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Our Views

Our Views Columns

Date: 3/21/2013

Title: U.S. and the EU to Engage in Trade Talks

By Bob McCan, NCBA President Elect

Over the last few years there has been success in developing Free Trade Agreements (FTA) with South Korea, Colombia and Panama. These agreements offer great potential to increase market share in key markets for U.S. beef in Asia and South America. In fact, according to the International Trade Commission, the three agreements translate into 250,000 jobs, a boost to our nation’s economy.

For cattlemen, the trade agreements increase beef demand and profitability. These agreements give U.S. beef a foothold in growing markets in two continents, Asia and South America. Now that the FTAs have been implemented in these three countries, the U.S. will ultimately have free trade for U.S. beef with approximately two-thirds of the population in the Western Hemisphere. That is a positive step forward for U.S. cattlemen and women.

Because cattle producers support expanding export opportunities for U.S. beef, NCBA was pleased to learn this week that formal notice was given by the White House to Congress announcing intentions to enter into negotiations on a European Union (EU) free trade agreement. NCBA welcomes this announcement; however, there is a long history of trade issues between the United States and the EU when it comes to beef. A comprehensive trade agreement presents us with a great opportunity to tear down tariff and non-tariff trade barriers that have hindered our relationship and build a stronger trade relationship based on market-driven and science-based principles. Our country has a longstanding history of providing the EU with high quality, wholesome, safe U.S. beef, and we look forward to improving our relationship so that we can provide more U.S. beef to European consumers at a competitive price. Unfortunately, U.S. beef has been the victim of unwarranted trade restrictions throughout the years, and it would be greatly beneficial for the U.S. beef industry to enter into a twenty-first century agreement with the EU based on internationally-recognized scientific standards, free from tariffs, quotas and subsidies, where the free market allows competition to flourish.

It is without question that European consumers are some of the most sophisticated consumers in the world. They care deeply about the origin of their food, the method and materials that are used to produce their food, and the social aspects of how their food impacts society. They go to great lengths to make sure their domestic standards incorporate a holistic approach that includes these and other factors. In order to meet these demands, European beef producers are heavily subsidized. On the other hand, American consumers have a variety of choices, produced domestically, that satisfy their priorities of flavor, price and quality. The U.S. beef industry goes to great lengths to provide a safe and affordable product for consumers. The U.S. beef industry has adapted to meet demands of consumers who put a higher priority on origin, production methods, and environmental factors; but unlike the EU, in the United States these factors are not the result of government subsidies or regulations. NCBA supports a future trade agreement which allows the market, not government subsidies, to determine the price for these added costs of production.

Another important aspect of an FTA between the United States and the EU is recognizing sound science-based principles. Even though U.S. beef sales to the EU have experienced tremendous growth in recent years, a growing niche market does not justify the continued application of non-science based standards on U.S. beef. The E.U. frequently employs a standard referred to as the precautionary principle. The precautionary principle establishes that where the possibility of a harmful effect exists, but where scientific uncertainty regarding the risk persists, provisional risk management strategies may be adopted that ensure the high level of health protection.

Now, NCBA’s concern is not with the precautionary principle itself, but with the repeated use of this principle to undermine advances in science and improved industry practices, specifically the progress of Codex, an established international scientific body that makes scientific recommendations on the judicious use of many substances. Caution is not a bad thing if used correctly, but caution should not be an accepted excuse for ignoring internationally-recognized science based standards. In order for our relationship to succeed the EU must stop undermining progress of international scientific bodies including Codex.

It is in the best interest of beef producers and consumers in the United States and the EU to continue negotiating a successful free trade agreement; one which will allow the free market to thrive without government intrusion and arbitrary rules, successfully breaks down trade barriers such as tariffs and quotas and has both parties recognizing and following international science-based standards.