Free trade vital to counter slowdown, says food industry

By Anthony Fletcher

- Last updated on GMT

Related tags Eu Ciaa European union International trade

The CIAA has urged the new EU presidency to push ahead with the
liberalisation of the global food trade in order to open new
markets and tackle the slowdown in productivity growth.

Austria takes over the presidency of the EU at a time of continued flux. Recent agreements have just been concluded regarding both the next EU budget and the recent Hong Kong WTO negotiations.

According to CIAA (Confederation of Food and Drink Industries of the EU) president Jean Martin, the new presidency must build on the achievements of these agreements in order to address the most pressing and urgent trade concerns of the industry.

"The EU food and drink sector is an important pillar of the European economy,"​ said Martin, outlining the group's agenda for lobbying the European Commission and politicians this year.

"For Europe to remain an attractive location for continued industry investments, including in research and development (R&D), some worrying facts, such as the slowing down of productivity growth and low value added growth, need to be tackled through appropriate and coordinated action in a number of areas."

Trade and competitiveness

The CIAA says that it is committed to the multilateral process, and welcomes the efforts that have been made at the WTO Hong Kong Ministerial Conference to move the rules-based trading system forward. However, it says that much work remains to be done to promote improved market access and define clearer and fairer agricultural trade rules.

"Maintaining the competitiveness of the EU food and drink industries is a fundamental objective which depends on a balanced approach consistent between market access, domestic support and export competition,"​ said Martin.

The CIAA believes that strong guiding principles are needed to ensure that a coordinated approach is taken towards market access, domestic support and export competition. A coherent approach is also required when it comes to agricultural products and processed goods to ensure they are treated on an equal footing.

EU - Mercosur relations

The CIAA is in favour of strengthening economic relationsbetween the EU and the Mercosur countries in South America. It believes that Mercosur is an attractive market, though the trade balance for agri-food products remains largely unfavourable to the EU.

"The development dimension of the Doha Round cannot justfocus on developed countries providing special anddifferential treatment to all developing countries,"​ said the organisation.

"CIAA recognises the need for specific arrangements, but has serious concerns about the high level of flexibility offered to developing countries independently of the strength of their agricultural sector, as provided for in the Hong KongMinisterial Declaration."

The organisation therefore strongly supports future negotiations on trade facilitation, which have the potential to considerablyimprove trade and reduce costs.

EU - EUROMED negotiations

The CIAA saw the resumption of trade negotiations between the EU and Mediterranean countries in November as vital for the expansion of lucrative new markets. As a result, the food industry body roundly welcomed the EU Council's decision to open trade negotiations with its Mediterranean partners.

The Mediterranean countries are already an important export destination for European food and drink products with a positive €1.1 billion trade balance largely favourable to the EU. With more than 600 million consumers in 2010, the Euro-Mediterranean Free Trade Area (EMFTA) is an attractive and expanding market.

The CIAA is therefore strongly in favour of reciprocal liberalisation of trade within the region.

EU - Russia relations

With the accession of 10 new Member States to the European Union on 1st May 2004, trade relations with Russia in food and drink products have given rise to a number of serious concerns.

Firstly, there was the request for all exporting companies in the new Member States to go through a costly and uncertain certification procedure. Then the implementation of an EU-Russia veterinary agreement on 1 January 2005gave rise to considerable problems that have since been addressed and at least partially resolved on a provisional basis.

The CIAA considers that a high level of political attention must continue to be paid to these important issues that are critical to the European food industry's ability to compete on the Russian market. Pressure must therefore continue to be applied to speed up the inspection and certification of companies, within aclear and transparent framework.

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