Trade barriers | Regulation of biotechnology has reduced American soybean exports to the European Union
KISSIMMEE, Fla. — U.S. soybean growers see pending free trade negotiations with the European Union as a prime opportunity to resolve longstanding trade irritants.
U.S. president Barack Obama revealed in his Feb. 12 State of the Union speech that the United States is launching talks on a comprehensive Transatlantic Trade and Investment Partnership agreement with the EU.
The American Soybean Association says the 27 member states of the EU represent a promising market for American soybeans, but there are substantial obstacles that would first have to be overcome in a free trade agreement.
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“The first of these barriers is the non-transparent and non-science based process in the EU for approving new biotech traits and its laws requiring labelling of food products that contain biotech ingredients,” ASA chair Steve Wellman said in a news conference at the 2013 Commodity Classic conference.
The EU’s lengthy approval process has contributed to a 70 percent decline in U.S. soybean exports to the EU over the past five years.
Wellman said Europe has been slow to recognize the benefits of biotechnology, but there is hope when long-time critics such as British environmentalist Mark Lynas are changing their stance on genetically modified crops.
The EU’s Renewable Energy Directive (RED) is the other big trade irritant for the soybean industry. It has placed restrictions on the import of U.S. biodiesel and biodiesel feedstock, which is primarily soybeans.
The RED requires biofuel used in the EU to demonstrate a minimum 35 percent reduction in greenhouse gas emissions. Soybean biodiesel doesn’t make the cut.
The result is that European crushers that import soybeans to produce meal for the EU feed sector can’t do anything with the oil.
“At times, it gets loaded up on a ship and it gets shipped off to Africa or some other marketplace,” said Wellman. “All in the name of reducing greenhouse gas emissions.”
The ASA argues that the EU used outdated data when it assessed soybean biodiesel. It sent the EU an updated data package several years ago, but officials are just beginning to look at it.
The ASA also complains that the RED assessment is based on Brazilian data.
The greenhouse gases associated with transporting soybeans from a U.S. farm to a crusher in the EU are less than they are for an equivalent trip for Brazilian soybeans.
“As supportive as we are of a potential trade agreement with the EU, any such agreement that fails to address these critical issues is a non-starter,” said Wellman.
There is also concern that agriculture will be excluded from free trade negotiations with the EU because of the vast differences on issues such as the ones highlighted by the ASA. Wellman said that would be unacceptable.
U.S. agriculture secretary Tom Vilsack said he agrees and has made it clear to Obama and the U.S. trade representative.
“Agriculture has to be put on the table. It cannot be put to the side and not discussed and not resolved because there are serious differences of opinion between where we are and where the EU is,” Vilsack said during a news conference at the Classic.
He said the EU is the U.S.’s fifth or sixth largest agricultural trading partner and could rise up the ranks if it “took a more informed view” on issues such as biotechnology.
“They’re slowly coming to the realization that we’ve got a heck of a challenge as a humankind to feed this ever increasing world population and we better start embracing the science,” he said.
Vilsack agreed with Wellman that the EU’s concerns over soybean biodiesel are misguided.
“A lot of the concerns are old news. They are things that were brought up years ago that aren’t true today because the industry has evolved and efficiencies have been developed.”
One thing that should ease the agricultural portion of the negotiations is the possibility of less government support for U.S. farmers in the next five-year farm bill.
“In that sense we’ll be in a better, stronger bargaining position,” said Vilsack.
