Agriculture Secretary: Geographic protection ‘not an easy issue’ in TTIP

Tom Vilsack [Sarantis Michalopoulos]

EXCLUSIVE / Tom Vilsack, the United States Secretary of Agriculture, said that Washington “respects” Europe’s claim for geographic protection of food in the transatlantic trade talks. But he said this should not prevent similar US products from being marketed under brands used on the American market.

Tom Vilsack has served as the United States Secretary of Agriculture since 2009 under US President Barack Obama’s administration. He spoke to Sarantis Michalopoulos.

The COP 21 negotiations have just started in Paris. Secretary of State John Kerry recently said that the UN climate change talks will not deliver a legally binding treaty. How can this ensure cutting carbon emissions globally?

President Obama set an aggressive target for the US and suggested that our emissions would be reduced by 26 to 28% within the next ten years based on 2005 levels. And he has used that directive as a way of discussing opportunities with China, India and other large emitters to get them to make similar types of commitments.

So I think there is a much greater awareness on the part of the global community, a greater awareness on the need for action, and among major emitters.

And I think you are seeing commitments made by countries like the US, China, India, they will eventually make a difference.

As far as agriculture is concerned, the US is prepared to double its rate of emission reduction over the next ten years. We have a specific plan based on what we refer to as ten building blocks, and we have specific mile posts on an annual basis that we want to reach to be able to get to that reduction level which will be the equivalent of 120 million metric tonnes of CO2 equivalents.

That will represent roughly 2% of emission reductions, which will go on the way towards the goal the president set.

So, you believe that political willingness will be high enough so that the ultimate deal doesn’t need to be legally binding?

Well, I think the political willingness is high, and I think the consequences of inaction are better understood today than perhaps at any other point in time.

I remember going to my first COP meeting, which was in Denmark a number of years ago, and I think there wasn’t a general awareness and appreciation for the consequences of inaction.

As we have seen, the polar ice caps are melting. In the US, we have seen historically high temperatures, and we are beginning to see longer droughts, (and) more intense storms.

In terms of global food security, what would you suggest the EU agriculture sector do in order to produce more with less? Are GMOs the solution?

In the US, we are proponents of GMOs as one of many ways to produce food. Certainly not the only way, certainly not the exclusive way, but one process that can be used.

We think there are benefits to GMOs in terms of increased productivity, reduced inputs, less reliance on chemicals and pesticides. Over time, there is potentially more nutrient density to the foods that are being produced.

So we think it is part of the solution, but it’s by no means the only answer. It has to be complemented with sustainable practices. It has to be complemented with trade agreements that will allow free flow of goods and services across borders.

It has to be complemented with continued research on more innovative practices in agriculture, it has to be coupled with the work of the US is engaged in helping developing countries be more productive using conventional methods.

So there is not just a single solution here. It’s part of a larger, more comprehensive approach.

You mentioned the trade agreements. Are you optimistic about the impact of TTIP on the agriculture sector? Will it give the sector a boost for both sides of the Atlantic?

If the agreement is structured properly it should. In order for it to be successful, it must.

Our experience with other trade agreements of a similar nature, the North American Free Trade Agreement (NAFTA), for example, suggest to me that in fact trade agreements can be beneficial to all parties. It doesn’t necessarily have to be a situation where I gain and you lose, or you gain and I lose. It’s a situation where we can expand agricultural exports on both sides of the ocean.

There is always going to be a significant market in the US for high value EU products. I think there are market opportunities obviously here in the EU for US products. And I think at the end of the day, the best system is one that provides a variety in choice and enough information for consumers to make an informed choice and then the market will decide and the market usually does a pretty good job of making those kinds of decisions.

Copa-Cogeca, the EU farmers association, recently complained that EU fruit and vegetable exports were being blocked by the “costly and burdensome bureaucratic system of the US”. A limited number of products are allowed to enter the US market after a pre-clearance procedure through the port of Philadelphia. Is the US ready to open more ports to EU products as part of the TTIP negotiations?

I’m not familiar with precisely the navigation routes for a product that enters the US, obviously we have a number of ports.

But I would say that the US has a system that we believe over the last several years has become more efficient. It’s a system that is important for us to maintain the consumer confidence and the safety of products that are consumed by Americans regardless of the source.

And we are continuing to work to make systems more efficient, that should always be the goal.

We have a rich protection when it comes to regulatory systems in terms of processing so we are engaged in a constant process improvement methods.

So I am not quite sure what this specific concern is, that has been expressed, but I can tell you that we are making strides to be more efficient, more effective and I know our ports are beginning to invest and making sure that they are capable of handling product.

I didn’t know Philadelphia was the only port. That surprises me.

What about the EU system of geographical indications? Europeans give special attention to this issue in the TTIP talks.

We respect the notion that brands, indications that result in higher market value, are something that obviously people want to protect.

They want to protect that high value added proposition. Our concern is that in doing so, it will make it difficult if not impossible for products that have been marketed under that same name for decades now, marketed under what we believe is a relatively generic term, will be prevented from entering the market.

So the challenge here is to figure out a way in which the value added proposition of products produced in specific areas in Europe can be protected without necessarily excluding the opportunity of US products of the same or similar nature being prevented from being marketed.

We think in the US the trademark system, which has been successfully used by a number of products in Europe that seek geographic indication protection, as a way to walk a fine line of protecting value, but not doing it at the expense of other producers who have been using the name in the product for quite some time.

We also think that the recently negotiated TTP agreement with our Trans-Pacific Partnership friends creates a dual process system that has not been available before this, in which people can question whether or not something is entitled to geographic indication protection. That’s an important element.

This is not an easy issue. It’s an issue that is going to require a lot of work, and some very creative thinking to be able to navigate this thicket where you want to protect value, but you don’t want to do it at the expense of products that have been marketed under that name for a considerable period of time.

What benefits will TTIP bring for EU countries?

I think trade, in general, is positive for countries in a trade agreement because it stabilises market opportunities. So if there is high demand domestically, you don’t have to export. If there is low demand domestically because your economy is suffering, people are finding harder to make consumer purchases then you have an additional market opportunity that is available to your producers to stabilise their prices so they don’t see high volatility, you know, big swings in income. Because that can create a lot of confusion and risk and discourage people from getting the business. So number one is stabilising markets and income.

Secondly, there are jobs connected to exports and imports. In both the importing and exporting countries, there are people that are hired to transport, process and package a product, so there are jobs connected to trade agreements.

In America, there are 11 million people employed as a result of trade. In agriculture, it’s about 1 million people, which is roughly equivalent to the number of farmers that are producing most of the product that is subject to export. So it’s a job creator.

Trade also has a tendency to promote innovation. Because when you have consumers having choice and variety, that obviously results in consumers not necessarily paying more than they have to for a product, because they have the ability to go to different places to purchase a product, there is going to be price competition.

And as a result in order to be competitive you have to look for innovations, for ways to be more efficient and productive with less. Trade has a tendency to spur innovation.

And then it’s between countries. Trade agreements strengthen relationships because it creates ongoing communication and conversation that develops personal relationships at every business level which makes it highly unlikely that you are going to get into a circumstance where you will have such a major disagreement with a country that you cut yourself off from a conversation. And obviously if you never cut yourself off from a conversation you are always going to able to work things out.

And so it helps strengthen relationships between countries.

Why did the US recently decide to put extra duties on EU butter and cream exports?

Just to be clear. This was not directed at the EU. It has obviously an impact on butter products from the EU, but it’s not targeted towards the EU.

The reason is very simple. We have seen a 150% increase in imports, so in other words we saw a flood of product coming in far beyond what we would normally and traditionally see at a time when producers in the US were also feeling some of the stress. I know producers here were feeling stress in part because of Russia’s actions.

So the WTO gives us the permission under those circumstances when there is a high increase in imports to impose for a limited period of time an additional cost on imported product.

That cost was assessed at a rate substantially below what the WTO would have authorised as a maximum amount and it is set to expire on 21 December of this year. So it provided some stability, equilibrium in our markets and it’s within the WTO regime.

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