Discussions surrounding the recently completed fifth round of talks on the U.S.-EU Transatlantic Trade and Investment Partnership became heated as interest groups in agriculture on both sides staked out positions. This was a change from earlier talks when sharp differences were down-played. The exchanges made the differences more obvious, but highlighted the real prospects for change.
The talks have a couple of interesting components that attract stakeholder input during the talks and provide information out flow after the talks. Negotiators take a break in the middle of the talks and receive information from stakeholders in public forums. Issues raised in public are then harder to avoid in private meetings. At the close of the week of negotiations, the two chief negotiators, Dan Mullaney for the U.S. and Ignacio Garcia Bercero for the EU, held a joint press conference.
The American Meat Institute in the public forum raised the issue of the EU importing U.S. beef from cattle fed growth hormones. EU officials responded that there was no possibility of that happening and the U.S. industry should have more realistic goals like increased quotas of hormone free-beef. In the closing press conference, Mullaney of the U.S. framed the issue as “building on the rules in the World Trade Organization on SPS measures, including the use of science, the use of risk assessment with respect to these measures.” Bercero of the EU took the angle of, “Hormone-treated beef is something that is prohibited under European Union law, and certainly we would not envisage any changes of our legislation.” The U.S. has won before at the WTO on the science, but the EU has not changed the law.
Biotech seed traits were also brought up in the press conference. Bercero said, “It is not that GMOs are prohibited in the European Union. More than 50 GMOs have been authorized. But there is an established procedure that needs to be followed before any GMO is authorized…” Mullaney came back again to WTO obligations, but acknowledged, “Our concern has mostly been with how the rule operates and not the regulation itself, per se.”
At the press conference, a member of the French media asked about “American chicken with bleach.” That was a question concerning the EU allowing the import of chicken meat from the U.S. rinsed with chlorinated water as a pathogen reduction treatment. Mullaney said again that this is a food safety issue based on science and risk assessment. Bercero agreed this is a food safety issue and that the EU Commission would be guided by scientific analysis by the European Food Safety Administration.
The U.S. Wine Institute, representing California wineries, addressed one of the most difficult issues – Geographic Indicators (GI). After 30 years of discussions, in 2006 the U.S. and the EU adopted the EU-U.S. Agreement on Trade in Wine. The Institute believes its provisions remain relevant and urged negotiators not to alter them in any way, arguing that the country has one of the most rigorous regulatory systems in the world for protecting place names for all wine producers.
According to reports by Inside U.S. Trade, the EU’s most controversial proposal is to discuss 17 wine names that the U.S. considers “semi-generic” names under the 2006 agreement and 75 kinds of cheese. The European Committee of Wine Companies gave a presentation generally at odds with the Wine Institute. The total EU list of 200 items is larger than what the EU Commission has pursued in other free trade agreements. That is not surprising given the broad range of agricultural products produced in the U.S. The EU Commission sees a victory on some GI issues as necessary to cover other changes it may have to accept. No changes on the GI issues may result in a failure to reach an agricultural agreement. This is not the first time that concerned has been voiced.
U.S. agriculture has more than a passing interest in regulatory reforms as a major buyer of inputs. Pesticides and chemicals were reported to be among the list of industries discussed. The Food and Drug Administration and the Environmental Protection Agency were among the U.S. regulators who sat in on the week of meetings. Regulatory cooperation will not be a one-size-fits-all policy and will differ by industry. Mullaney noted in his closing press conference opening remarks, “Our work in the regulatory space and in a few other areas is proving challenging, but these challenges were not unexpected.”
Both sides made initial offers on tariff reductions after the March meeting and are planning to make second offers before they meet again in July. Mullaney in the press conference said the U.S. offers were consistent with moving toward zero tariffs. Bercero said, “We had a good technical discussions on the initial tariff offers, and I think that at this point in time, no particular interest in looking backwards, much more in looking forward.” There is concern on the U.S. side that the EU is not prepared to go to zero tariffs on sensitive agricultural products like pork and beef.
There is a sense that the trade ministries of both governments are still trying to establish the talks as a serious exercise with a positive potential outcome. Mullaney felt a need to include in his closing press conference opening statement, ”Our objective, simply stated, is to reduce barriers and costs that arise due to unnecessary regulatory and standards differences between our two economies while maintaining, however, high levels of health, safety, and environmental protection.” Bercero expressed similar thoughts.
For the first time since the talks were proposed two years, there is a sense that negotiators are tackling the serious issues. Some analysts are suggesting that negotiators are trying to deal with some of the smaller issues and preparing to deal with the larger ones in 2015. So far, there appears to be very few easy issues. The negotiators should push ahead in round six like they did in round five and stakeholders should stay engaged until something that once appeared to be impossible becomes of interest to both sides.