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Blog: Food for thought: EU farming and the global opportunity

Met dank overgenomen van A.C. (Cecilia) Malmström, gepubliceerd op donderdag 8 december 2016.

Today I am talking trade with European farmers, following my helpful discussion last week with the European Parliament's agriculture committee on the global opportunities for that sector. And tomorrow, I'm taking part in the Joint Ministerial Trade Council of the EU and the African, Caribbean, and Pacific Group of States. So, today, a long blog post on what EU trade policy means for farmers - those who produce and process the food we eat and export.

(Also, today's speech to COPA-COCEGA farmers will be available here soon.)

European food and agriculture are at the very top of quality standards globally. People around the world appreciate both the know-how behind European products as well as our food safety. Seeing as markets outside the EU will be offering the biggest growth in the coming decades, European farmers have huge opportunities on international markets. And we are ambitious in seeking tariff cuts in the areas where we have a big export opportunity. That is no small achievement, given that the tariffs imposed by our trading partners around the world stand at an average 31% for dairy, 36% for beef, and 45% for wheat.

But our policy goes beyond just tariffs. For high-quality EU products, people across the world are prepared to pay a premium. And so, when we negotiate trade deals, we fight to protect the status and value of "geographical indications" as a guarantee of quality and authenticity - so that, if you're enjoying Roquefort cheese or Parma ham, you know you're enjoying the original, quality product - whether you're in Copenhagen, Cape Town or Calgary. Those legal protections increase the value of an already lucrative export market today worth €11.5 billion.

And we also push other countries to lift the unjustified or unreasonable regulatory barriers that might present a barrier to food exports. Of course, if there is genuinely a public health issue, governments have the right to protect their citizens; but sometimes restrictions are put up without such noble motivations, and health gets used by other countries as a spurious excuse for protectionism.

Our approach works. In the 5 years since our agreement with South Korea took effect, for example, our agricultural exports rose by nearly 40%. This is not only a recognition of the quality of EU products, it also means income for our farmers and more jobs in the agriculture and food-processing sectors. In our recent EU-Canada deal, the doubling of our export quotas we negotiated means this market could become worth 5% of all EU cheese exports.

This helps the economy. Last year, the EU agriculture export market was worth around €129 billion: that's a 27% increase since 2011. Exports of commodities and processed food support over 2 million jobs across the Union. While sectors like pig and dairy farming have indeed been through tough times lately, the opportunities of international trade are part of the solution.

Of course, trade isn't just about exports. By making imports easier, we can ensure consumers enjoy more choice and better prices on their store shelves. And we can help the farming community too: like those livestock farmers who depend on cheap, reliable supplies of animal feed - much of which may come from overseas. Of course, in any case, European standards continue to apply to any food sold in Europe, wherever it's from. So, for example, Canada can only sell us beef if it is hormone-free: our trade agreement with them does nothing to change that. And our strict rules on GMOs stay exactly the same.

Beyond the economics, trade policy should support our values - and that includes helping poorer nations develop, grow sustainably and create jobs. This is why we open our markets to products harvested by farmers in developing countries. Today, the EU is the largest importer of agriculture products from that part of the globe - the most open market in the world for developing countries' exports. Under the Economic Partnership Agreements that we make with countries in Africa, the Caribbean and the Pacific, the EU opens up fully and immediately, giving farmers and exporters in the developing world duty and quota-free access to the EU market of 500 million people. But the deals are asymmetric: developing countries can keep their own tariffs to protect the sectors they see as sensitive, and for agricultural products they often do. To take an example: under their partnership agreement with the EU, West African nations will keep their import tariffs on most dairy products like fresh milk and cheese, to protect their domestic industries. In some specific cases - such as milk powder sold in bulk - these countries have chosen to remove import tariffs, because they do not want to inflate the price of a product they see as a basic necessity for the poorest in their society. This seems like a reasonable choice, given that local markets cannot satisfy local nutritional needs. These countries also want to make this product more easily available to local industry that needs it as input for producing more sophisticated goods. In such cases, where domestic supply is unable to meet demand, trade is simply needed. This study shows how our agreement with West Africa will contribute to boost trade, production, economic growth and wages in the region.

In any case, there is no question of the EU "dumping" subsidised food onto the African market: export subsidies to Africa on agricultural products have been set at zero since at least 2009, and in 2014 we agreed to ban them altogether. The same applies to humanitarian food assistance. Unlike the practices of other countries around the world, the EU does not provide food assistance in kind - that is, in the form of goods as opposed to money. This means that the EU does not dump excess agricultural production as assistance. On the contrary, our development assistance is bought locally or in the region, to help local farmers. Only in specific, urgent cases when there is no local or regional food available, it can be shipped from the EU. In parallel, the EU is strongly supporting agricultural development in African countries as one of the priorities of our development policy. And as a result of substantial reforms of the Common EU Agricultural Policy, our own support to EU farmers - vital for our agricultural sector - is paid in ways that essentially do not distort neither trade, nor the market at such.

For me, agriculture is an area where trade policy can support both our economy, and our values. Food for thought, indeed.


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