21 January 2016

EU-US deal: a “knock-out punch” for European farming

Multiple studies now indicate that quality EU food and farming will pay the price for TTIP

Simon McKeagney, Editor

A series of studies in recent months shed an increasingly negative light on the impact TTIP will have on European agriculture, if an agreement is eventually reached. 

Recent studies by a German foundation, as well as the US Department of Agriculture highlight future losses for European farming as a direct result of TTIP, adding weight to earlier studies commissioned by the European Parliament, the Irish government, the Hungarian government and academics in Slovenia, all of which indicate losses for certain parts of the farming sector in Europe.

The TTIP negotiations, which will enter their 12th round of talks on February 22nd, aim to in part reduce tariff and non-tariff barriers on agricultural produce. But a wide-gulf exists between the farming practices in both regions, in particular on controversial processes banned in the EU but commonplace in the US. The difference in practices is based on a different approach to food safety and include the often-cited US practice of washing chicken in chlorine, to the use of growth-promoting hormones in pigs and cattle, processes that the US agri-industry is lobbying hard for the EU to accept.

There are also huge differences in our treatment of genetically modified crops, with a virtual ban in Europe and widespread use in the USA, while the maximum residue levels for pesticides on fruit and vegetables is 500 times higher in the US than in the EU. At the same time, the lack of federal level animal welfare law in the US, and the proliferation of industrial factory-farming methods, is in stark contrast with Europe’s farm-to-fork approach.  Any efforts to harmonise regulations or claim equivalence in our standards could produce negative effects for EU agriculture, and put downward pressure on higher European standards.

German study- small EU farmers, big losers

UnternehmensGrün, a German Association of Green businesses, has released a study highlighting key concerns for small European farmers, which they fear will be “outgunned” by US agri-industry with unfair competition:

“European farms are still mainly small and family run, and cannot complete financially with large American businesses,” says the study’s author Dr. Katharina Reuter. She notes that the widespread use of genetically-modified technology and less restrictions on pesticide use in the US, make it impossible for European farmers to compete in the production of wheat, as one example.

The study also notes that meat farmers in Europe will not be able to compete with the economies of scale of large America industrial producers, whose cost-efficient methods are often at the expense of quality.

Reacting to the study, Green MEP Molly Scott-Cato said:

“This is scientific evidence that TTIP is a corporate charter, primarily aimed at benefitting large US agri-business and threatens rural livelihoods and communities. It also poses a threat to our precious countryside which depends on a successful farming sector.”

US Department of Agriculture: few gains for Europe

A USDA study, released in November 2015 has also come into the spotlight recently, following a detailed analysis by author and journalist Glyn Moody. He points out that “the EU’s agricultural sector will actually be worse off under the deal than it is now without it.” In particular, the gains for both sides in the USDA study are tiny- between 0.1% for the US and 2.9% for the EU. To put that in context, the Commission recently told BBC news that refugee crisis ‘would have a "small but positive" effect on EU economic output, raising GDP by 0.2-0.3%.’

More interesting are the 3 scenarios plotted by USDA. In each they note either decreases in EU exports or negligible gains. At the same time, they estimate potential gains for the US should TTIP spell an end to a raft of European health and safety regulations and policy decisions. Either way, it doesn’t look good for European farmers.


Scenario one (removal of tariffs and TRQs)

EU agricultural exports decrease by 0.25 percent, and agricultural imports rise by 0.5 percent. Among major U.S. agricultural export commodities, beef and dairy exports to the EU increase the most in percentage terms.

Scenario two (removal of select NTMs, in addition to tariffs and TRQs).

Overall, agricultural imports and exports each increase for the United States by about double the percentage in scenario one, while EU agricultural imports increase by 1 percent and agricultural exports decline.

Scenario three (effects of removal of NTMs on consumer demand)

The removal of select NTMs could lead to consumers preferring domestically produced products versus the importer equivalent. Thus, in the third scenario, export gains are smaller for both the United States and the EU. Potentially, these demand-side effects could erase any gains from the removal of specific NTMs. 

We've known for sometime that the US has more to gain when it comes to agriculture in TTIP. We also know that Commission officials are willing to sacrifice our farming standards as they consider agriculture a key bargaining chip to secure wins in other parts of the deal. In April 2014, DG Trade official Hiddo Houben, now one of the leading negotiators for TTIP, said at meeting in Washington:

"We are, I think at least in political terms, going to be giving more in agriculture than we get ... and in procurement we are hoping to get more that we give, because our market is more open today. At least that's what we would argue." 

These give-and-take concessions back up what many of the studies are already saying- that European farming will lose out. The question is, if the Commission are already factoring this into their negotiating strategy, then who if not the European negotiators, will defend European farming? 

Read: UK celebrity chef Jamie Oliver raises concerns over TTIP here

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