According to reports from the European Commission, on 11 June 2012 the EC agriculture commissioner and China’s minister of agriculture signed a cooperation plan on agriculture and rural development, signalling an intention to intensify cooperation and trade in the sphere of agriculture. Priority sectors potentially included: ‘food security, international cooperation, environmental-friendly agriculture, organic farming and food safety’.
This broad agreement was followed by a further agreement to ‘open negotiations on a mutual recognition agreement in the field of organic food products’. This sets out a specific ‘roadmap’ for stages of dialogue aimed at leading to mutual recognition of legislation, standards and procedures. An EC press release reporting these developments noted that ‘EU exports of organic products to China increased significantly in 2011, with promising perspectives in the years to come.’ Similarly, the EU has for many years ‘been a main importer of organic products coming from China’, with these exports developing rapidly.
The EU is currently the third largest export market for Chinese agricultural products, while the EU is the fifth largest source of Chinese food and agricultural imports.
Given the growing two-way trade of organic products between the EU and China, the negotiation of a mutual recognition agreement on organic standards is a natural priority for increased cooperation. However, given the scale and potential range of future Chinese production of organic products, any administrative cooperation which facilitates and reduces the costs of access for Chinese organic exports to the EU market potentially increases competition for ACP suppliers of organic products, if similar mutual recognition agreements are not in place.
These developments reinforce the view that organic markets may not offer a sustainable long-term option for ACP export product differentiation since, with growing volumes of supply, price differentials over non-organic products are likely to decline, while the costs of compliance and certification will remain.
Any large-scale moves by ACP producers into organic production for export to the EU would need to be subject to careful market assessments, in the light of the growing level of competition in this market component. It would also require steps to be taken to reduce wherever possible the costs of access to EU organic markets.