Since the SPS Agreement went to effect in 1995, most of the trade disagreements between the U.S. and EU have been on SPS issues.  Grueff says there are “three key aspects of this area: one is their conflicting views of the ‘precautionary principle’; another is their differing positions regarding ‘other legitimate factors’; and a third is the extent to which both sides have at times allowed political considerations to interfere with science-based decision making.”  Ractopamine use in beef and pork production in the U.S. is the latest example of an SPS issue.

According to Grueff, the U.S. and the EU have different constituencies in trade talks.  U.S. agriculture is primarily interested in an agreement covering all of agriculture that addresses non-scientific SPS import barriers of today like ractopamine and long-standing issues like beef hormones and biotechnology.  They support the ‘SPS plus’ concept that would build on the current WTO agreement and provide greater transparency and more timely notifications.  A larger challenge would be to accept each other’s SPS measures as equivalent.

EU producers will approach the talks in a defensive mode.  They will look for a balanced agreement which does not impact any group too much and makes progress on geographical indications and more markets for cheese and maybe sugar.  Beef may be a major point of contention because it is an important source of income and employment in less well-off regions.   Agricultural interests are well represented in the European Parliament which will have to approve the agreement.

 

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NGOs (non-government organizations) in the EU will see the trade agreement as a way to promote social, environmental and sustainability objectives in agriculture.  Many farmers understand the benefits of biotechnology, but NGOs have the predominant voices on that issue.  The EU will start with a defensive position and resist changes in biotechnology regulations.  Grueff noted, “Private standards are being adopted by retailers as well as food companies to meet social, environmental, and sustainability objectives”, and WTO requirements are of little concern.

The last section on an effective negotiating process is of critical importance.  Grueff believes based on the failures of the Doha Round, “the highest political levels on both sides should have the clearest possible agreement on the specific objectives, and a firm commitment to achieving them.”  The process will require more than just negotiators meeting.  One idea is for regular reporting by lead negotiators from both sides to high level officials.  Another idea is to have SPS working groups with staff from counterpart U.S. and EU agencies.  A third is to have an Agricultural Trade Advisory Committee appointed to focus on the U.S.-EU negotiations.

Grueff concluded by noting this is the first chance in decades to change the agricultural dynamic between the two trading partners.  SPS and other non-tariff barriers are central to the negotiations and will include the concerns of the EU NGOs.  Innovative approaches to negotiations will be needed and high level political commitment on both sides is essential.

Ross Korves is an Economic Policy Analyst with Truth About Trade & Technology.

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