A rising middle class in emerging markets, focused on food quality, bodes well for EU agri-exports, said Marc Vanheukelen, the European Union’s ambassador to the World Trade Organization (WTO). EurActiv.com reports from Athens.
Speaking at the Congress of European Farmers in Greece (6 October), Vanheukelen explained EU efforts for an export-driven Common Agricultural Policy (CAP).
The Russian embargo has put enormous pressure on already struggling European Union agricultural markets. Trade between Russia and the EU dropped by over €163.4 billion between 2013 and last year, and Union farmers and agricultural cooperatives lost their main export market overnight worth €5.5 billion.
Severely hit by the Russian ban, the European Commission has tried to reach new export outlets in the medium term. According to data, in 2015 the EU was the world’s biggest exporter of agri-food products with sales reaching more than €129 billion. Agricultural trade balance reached €16 billion while EU exports increased by 6% compared to 2014.
The Russian government decided on Wednesday (29 June) to prolong a ban on EU food imports from August, until the end of 2017, in retaliation for EU sanctions over Ukraine.
Changing eating habits
The EU diplomat emphasised that long-term prospects were favourable to developments in which international trade, especially exports, will play an increasingly important role on the market of agricultural products.
He noted that whereas European demand for food would probably be stable in the coming years, the demand of emerging markets in Asia, Africa and Latin America is growing “due to the increase of the population and in particular of the middle class, whose eating habits are changing”.
“Consumers have increasing expectations regarding the quality, safety and nutritional value of the products they eat […] Europe is well placed to meet this demand,” Vanheukelen stated.
According to the diplomat, China, the US and Switzerland, but also new markets such as Australia, Saudi Arabia, the United Arab Emirates and Vietnam registered very positive developments for EU agri products.
“Boosting exports to China has been key for the recent recovery of the EU pigmeat market,” he said.
Chairman of Copa-Cogeca’s milk working party Mansel Raymond confirmed China’s interest in EU diary products. “Milk production across the EU has been tightening since July and demand for our dairy products is picking up, especially in China by as much as 20-30% since January, and also in the US, Japan and the Middle-East, particularly for our cheese,” he said.
Agriculture Commissioner Phil Hogan has launched a “diplomatic campaign” to find new markets for EU products. But external trade complexity and an unbalanced internal market pose serious challenges for the executive.
He also noted that China lifted the restrictions related to the Schmallenberg virus on exports of bovine/ovine genetic material from four EU member states (Germany, France, UK, Denmark) while Japan lifted its ban on imports of Danish and Italian beef.
TTIP: Focus on geographical indication
For the EU representative in the WTO, the EU’s active policy of striking trade agreements had a positive impact on exports over the last six years.
Referring to the negotiations with the US on the Transatlantic Trade and Investment Partnership (TTIP), Raymond said that it had a geopolitical importance, which goes beyond the strategy for growth and jobs.
“TTIP should be ambitious, but also balanced and reasonable,” he noted, adding that substance is more important than speed and the Commission would not accept a “hasty” deal.
He stressed that it should not be limited to a discussion on tariff liberalisation but also to the removal of a series of technical barriers in agriculture in the US market and better protection of European geographical indications and quality of products, which are highly valued by consumers in the US.
“However, we will not compromise on our production standards, health and environment,” he said.
Minister for Agriculture and Rural Development of Slovakia Gabriela Matečná shares a similar view.
She stressed that it was very important to strike balance so that agriculture is not adversely affected by the trade deals.
“This way, the markets will present an opportunity to sell our surplus production and the same time, we have to make sure that our producers from the third countries importing into the EU are adhering at the same standards as our farmers in Europe,” she told EurActiv.
Martin Merrild, the President of the European farmers association (COPA), told EurActiv:
“The Russian embargo showed us how dangerous it is for individual farmers when trade is mixed with politics. What happened with the Russian ban was that politicians made decisions that forced Russia to decide the ban. It was a political decision from both the EU and Russia and the Russian market was closed.”
“Who paid for it? The farmers. Trade deals should be isolated from daily politics,” he added.
- November 2016: Agriculture Commissioner Phil Hogan to visit Vietnam and Indonesia.