The study conducted by the European Commission's Joint Research Centre (JRC) on the cumulative impact for the agri-food sector of 12 future trade agreements (FTAs) concluded or negotiated by the EU with third countries – the results of which were unveiled on Tuesday 15 November – highlights vulnerabilities for the beef and rice sectors, particularly due to the rise in imports from the Mercosur bloc and to a lesser extent from Australia.
The importance of the effects of the 12 FTAs concerned – those already concluded with Canada (CETA) and Vietnam, those currently being negotiated with the USA, Mercosur (Argentina, Brazil, Paraguay and Uruguay), Japan, Indonesia, the Philippines and Thailand, those that will be negotiated with Australia and New Zealand, and those that will be updated with Mexico and Turkey – on different products varies according to the type of scenario taken into account (the more ambitious scenario involving the full liberalisation of 98.5% of all products and the partial tariff cut of 50% for the remaining products; or the more conservative scenario involving full liberalisation of 97% of products, and a 25% tariff cut for the others).
The study highlights significant gains for the European dairy and pork sectors – two sectors which have struggled in recent years but which are now showing signs of recovery. However, the study shows vulnerabilities for beef and rice, both in terms of trade effects and a decline in producer prices due to the pressure of competition.
The European Commission states that the results of the impact study confirm that the approach currently favoured by the Commission is the right one. This approach aims at systematically protecting sensitive sectors in all trade negotiations by limiting the liberalisation of imports of these products by means of tariff rate quotas (TRQs).
It states that as part of CETA, the EU will eliminate 92.2% of its agricultural tariffs at entry into force of the deal (reaching 93.8% after seven years). The TRQ agreed for beef in CETA amounts to 45,838 tonnes, to be phased in over 5 years and corresponding to about 0.6% of total EU consumption.
As part of the FTA with Vietnam, the EU will only partially liberalise imports of rice since the TRQs represent nearly 8% of total EU imports. Two thirds will be earmarked for rice not produced within the EU or to be further processed by the EU rice industry.
The Commission nevertheless recognises there are limits to its analysis, which is not complete. It was not possible to quantify in detail the potential gains for important products with significant export potential – like fruit and vegetables, wine, olive oil and processed foods in general (accounting for 70% of EU agri-food export value) – nor the gains of improved protection for Geographical Indications.
What is more, the study focuses solely on the effects produced by reciprocal liberalisation of import tariffs between the EU and the relevant trade partners, and does not take into account other provisions with an economic impact (such as the reduction of non-tariff measures, in particular sanitary and phytosanitary measures). Similarly, the study does not take into consideration the impact of measures used by the EU to protect vulnerable sectors in trade deals, such as the systematic use of limited TRQs.
"This study responds to those concerns and, based on the assumptions made, shows that the effect of international trade agreements on agriculture and the European agri-food sector is broadly positive", European Commissioner for Agriculture Phil Hogan commented.
When questioned by the press at a presentation of the impact study on Tuesday, Hogan who was alongside Commission Vice-President Jyrki Katainen responsible for jobs, growth, investment and competitiveness, said that on the basis of this report, the Mercosur countries "were going to have to change their position" as regards beef – the main offensive interest of the Latin American bloc – and ethanol, which the Commission nevertheless excluded from its initial offer at the exchange of market access offers between the two blocs on 11 May (see EUROPE 11549). (Original version in French by Emmanuel Hagry)