Agriculture and TTIP – Interview with Katharina Reuter, Federal Association of Green Business

The US-American agricultural sector differs significantly from it’s European counterpart. The United States has a more industrial-sized agroindustry with a completely different cost-structure in areas like wheat-cultivation, beef, sugar and milk, whereas the European agricultural sector is mainly composed of smaller sized farms. To protect European farmers, the EU is regulating import of these goods by imposing high taxes. The planned free trade agreement TTIP aims to eliminate those taxes and thus lead to the destruction of many small-scale European farms.

What are differences between regulations considering food and agricultural sector in EU and US?

KR: The regulations in the EU are mostly based on the so called “precautionary principle” which says, that nothing should be allowed on the market, which has not proved its safety for customers, health and environment. In the US it is the other way round: Everything is allowed on the marked, until someone can prove, that it is doing harm (the so called “scientifically-based”). In the result the maximum permissible values or limits to pesticides and hormones are a lot higher in the US – see the table. Today the biggest part of American beef is banned for this reason (hormones) from the EU market, and so are genetically modified products.

Bild Agriculture

What are differences between EU and US agricultural markets (let’s say costumers and producers ‘habits’-attitude regarding GMO, pesticide usage, mass production vs. local and organic, etc.)?

KR: The average US-customer has had no problem with GMO, due to the traditional so called scientifically-based safety-approach. This is changing of course, the trend to safe food, organic products and regional food is strong in the US, too. In our view, we should not give up an European attitude, that is a role model for many customers in the US.

What impact might TTIP and CETA have on agriculture in EU and US? How will ratification of TTIP and CETA affect regulations and standards?

KR: It would lower European safety-standards and environmental standards. Example “Captan” (pesticide). So CETA and TTIP will bring more unfair competition to the European market. In the end, many small farms have to give up.

How could that affect trade?

KR: Currently EU is exporting around 15 billion Euros in US, and importing 8 billion. The export of the US will be higher. Look at the study of the USDA – all three scenarios show that the American farms will win. European farms will lose. For European food and farming sector it will mean, that some farmers might lose their basis of income. And also regional producers might be at risk, because of the “geographical indications (GI)”.

Which are most endangered agricultural sectors?

KR: Milk, crop farming, poultry, beef. The (leaked) study of the Hungarian Government showed, that sectors like wine, corn and parts of engineering could not be profitable with TTIP anymore. Every “geographic product” that is not mentioned in a TTIP  agreement is “lost”. If you discover an East-European product tomorrow, that would usually have the chance to become a “brand” like Parma-Ham or Nürnberger Würstchen – there would be no chance to protect it anymore.

What might happen to organic producers? Will they be able to match those who are using GMO/hormones/pesticides/etc.?

KR: Directly they are less affected, because there are Organic Standards. But of course, they would have to compete with even lower prices. And TTIP would make not make anything better: The organic farmers and traders told us, that they are not interested in going global. “Regional” is often part of the “organic” idea, it would not be very environmental to ship organic-goods like cheese, meat, vegetables and beer around the world.

Some organizations representing agricultural producers, like Copa-Cogeca, FoodDrinkEurope or German agricultural association DBV are supporting TTIP and CETA. What is your comment on that?

KR: Most of them have said “Yes” to TTIP in a very early stage because of their fundamental political orientation: They are in general for “free trade” – but at that stage they had no idea about the details in TTIP. And some associations where simply following the input, the big members gave them. We found out, that most of the smaller and medium companies and farmers have no idea what TTIP brings for them and they are extremely displeased with their associations/ representations. But now they are lifting their heads, they are warning their representatives of the possible disadvantages and so the associations are waking up. Not only in farming, we see the same thing happening in the engineering and electronic industry. The clearer the disadvantages of TTIP become, the more company-leaders wake up.