American farmers are used to getting their way where global trade is concerned. They’re used to seeing government trade negotiators bend over backwards to make sure they have unfettered access to foreign markets.
But now their winning streak may be approaching its end.
The United States is negotiating a free trade agreement, the Trans-Atlantic Trade and Investment Partnership (TTIP), with the EU, where there is substantial public opposition to U.S. demands concerning agricultural exports. U.S. Agriculture Secretary Tom Vilsack said on Dec. 1 that if these differences aren’t resolved, “then, in my view, you’re not going to have a TTIP agreement.”
It gets worse. U.S. agricultural exports in 2015 are down significantly. Owing to a global wheat glut and a strong dollar, U.S. wheat exports hit a 44-year low this year, according to the Wall Street Journal’s daily wrap-up of logistics and supply chain news. U.S. exports of corn, beef and pork are also way down, because buyers can get them more cheaply elsewhere.
As for the TTIP, there are several outstanding issues.
One is that Europeans don’t want food imported from the United States that’s been genetically modified.
To the extent that their opposition is based on health concerns, it should be pointed out that Americans have been eating GM foods every day for decades and no one has even so much as coughed as a consequence. But there are real, legitimate concerns about how GM farming affects the environment. France has banned it.
The Obama administration’s position is that if European farmers don’t want to grow GM crops, that’s their prerogative. But the EU shouldn’t try to ban imports of American-grown GM commodities, particularly livestock feed.
John Brook, the European regional director of the U.S. Meat Export Federation, said the EU was the world’s largest importer of GMO-treated livestock feed and that most Europeans didn’t know that.
Another issue for Europeans comprises what are known as Geographic Indicators. That means where things are from: champagne is from the Champagne region of France, Parmesan cheese is from Parma, Italy and so on. There are about 3,000 of these that the Europeans want to protect.
The EU holds that Geographic Indicators are important to the national and regional identities of its member states and that farmers in other countries shouldn’t be able to make sparkling wine and call it champagne. The EU has a list of about 3,000 geographically-designated foods that it wants to protect.
It reportedly includes Bologna, Swiss cheese, Parma ham and other foods of European origin that American producers have been making for generations.
David Salmonsen, a trade expert with the American Farm Bureau Federation, said that if European producers want to protect their brands from copycats, they should apply for trademarks. “They don’t need GIs,” he said.
A third issue is the widespread use of antibiotics, growth hormones and other chemicals that American farmers, ranchers and meatpackers use on their livestock. Beef treated with hormones and chlorine-washed chicken are banned in the EU and the Obama administration wants those bans overturned.
Not gonna happen, says EU Trade Commissioner Cecilia Malström. Protection of public health takes precedent over free trade.
Brook said these issues haven’t come up yet in the negotiations, and wouldn’t until the end. Trade negotiators usually save the most contentious issues for the last.
He said the United States only agreed to negotiate the TTIP if the discussions were to be “comprehensive and all-inclusive.” The EU agreed to that and now says that these so-called sanitary and phytosanitary issues are not open for discussion.
Trade negotiators often make unequivocal pronouncements like this, then agree to some compromise in the 11th hour. In the case of TTIP, the American agricultural community isn’t going to get everything it wants. The EU is too big and powerful to be cowed by the United States.
So, the question is, will Congress accept that? Or will it let the perfect be the enemy of the good?