Members of the US feed and animal production industries, including the American Feed Industry Association (AFIA), the National Grain and Feed Association (NGFA) and North American Export Grain Association (NAEGA) said last week that the US should continue to include agriculture in the stated trade objectives for upcoming talks with the EU.
US President Donald Trump informed Congress in October that he planned to negotiate a trade deal between the two entities. As part of the planning for those negotiations, public comments were collected.
The AFIA said that it was pleased to see the Trump administration include agriculture in its stated negotiation objectives with the EU. The organization also asked for the administration to avoid having objectives addressed in stages, and instead to peruse a single negotiation.
The EU is the fourth largest export market for feed, said Joel Newman, AFIA president and CEO. It accounted for more than $444m in exports in 2017, however, animal feed producers face several barriers to trade.
“AFIA is encouraged by the administration’s objective to negotiate a trade agreement with the European Union,” the organization said in a letter sent to the Office of the US Trade Representatives (USTR) and provided to us. “A successful bilateral trade agreement is only possible if all sectors are included, including agriculture.”
However, some uncertainty about the nature of the upcoming discussions remains, as a draft of negotiation mandates released by the European Commission for the talks did not include agricultural topics.
Instead, the negotiation directives focus on two potential areas for agreements – removing tariffs on industrial goods – except for agricultural products – and a conformity assessment to help curb non-tariff barriers, said the commission.
Since the EU-US Executive Working group was created in July, leaders from both sides have met four times, the commission said. The EU also has expanded its imports of soybeans 112% during the July to December period compared to that same time the previous year.
TTIP and past trade talks
The US also discussed trade with the EU during the Obama administration and developed the Transatlantic Trade and Investment Partnership (TTIP). However, agriculture was a challenging topic during those negotiations and the deal was not concluded by the end of his presidency.
President Trump started working on new trade talks last year. In July, European Commission head, Jean-Claude Juncker and Trump announced a ‘new phase’ in EU-US relations.
“We agreed today, first of all, to work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods. We will also work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products as well as soybeans,” they said at the time.
They also said they would work to resolve steel and aluminum levy issues and retaliatory tariffs.
EU feed industry representatives, FEFAC, welcomed the talk of improving trading relationships and boosting soybean purchases from the US.
The trade in goods and services between the US and EU amounted to about $1.2 trillion in 2017, with exports reaching $527bn, according to the USTR office.
The AFIA asked for the administration to push for a trade agreement that includes “risk-based regulations” and ends tariff and non-tariff barriers for trade, as they are hindering US animal feed manufacturers efforts to engage “fairly and openly” in the European market.
“We strongly support the Trump administration’s efforts to strengthen the United States’ trading relationship with the EU, address barriers keeping US agricultural products from competing fairly in this important market, and urge that this work is done in a single undertaking,” said Newman. “We look forward to working with USTR as the process moves forward.”
The feed industry’s primary concern is its “regulatory regime,” the AFIA said. One example included EU regulations published in 2002 addressing animal co-products.
“Examples of other barriers include, but are not limited to, slow biotech approvals, bans on specific feed ingredients without scientific basis and arduous product specification requirements not linked to the health and safety of animals or humans," the AFIA said. "These restrictions are not based on science and not in compliance with or in the spirit of the WTO Sanitary and Phytosanitary (SPS) Chapter.”
A trade agreement that included the use of risk-based regulation and that curtailed tariff and non-tariff barriers would allow for more equal interactions and permit the US to regain lost feed and feed ingredient market share, while potentially introducing new feed ingredients, the association said.
The National Pork Producers Council (NPPC) also weighed in on the potential trade discussions, saying that it was opposed to cutting agriculture from the agreement. The council was part of a larger group that sent a letter in December to the office of the USTR stressing that a “comprehensive agreement” is needed.
The council was pleased that the current administration continues to insist that that agriculture be part of the trade agreement discussion, said Jim Heimerl, NPPC president.
“We are infuriated,” he added, in a release regarding the difference in proposed discussion topics from the US and EU. “The EU is one of the most protected markets in the world for a lot of agricultural products, including pork.”
If a trade agreement is to be supported by Congress, it will need to include agriculture, he said.
In addition to ongoing requests for proposed trade talks with the EU to include agriculture, work on the US-Mexico-Canada Agreement (USMCA), previously the North America Free Trade Agreement (NAFTA) is drawing attention from the feed and agricultural community.
Several producer organizations including the NPPC, National Corn Growers Association, National Council of Farmer Cooperatives, North American Meat Institute and the US Grains Council sent an open letter Wednesday [January 23] to the US Department of Commerce and the Office of the USTR.
The coalition acknowledged the importance of trade among all three countries and asked for tariffs on steel and aluminum imports to be lifted and called for the end to retaliatory tariffs from trading partners.
“For many farmers, ranchers and manufacturers, the damage from the reciprocal trade actions in the steel dispute far outweighs any benefit that may accrue to them from the USMCA,” the producers said. “Producers of agricultural and manufactured products that are highly dependent on the Canadian and Mexican markets are also suffering serious financial losses.”
Following the restart of 'zero-tariff North American trade', the group said its members would be able to help seek congressional approval for the USMCA.