By Sara Wyant
While noting that the European Union is still an important market, U.S. soy exports declined by an astonishing 70% in quantity and 44% in value since 1998 due to discriminatory biotech labeling, renewable energy standards, and other policies, according to the American Soybean Association in a letter to the U.S.-EU High Level Working Group on Jobs and Growth. The decline in value is moderated only by the significant increase in the price of commodities that has occurred since 1998, ASA pointed out.
The Feb. 3 ASA letter was written in response to requests to identify policies and measures to increase EU-US trade and investment. The Working Group, led by US Trade Representative Ron Kirk and EU Trade Commissioner Karel De Gucht, was created after leaders attending a Nov. 28 2011 EU-US Summit meeting directed the Transatlantic Economic Council to find ways to support mutually beneficial job creation, economic growth, and international competitiveness.
“One of the primary reasons for the decline in U.S. soybean exports to the EU over the past 14 years is the imposition of regulations and legislation by the EU and a number of its Member States that have restricted access to the EU market for soybeans and soybean products derived from agricultural biotechnology,” ASA President Steve Wellman wrote.
“Failure to reverse or modify these measures has also resulted in adoption of similar regulations and restrictions on imports of biotech commodities by other countries, causing additional losses in U.S. soybean and soybean product exports,” he added.
Current and past U.S. Administrations have repeatedly raised concerns and objections with EU officials regarding the incompatibility of the EU’s biotech regulations and legislation with its WTO obligations, but to little avail. In 2003, the U.S. filed a case with the World Trade Organization challenging the EU’s de facto moratorium on approving new biotech events.
“Despite prevailing in this case and a subsequent appeal, the U.S. has seen only marginal improvement in the transparency and timeliness of EU biotech approvals. In addition, 20 U.S. trade associations requested the last Administration in November 2003 and the Obama Administration in 2009 to file a WTO case against the EU’s traceability and labeling regulation as a violation of its SPS and TBT obligations under the Uruguay Round Agreement. No action has been taken to date in response to these requests,” ASA wrote
Wellman said that U.S. soybean producers are also very concerned about implementation of the EU’s Renewable Energy Directive (RED).
“The RED inaccurately represents the greenhouse gas emissions reduction attributable to the use of biodiesel derived from U.S. soybeans, which would disqualify biodiesel from the EU’s biofuel use mandate and tax benefits provided by EU Member States. The RED also would require that U.S. soybeans and other biodiesel feedstocks be certified to have been produced in compliance with an arbitrary set of sustainability standards. This requirement fails to take into account the compliance of U.S. crop production systems with national conservation laws that meet or exceed the RED standards, and would severely disadvantage the competitiveness of U.S. soybean exports to the EU,” according to the letter.
ASA and other private sector organizations have formally requested that DG-Energy revise its greenhouse gas emissions savings value using U.S. data that would qualify U.S.-based biodiesel for EU biofuel benefits and use mandates. We have also worked closely with the U.S. Department of Agriculture and USTR to develop and implement a strategy under which DG-Energy has agreed to enter into bilateral negotiations on treating U.S. feedstock production on an aggregate basis for purposes of complying with the sustainability requirements of the RED.
“Until such an agreement can be reached and implemented, we are presenting information relative to U.S. conservation laws and practices to industry and government officials in key Member States and requesting that imports from the U.S. continue to be accepted on an interim basis,” Wellman continued. “As with the EU’s biotech policies, raising the potential loss of the U.S. soybean market due to implementation of the RED is a critical priority for the U.S-EU High Level Working Group on Jobs and Growth.”
For a copy of the full letter click here.
Recommendations to the Working Group are due by April 23. The Working Group will provide an interim report in June with a final report by the end of 2012. This could include a range of initiatives, from enhanced regulatory cooperation to negotiation of one or more bilateral trade agreements addressing issues raised by the Working Group.
By Sara Wyant