USDA report shows how ag trade could benefit from T-TIP deal with the EU
By Bill Tomson
© Copyright Agri-Pulse Communications, Inc.
WASHINGTON, March 31, 2016 - The USDA is making a new push to drum up support for the Transatlantic Trade and Investment Partnership (T-TIP) deal being negotiated by the U.S. and EU with a new report showing falling farm exports to Europe.
The U.S. is importing record amounts of agricultural products from Europe, but report - compiled by USDA's Foreign Agricultural Service - finds that exports dropped 4 percent last year and part of the problem is EU tariffs that could be reduced by a successful T-TIP deal.
“While the United States had a $16 billion agricultural trade surplus with the rest of the world in 2015, it ran a record $12 billion trade deficit in farm and food products with the European Union, up 15 percent from 2014,” the report concluded.
U.S. agricultural imports from Europe rose to $25 billion last year, exports to the EU dropped to just $13 billion. While the strengthening dollar and low commodity prices was key to the expansion of the U.S. agricultural trade deficit with Europe, a completed T-TIP would help turn the situation around, the report said.
“While EU agricultural imports more than doubled over the past two decades, reaching a robust $126 billion in 2015, U.S. exports into the region increased at a slower rate - rising only 17 percent over the same period,” the report said. “U.S. exports of consumer-oriented products have been a key propeller of the growth, but European tariff and non-tariff import requirements and current global market conditions continue to challenge U.S. export growth to the EU.”
Not all U.S. agricultural exports to the EU are down. Shipments of soymeal, hides and skins and pulse crops dropped in 2015, but exports of wheat, beer, wine and tree nuts continue to increase, according to FAS data.
A statement released at the end of February by the Office of the U.S. Trade Representative after the most recent round of negotiations in Brussels, assured that progress is being made and a final agreement on T-TIP should be reached by the end of the year that eliminates or begins to phase out all tariffs.
“In October during our last round, we had a second exchange of tariff offers in which both sides agreed to liberalize 97% of their tariff lines, most of them immediately upon entry into force of the agreement,” the U.S. statement read. “This is a good start, but the United States remains committed to the goal of eliminating transatlantic tariffs under T-TIP. We look forward to working with the European Union in the coming months to achieve that objective.”
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