LegiStorm

Summary:

The Transatlantic Trade and Investment Partnership (T-TIP) is a proposed free trade agreement between the United States and the European Union (EU). Both sides seek to liberalize transatlantic trade and investment, set globally relevant rules and disciplines that could boost economic growth, support multilateral trade liberalization through the World Trade Organization (WTO), and address thirdcountry trade policy challenges. Agricultural issues have been actively debated in the context of market access but mainly within regulatory and intellectual property rights discussions. Negotiations began in July 2013, with an 11th negotiations round conducted in October 2015. The United States is among the world’s largest net exporters of agricultural products, averaging more than $135 billion per year (2010-2014). 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. However, in recent years, 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 2014, U.S. exports of agricultural products to the EU totaled $13 billion, while EU exports of agricultural products to the United States totaled $19 billion, resulting in a substantial trade deficit for the United States and reversing the net trade surplus in U.S. agricultural exports during the 1990s. Major U.S. agricultural exports to the EU include tree nuts, soybeans, forest products, distilled spirits, vegetable oils, wine and beer, planting seeds, tobacco, and processed fruit and wheat. Major EU agricultural exports to the United States include wine and beer, essential oils, snack foods, processed fruits and vegetables, other vegetable oils, cheese, cocoa paste/butter, live animals, nursery products, and red meats. The U.S. Department of Agriculture (USDA) reports that the EU’s average agricultural tariff is 30%, well above the average U.S. agricultural tariff of 12%. High EU average tariffs on U.S. exports are exacerbated by the EU’s nontariff barriers to U.S. agricultural products. Concerns include delays in reviews of biotech products (limiting U.S. exports of grain and oilseed products), prohibitions on the use of growth hormones in beef production and the use of certain antimicrobial and pathogen reduction treatments (limiting U.S. meat and poultry exports), and burdensome and complex certification requirements (limiting U.S. processed foods, animal products, and dairy products). EU regulations are also a concern for U.S. exporters, including lack of a sciencebased focus in establishing sanitary and phytosanitary (SPS) measures, difficulty meeting food safety standards and obtaining product certification, the lack of cohesive labeling requirements, and stringent testing requirements that are often applied inconsistently across EU member nations. Other concerns involve the use of geographical indications (GIs), or the use of certain protected names, that many U.S. food producers consider to be generic names. Negotiations on agricultural products may be viewed in the context of longstanding, high-profile transatlantic trade disputes between the United States and the EU covering a range of trade issues including SPS concerns and other types of nontariff barriers. Further complicating these negotiations are underlying regulatory and administrative differences between the United States and the EU in how each addresses these issues within their respective borders.