TTIP, a proposed free trade agreement between the EU and the US, would be harmful to the environment, animal welfare and the European farm. A few facts at a glance.
TTIP stands for “Transatlantic Trade and Investment Partnership”. An agreement which should promote reciprocal trade and investments between the European Union and the United States. The economies of the EU and the US together are responsible for approximately half of the global gross national product, so its impact is potentially enormous.
Each member state of the EU will have to ratify the final deal. That is why in many European countries there are local protests for a ‘TTIP -free zone’.
What is the position of agricultural trade now?
Currently the EU is the dominant force in the agricultural trade. Last year the US achieved a clear export surplus of $16 billion (€14.2 billion) with the entire world, but a trade deficit of $12 billion, (€10.7 billion) with the EU. The deficit increased by 15% in 2015, mainly because typical American export products such as corn and soya have fallen considerably in price. The EU primarily exports processed foods with more added value. The US primarily exports raw materials.
What does TTIP mean for agriculture?
The EU and US want to lower import tariffs on more than 90% of all agricultural products. For products that were specified as ‘sensitive’, the aim is to use import quotas against a lower or zero rate. In the future, the EU and the US want to jointly develop standards with a global reach, in the sanitary and phytosanitary fields as well. The recognition of each other’s standards is on the table and, by working together more, the countries hope to prevent future conflicts about divergent standards, etc. Little is known about the actual content of TTIP, as negotiations are still taking place and both parties don’t want to share details as long as there is no overall agreement.
Where does the fear come from?
The coalition is afraid TTIP implies the EU will allow products produced in a way that is prohibited here. The US wants more access for beef,
transgenic crops, meat from animals produced with certain growth hormones, and the acceptance of chicken meat that has been cleaned with chlorine. Another fear is that small farms in the EU will be squeezed out of markets by large-scale American agriculture.
Who will win, the EU or the US?
In view of the large and growing agricultural trade deficit the US has with the EU, it seems unthinkable the US will agree to a deal that doesn’t bring American agriculture considerable benefits. In the scenarios calculated, the US always gains ground, while the gains remain limited for the EU. It is conceivable the EU will accept a loss in agriculture if they gain more in areas such as services or industrial products.
Who are the losers in Europe?
The big losers in the EU are primarily the beef producing industry and pig farmers. These industries are agitated because the EU is also negotiating market access with a bloc of South American countries that have a very competitive method of producing meat. The European export of dairy, vegetables and starting materials may gain ground, but from the perspective of global trade these products do not involve large figures.
When will the negotiations be finalised?
In early May, the German Federal Chancellor, Angela Merkel, and the American president, Barack Obama, expressed their wish to step up the pace of the negotiations. There are no hard deadlines, but negotiators are aiming for the end of 2016, right before or right after the American presidential elections.
And is the agreement a done deal?
No, it will have to be approved by the European Parliament and probably by all 28 Member States. The latter depends on whether the EU and the US do in fact conclude an agreement which goes beyond a traditional convention about tariff lines and quotas.