NGFA and NAEGA Make Recommendations For Trade Deal Between U.S. and EU

This article has been reprinted from the NGFA Newsletter.

By Sarah Gonzalez, Director of Communications and Digital Media

The NGFA and North American Export Grain Association (NAEGA) made several recommendations in a Dec. 10 statement regarding the Trump administration’s intention to enter into negotiations with the European Union (EU) on a U.S.-EU Trade Agreement.

NGFA and NAEGA called on the administration to include food and agriculture as a principal tenet in any trade agreement with the EU, including low or no tariffs and obtaining greater market access and integration for agricultural and other products.

“…[T]he United States should not accept agriculture, forestry and fisheries outcomes from the EU that maintain an unbalanced and unfair playing field,” NGFA and NAEGA said.

The upcoming negotiation also is viewed as “a critical battleground for addressing agricultural non-tariff market access issues,” NGFA and NAEGA said, because the EU traditionally has pursued regulatory measures that conflict with both U.S. interests and World Trade Organization (WTO) rules.

The Trump administration, which NGFA and NAEGA said “recognizes the inappropriate EU barriers for U.S. food and agriculture,” has plans to engage in trade negotiations with the EU starting early in 2019.

NAEGA and NGFA said they believe that for significant market access gains to be made, U.S. negotiators “must demand the resolution of several non-tariff trade barriers” that are the result of the EU’s protectionist use of the precautionary principle.

“These constraints to U.S. exports and steadily increasing EU imports have led to the largest U.S. agricultural trade deficit with any trading partner,” NGFA and NAEGA stated.

“With the resolution of these trade barriers, many NGFA- and NAEGA-member companies would be positioned to ship larger quantities of agricultural products to the EU and help reduce our negative trade balance.”

NGFA and NAEGA said the trade dynamic with the EU “contrasts sharply with the experiences of other major U.S. agricultural trading partners that remain balanced, as in the case of Canada, or shifted to surplus, as has occurred with China, Japan and Mexico.”

The statement notes that the U.S.-Mexico-Canada Agreement (USMCA) contains useful provisions to address non-tariff barriers and should serve as a model for incorporation into a U.S.-EU Agreement.

Applicable USMCA provisions include:

• Inclusion of steps to reduce the likelihood of trade disruptions involving products of agricultural biotechnology and other seed-breeding innovations;

• Establishment of a rapid response mechanism (RRM) to facilitate trade during adverse import checks;

• Enhanced technical consultations for sanitary and phytosanitary disputes;

• Regulatory coherence; and

• Promoting science-based standards, risk management and risk assessments.

When it comes to agricultural biotechnology, NGFA and NAEGA emphasized that the Trump administration should work with EU authorities to address diverging regulation of new plant breeding innovations, including genome editing, which, in the absence of a common regulatory approach, risks causing “disruptions to global grain flows once these products are commercialized.”

Regarding sustainability standards, NGFA and NAEGA said a future U.S.-EU trade agreement should determine that U.S. soybeans and other commodities imported to the EU for biofuels and biofuel feedstock do not require additional sustainability certification by the EU.

The Trump administration is seeking bilateral deals with multiple major trading partners, including the United Kingdom once Brexit is complete.

NGFA and NAEGA submitted similar statements to the administration regarding a potential U.S. trade agreement with Japan and further trade cooperation with Canada.

Meanwhile, the European Parliament ratified a trade deal between the EU and Japan on Dec. 12, paving the way for the largest ever trade agreement negotiated by the European Union to take effect Feb. 1.