Focus: Sticky issues remain in EU-US free trade talks
Food sector event highlights hurdles for TTIP negotiators
European food manufacturers welcomed progress on a transatlantic free trade deal at a meeting of negotiators and business leaders in Brussels last week. However, EU and US food manufacturers also took the opportunity to highlight a number of sticking points - from US non-tariff barriers to EU geographical indications. Andrew Byrne reports.
Negotiations to liberalise trade between the EU and US could open up considerable opportunities for food manufacturers on both sides of the Atlantic and have been roundly welcomed by food industry representatives. Nevertheless, there remain some concerns among those working in the food sectors of both markets.
Speaking to officials and industry representatives at the meeting in Brussels last week, Roxane Feller, economic affairs director at trade association FoodDrinkEurope, said: "The United States is our top trading partner. This is an opportunity we cannot miss to create a combined market for our goods. We believe that if negotiators can bring down obstacles, we can have more trade and create more jobs."
The stakeholders forum meeting was hosted by the European Commission and brought together industry representatives with US and EU negotiators, now in their sixth round of talks on the ambitious trade pact - the Transatlantic Trade and Investment Partnership (TTIP).
Feller said all EU exporters of processed food and drink products would benefit from a comprehensive TTIP. EU food manufacturers exported products worth EUR13.6bn (US$18.4bn) to the US in 2012, and imported US food and drink products worth EUR3.6bn in the same year.
Bringing down non-tariff barriers could help European food exports considerably but which products would gain most from a free trade pact?
"We anticipate that those products that are most exported will benefit more from reduced administrative burden. Some of our key products exported to the US are beverages, followed by dairy, oils and chocolate," Feller said.
However, food industry representatives warned recent regulatory changes in the US had created additional hurdles for European exports, which should be addressed by the TTIP talks.
Some of the most high profile of these included regulations from the 2011 US Food Safety Modernization Act (FSMA) and costly inspection fees arising from the Foreign Supplier Verification Programme (FSVP). European exporters of Grade A dairy products, (including fluid milk, cream, cottage cheese and yoghurt) face complex health standards checks and exporters must sign agreements with a US state which guarantees the quality of the goods before they can be sold more widely across the country.
Meanwhile, egg processors agreed TTIP offered opportunities for European exporters but also expressed concern about the risk of a deal causing a major influx of cheap yolks from the US, where the regulations on treatment and processing of eggs differ greatly.
"Our main interest is to export more albumen powder but we are very much afraid of a yolk tsunami from the US," said Clara Hagen, Secretary General of the European Egg Processors Association (EEPA). "Farmers in EU have invested a lot in animal welfare - the costs amount to 15% of costs of producing shell eggs for instance."
Hagen warned that, although EU egg producers are protected by subsidies, US processors face lower costs due to America's weaker animal welfare legislation. On the other side, the US egg market remains partially closed off to European exporters because US producers use different food safety processes, such as egg washing.
"Many EU countries have to go through time consuming process to export eggs to the US on a country-by-country basis while we have no barriers to any US egg imports. Why are we open to their products - which are safe - when they are not fully open to ours, which are also safe?"
The difficulties European food exporters face complying with US regulatory barriers was a common theme at the event, and participants said these were likely to be the most difficult issues to resolve.
"European food and drink manufacturers face a number of challenging sanitary and phytosanitary [SPS] obstacles and technical barriers when trying to export to the US - all SPS related issues will be the most problematic," Feller said.
Barriers include US restrictions on sales of European exports of uncooked meat products, and administrative checks on black olives exports.
But non-tariff trade barriers are, of course, not only a problem for EU companies. Another perennial irritant in the trade talks is US food producers' objections to special protections for goods with registered geographical indications. These have been upheld in EU courts. For example, in 2008 the European Court of Justice ruled that only cheese made in certain Italian regions could be called Parmesan.
Maike Moellers, representing the US Dairy Export Council (USDEC), pushed back strongly on GIs in discussions at the forum. Moellers said her association was objecting to 5% of the EU's 1,200 listed protected GIs, including Feta, Parmesan, Gorgonzola, Rocquefort, Munster and Asiago cheeses. "We have no problem with compound GIs, when you link the generic term with a region, like Camembert de Normandy, for instance. But restricting the generic name itself is a problem," she insisted.
Moellers said the discussion on GIs should be removed from the TTIP agenda and negotiated separately - an approach that is being used for many of the thorniest trade issues in these talks.
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