.S. use of
the same name in France, Irish Whiskey, Darjeeling tea,
beef hormones, ractopamine, pathogen reduction treatment
Florida oranges, Idaho potatoes, Vidalia onions,
technologies, and certain other animal and plant processing
Washington State apples, and Napa Valley Wines.
regulations. Other SPS concerns have involved agricultural
biotechnology use and pesticide regulations.
The use of GIs has become a contentious international trade
issue, particularly for U.S. wine, cheese, and sausage
Some in Congress hope that the T-TIP negotiations will
makers. In general, some consider GIs to be protected
resolve longstanding trade disputes regarding SPS rules
intellectual property, while others consider them to be
between the two trading blocs and address SPS issues and
generic or semi-generic terms. GIs are protected by the
other nontariff barriers. Given the magnitude of regulatory
WTO Agreement on Trade-Related Aspects of Intellectual
differences and existing nontariff barriers between the
Property Rights (TRIPS). Under TRIPS, both the United
United States and the EU, some are concerned about
States and the EU have committed to providing a minimum
whether the T-TIP would be able to address such concerns
standard of protection for GIs to avoid misleading the
or whether the agreement might exclude agricultural
public and to prevent unfair competition.
products altogether. Regarding SPS and TBT matters,
among the goals of the negotiations are provisions that “go
Laws and regulations governing GIs differ markedly
beyond” the existing SPS and TBT agreements.
between the United States and the EU, which further
complicates this issue. In the EU, a series of regulations
Use of Agricultural Biotechnology
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 4,500 product names are registered and protected
bioengineer plants and animals so that they have certain
in the EU for foods, wine, and spirits originating in both EU
desired characteristics. In the United States, plantings of
member states and other countries. In the United States, GIs
genetically engineered (GE) varieties account for about 170
are geared toward brands and trademarks and protected
million planted acres annually. GE varieties now dominate
under the U.S. Trademark Act.
all U.S. soybean, cotton, and corn acreage, and plantings
continue to expand rapidly in other countries.
U.S. negotiators continue to be concerned that the EU’s
system for protecting GIs adversely impacts the protection
GE crops play a much more limited role in the EU: They
of trademark and market access for U.S. products that they
are currently cultivated in Spain, Portugal, the Czech
consider to be generic names. Bilateral trade concerns also
Republic, Slovakia, and Romania. GE crops account for
arise when a product name recognized as a protected GI in
about 1% of EU crop acreage. The EU’s regulatory
Europe is considered a generic name in the United States.
framework regarding biotechnology is generally regarded
GI protections afforded to registered products in third-
as one of the most stringent systems worldwide. Officials
country markets are another concern for U.S. agricultural
have been cautious in allowing GE products to enter the EU
exporters. This is especially true following a series of
market, and all GE-derived food and feed must be labeled.
recently concluded trade agreements between the EU and
Moreover, in 2015, the European Parliament adopted new
countries such as Canada, South Korea, South Africa, and
legislation to allow each member country to ban or approve
other countries, since many of these countries are also
GE crops within its territory, and many EU member states
major trading partners with the United States.
have applied to fully opt-out of GE cultivation.
Many U.S. producer groups assert that U.S. agricultural
For more detailed information on agricultural issues that
exports to the EU have been limited by EU labeling and
have been raised in the negotiations, see CRS Report
traceability regulations and lack of timelines and
R44564, Agriculture and the Transatlantic Trade and
transparency for admitting GE crops. Many in Congress
Investment Partnership (T-TIP) Negotiations.
have highlighted these concerns, pointing to key missed
deadlines for import approvals of biotechnology products
Renée Johnson, Specialist in Agricultural Policy
and failure by EU regulators to act as prescribed by EU law.
IF10240
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Agriculture Issues in U.S.-EU Trade Negotiations

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