TTIP – a nail in the coffin for EU food producers?
The NGO has conducted new research which forecasts that the EU-US trade deal could “spell disaster” for producers, with knock-on impacts for the European food industry.
“Any removal of EU restrictions will mean a huge increase in imports and could be the final nail in the coffin for some EU farming sectors,” said Friends of the Earth (FoE) food campaigner Mute Schimpf.
So far, fears have focused on food safety and environmental issues – such as the US’s more relaxed attitude towards pesticides and genetically modified foods. But FoE’s report – a compilation of dozens economic modelling studies – highlights how the controversial deal could impact on the EU’s €1.2 trillion food and drink industry.
Most at risk is perhaps the beef sector, but the majority of EU farmers are predicted to lose out. The US Department of Agriculture is predicting falls in the price paid to European farmers in every food category.
“Studies foresee a decline of up to 0.8% for EU agriculture’s contribution to GDP, while US agriculture’s contribution to GDP increases by 1.9%,” FoE concluded.
So, who will be hit hardest?
- At the moment, US imports are restricted due to the bloc’s ban on beef hormones and limited import quota for hormone-free beef. TTIP could see the limits raised, which would mean revenue falling by 30 to 40% for European producers.
- If the tariffs are removed completely, $3bn (€2.64bn)worth of US beef could flood the EU market, hitting farmers in the UK, Germany and France hard. Most at risk from the cheap imports will be the premium products, like beef raised on grass.
- Dairy trade is complex, but the bottom line is that there’s likely to be a “substantial” increase in dairy trade flows within TTIP. Rough figures suggest US and EU exports would increase by $5.4bn (€4.75bn) and $3.7bn (€3.25bn) respectively.
- But value is expected to decline, especially in Austria, Belgium, the Netherlands, Luxembourg and the UK.
- Cheese could be a winner, especially the products with a Geographical Indication.
- The European Commission’s focus on Geographical Indications – products that have a specific geographical origin and have reputations based on origin – is also in doubt.
- Around 6% of products have a GI, and the commission wants them protected in any deal. The US isn’t so keen. The benefits seem likely to be restricted to just three EU countries (France, the UK and Italy produce 86% of GI exports) and just a few products such as cheese, champagne and whisky.
- Unlikely to be as heavily impacted as other sectors, not least because other crops can be grown.
- The use of GM crops – a technology that Europe is yet to embrace to any great extent – remains a concern.
Schimpf added: “With many [farmers] already struggling to survive this could be the final knock-out blow. There is real concern that European farming is being sacrificed to get a TTIP deal at any costs,” he added.
Last year, FoodDrinkEurope – which believes there are opportunities in a TTIP for the food industry – said more needs to be done to explain what the TTIP negotiations will mean for imports and exports.
That won’t be easy. There is a deep mistrust of the deal amongst consumers and it’s only likely to intensify, according to research by Mintel. On the other hand, a flood of cheap products made to lower environmental, health and safety standards could fuel the market for European products deemed to be safer, greener and more natural, the analysts said.
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