As negotiators prepare for the 12th round of TTIP talks on Monday (22 February), the crisis in French agriculture is compounding the sector’s fears over the trade deal. EURACTIV France reports.
“We have highly sensitive industries in France, like agriculture and steel,” said Charles-Henri Weymuller, who heads the Trade Policy Unit at the French Treasury.
For the economist, the Transatlantic Trade and Investment Partnership (TTIP) currently being negotiated between the EU and the United States will have a significant impact on the French economy.
Exactly what kind of an impact remains to be seen.
At a debate hosted by EURACTIV in Paris on Wednesday (17 February), the discussion over the potential benefits of TTIP for France quickly gave way to an animated discussion about the fears of the agricultural sector. The workshop debate was supported by the Amercian Chamber of Commerce to the EU (AmCham EU).
“In France, the agricultural sectors are really struggling. Discussing a trade agreement in this climate is difficult,” said Yves Morvan, from the French farming cooperative InVivo.
What’s your beef?
But not all sectors will be affected in the same way, and some could even benefit, said Senator Philippe Bonnecarrère, from the centrist UDI party.
“It is likely that the effect of the transatlantic treaty on cereal producers will be fairly neutral, and that it will even be positive for exporters of dairy products,” Bonnecarrère said.
Beef farmers, for their part, are among the most vocal opponents of TTIP. Already in great financial difficulty, they fear increased imports of American meat will drive them out of business.
The United States currently exports only around 15,000 tonnes of beef to Europe each year, a figure which could rise to between 300,000 and 600,000 tonnes after TTIP, according to France’s national trade association of livestock and meat producers (Interbev).
The US is the world’s largest producer of beef and with higher production costs, French farmers may struggle to adapt their model to the new competition — somehting which is putting French politicians on high alert.
“There will be absolutely no question of the agreement being ratified by national parliaments until this issue of livestock farming is addressed,” Bonnecarrère warned.
Negotiations between Washington and the European Commission began in June 2013, and the final deal will have to be approved by the national parliaments of the 28 EU Member States.
Overall, TTIP may bring benefits for certain parts of the agriculture industry, as well as for other sectors of the French economy.
In a report on the impact of TTIP on the trading relationships between United States and the EU, the World Trade Institute found that the agreement could be beneficial for SMEs, which suffer much more acutely as a result of regulation and trade barriers than do multinationals. Koen Berden, of the World Trade Institute, stressed that “90% of companies that export to the United States are SMEs”.
The study concluded that TTIP would boost French GDP by 0.3% per year, and would lead to a slight drop in prices as non-tariff trade barriers are removed. French exports to the United States could grow by up to 23%.
But here too, the impact will vary considerably depending on the business sector. “Certain sectors like transport equipment or machinery will benefit from TTIP, while others will not,” Berden said. “Contrary to the popular wisdom, French agriculture should also benefit,” he added.
“The overall impact of TTIP on EU exports to the US will be highly varied, between 5% and 121% depending on the member state,” Berden explained.
The battle of standards
The question of the mutual opening of public markets will be on the table for the next round of negotiations in Brussels. And beyond the issue of agriculture, France is also pushing for progress on the subject of non-tariff barriers.
“The major part of the negotiations hinges on non-tariff barriers to trade,” said MEP Franck Proust (EPP). “Standards are the most important point. If we manage to impose a unified set of American and European standards, it would be a huge gain in terms of competitiveness,” the MEP added.
This is one of the negotiation topics on which France “wants to focus all its strength”, according to Weymuller, in order to encourage the development of international standards based on the European model. “If we do not do it, others will do it for us; I mean the emerging countries.”
“There is no hurry. I don’t believe anything will happen for the next two years. The quality of the agreement should be our primary concern,” Proust concluded.
Negotiations between the US and the EU on the Transatlantic Trade and Investment Partnership (TTIP) started in July 2013.
If the treaty is signed, it will affect almost 40% of world GDP. Commercial relations between the EU and the United States are already among the most intense in the world, with an exchange of goods and services worth €2 billion each day.
World Trade Institute