Trade agreements 'beneficial for EU agri-food sector'

Legislation | | MIC Customs Solutions |

An independent study carried out on behalf of the European Commission has demonstrated the considerable benefits that trade agreements have delivered for the agri-food sector.

In an increasingly protectionist political climate, the European Union continues to remain one of the staunchest defenders of the principle of free trade, and a key force in pushing forward an agenda of increased liberalization and unification of trading standards on a global basis.

Recently, the European Commission published the findings of an independent study that underlined its ongoing commitment to free trade by highlighting the considerable benefits the EU agri-food sector has experienced as a consequence of recent trade deals.

The figures offer a strong case for the continued pursuit of the free trade ideal as a means of driving sales and exports, as well as pointing the way forward for other similar agreements.

Key figures

The study looked at the impact of recent trade agreements with three countries - Mexico, South Korea and Switzerland - revealing that each deal contributed to increased trade in both directions, with increased EU exports and imports of products from all three countries.

For example, the EU-Mexico deal was shown to have added €105 million to EU agri-food exports in 2013 - primarily processed food and beverages - three years after both sides had removed all trade barriers stipulated in the agreement. Additional imports of €316 million in the same year were mostly primary products.

Meanwhile, the EU-South Korea Free Trade Agreement, which is yet to be fully implemented, has already been able to add €439 million to EU agri-food exports in 2015, with additional imports of €116 million in the same year. Finally, the EU-Switzerland trade agreements on agricultural products and processed agricultural products together added €532 million to EU agri-food exports in 2010, three years after full implementation, with additional imports of €1.17 million.

Phil Hogan, European commissioner for agriculture and rural development, said: "These three agreements alone have increased EU agri-food exports by more than €1 billion and have raised value-added in the agri-food sector by €600 million.

"Just as importantly, this increase in exports has supported thousands of jobs in total across the EU, most of which in the agri-food sector, including in primary agriculture. These figures are clear evidence that ambitious and balanced trade deals work for European food and farming."

Lessons to be learned

The study also indicated a number of ways in which the benefits that have already been unlocked can be amplified further with additional work.

For example, it was indicated that more recent and ambitious agreements such as the EU-Korea trade deal, which entered into force in 2011, have delivered a greater impact than older and less comprehensive agreements like the 2000 deal between the EU and Mexico, showing that the quality and effectiveness of EU trade agreements in terms of removing barriers and improving competitiveness is increasing. Key to this is closely following trade negotiations involving the EU's main competitors, ensuring Europe does not fall behind in access conditions to important markets.

It also emphasized the importance of promotion and information campaigns to help EU exporters access new markets and grow their businesses in existing markets, an insight that prompted the European Commission to recently increase its promotion budget significantly.

Additionally, the report offered assurances that increased imports have not negatively impacted domestic EU production, with the upward import trend largely reflecting the replacement of imports from other third countries, or an increase in EU consumption.

Moving forward

With European agri-food exports reaching a new record high in 2016, the EU is keen to maintain the positive momentum, with Mr Hogan having recently carried out high-level visits to Colombia, Mexico, China, Japan, Vietnam and Indonesia to promote EU agri-food products and help European companies find new business opportunities there.

A further visit will be held in Canada in May, following the signing of a major new free trade agreement between Canada and the EU earlier this year. EU trade commissioner Cecilia Malmstrom already visited Canada earlier this month, with further trips to Singapore and Mexico planned for later in the spring.

In the case of Singapore, this will be to reinforce a relationship strengthened by the signing of a trade deal in 2014, while the talks with Mexico will focus on updating the existing EU agreement from 2000, as it is believed that there is scope to reduce tariffs and barriers further.

Ms Malmstrom said: "Trade deals, done right, are a force for good for our farmers and food producers."