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Impact of EU standards on competition and world trade

10 June 2011

The report of the UK Parliament Environment, Food and Rural Affairs Committee on the CAP after 2013, published in April 2011, summarised evidence from different stakeholders on the impact of EU agricultural product standards on competition between EU and third-country producers. It noted farmers’ concerns that the failure of third-country suppliers to fully comply with EU standards gave imported products an unfair advantage on EU markets. However it also noted the rejection of these claims by the British Retail Consortium, which argued that its members’ imports from non-EU countries met equivalent standards to those required by the EU.

Evidence presented to the parliamentary committee suggests, however, that the situation varies considerably from sector to sector. For example, ‘according to the British Pig Executive, in 2005 an estimated 70% of pork imports would have been illegal to produce in the UK on the grounds of pig welfare’.

Overall EU farmers are arguing that ‘achieving recognition of production standards, such as animal welfare, carbon footprint or water usage, was a key part of moving towards fairer trade and a more sustainable food chain.’

While the Committee felt that standards should not be allowed to become protectionism in a another form, it did recommend that ‘the EU should argue more strongly for recognition of standards of production (for example animal welfare, use of water, greenhouse gas emissions) within trade agreements’ and that labelling which better informs consumers of production processes would offer a better solution to discrepancies in respect for some standards than the introduction of new trade barriers. The Committee’s conclusions on the future of the CAP and the impact of moves towards agricultural trade liberalisation are discussed in a companion Agritrade article, ‘ UK parliamentary hearing on the CAP after 2013’, June 2011.

Policy developments continue around a wide range of standards and related issues. On 21 February, EU agriculture ministers agreed to support mandatory labelling of pork, lamb and poultry, with farmers’ organisations lobbying for country-of-origin labelling to be made mandatory for all processed food products as well (e.g. so that a sandwich labelled ‘British chicken sandwich’ does not include any imported chicken meat). Such ‘honest’ labelling, it was argued, would help consumers who want to buy local home-grown and home-reared products. European food industry association CIAA has described farmers’ demands as ‘highly impractical and costly’, since it would require companies to constantly change labels as their sources of supply changed throughout the year.

The European Parliament is now debating this issue, given the failure to reach agreement in the EU Council. The debate is controversial, with some MEPs supporting farmer demands, while others describe it as ‘nothing short of protectionism’ which ‘puts the single market in jeopardy’. A vote in the EP is scheduled for July 2011.

Given the key importance of animal welfare, the EU began work at the end of 2010 on a 5-year strategy for animal welfare to cover the period 2011 to 2015. According to USDA analysis, a key part of this strategy is to ‘enhance animal welfare standards internationally, so as to level the playing field for European producers’. An extensive consultation process has already been started.

Editorial comment

The extent to which EU standards apply to third-country suppliers varies considerably from sector to sector. In some sectors (e.g. horticultural sector), private voluntary standards exceed official EU standards (see Agritrade article, ‘ New pesticide regulations raise concerns for future of smallholders’, June 2011), while in other sectors, such as animal welfare standards, only certain aspects apply (e.g. respect for EU animal welfare rules at times of slaughtering, but not rules related to transportation and production processes). In the livestock sector, on issues such as animal welfare, the EC has favoured a voluntary dialogue approach. The incorporation of a move to formal requirements into trade agreements would represent a change in approach. The EC’s current inclination is to use clear labelling rules to allow ‘the market’ to decide on which products consumers should have access to, and at what prices. However with pressure from farmers’ organisations building up, against a background of major concerns over the impact of any EU FTA with the Mercosur group of countries, the adoption of more formal requirements incorporated into trade agreements cannot be ruled out.

Whichever direction these policy discussions take, in places where EU standards do not yet fully apply to third-country suppliers, ACP exporters may well need to closely follow the evolving discussions and intervene in the debates as necessary, to ensure that EU standards do not become ‘protectionism in another form’.


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