WASHINGTON, July 20, 2016 - While the United Kingdom’s
decision to withdraw from the European Union isn’t likely to have much effect
on the global food system, over time it could make it more difficult for the
United States and the EU to find common ground on biotechnology and other food
trade issues. The first noticeable impact could be in the current negotiations
on the Trans-Atlantic Trade and Investment Partnership (T-TIP). The talks so
far have made little progress and encountered “serious obstacles in agriculture
and food,” says Benno van der Laan, a former European Commission executive now
at Greenhouse Communications in Washington.
Without U.K. leverage, EU negotiators are likely to be more
responsive to domestic pressure to resist U.S. efforts to gain acceptance of
biotechnology and other risk-based U.S. food safety procedures. “NGOs (non-governmental organizations) in Europe have had success
with anti-T-TIP campaigns in several countries,” van der Laan told a Farm
Foundation forum last week.
EU decision-making likely will be affected by the loss of
the U.K. “voice,” he said, because London has generally favored “free markets,
new technologies and science-based decision-making” that are parallel to U.S.
agricultural imperatives. He suggested that, without the U.K., it would become
more difficult for “market access issues such as new biotech approvals for
imports, authorization of crop protection products and import tolerances.”
In addition, he speculated that the EU’s trade negotiators
may be diverted from T-TIP and other bilateral talks in order to focus on a new
trading arrangement with the U.K. “Negotiations for a future deal could be
complex, resource-intensive and time-consuming for both” the EU and U.K., he
said. “The goal of a (T-TIP) deal before the U.S. elections is probably
unrealistic.”
“Scary as it is for the British and the Europeans, it (Brexit)
poses no real risk for the global food system,” said Michael Dwyer, chief
economist of the U.S. Grains Council. “This will be a ripple. It will barely
make a dent in the global food system when you diffuse that across a huge system.” While the vote roiled currency and equity
markets for a few days, he said, “I do not expect this level of chaos to continue
much longer.” Dwyer’s larger concern is that the political climate could be
contagious, encouraging anti-EU forces in other European countries to abandon
the union.
John Dardis, senior vice president for U.S. corporate affairs
for the Ireland-based dairy and food giant Glanbia, said, “The bottom line is
nobody knows what’s going to happen” hereafter. “The effect is a quite scary,”
he said. “A fundamental tenet of the EU internal market is free movement of
people and Brexit has said we don’t want that.” Dardis suggests that global
companies will ask whether the “tea leaves of a protest vote” could be an omen
for the U.S.
Skepticism about prospects for T-TIP was echoed in an online
statement by the International Dairy Foods Association (IDFA). The Brexit vote
“undoubtedly raises a lot of questions about the current state of trade
negotiations,” it said. “Although the U.K. has two years to negotiate its
withdrawal from the EU, it will no longer be involved in decision-making
activities.” IDFA said that the uncertainty would make it “likely that T-TIP
talks will cease for now while the EU focuses its efforts on consequences
stemming from the UK’s exit.”
A June 22 letter sent by most of the major farm and agribusiness
groups to the Secretary of Agriculture and the U.S. Trade Representative
illustrated the obstacles to successful completion of T-TIP negotiations. The
letter urged the administration to reject a “T-TIP-lite” agreement without
strong agricultural provisions, saying it “would do much more harm than good.”
The letter cited a March 31 report by USDA’s Foreign Agriculture Service that the
United States ran a record $12 billion trade deficit in farm and food products
with the EU in 2015, up 15 percent from 2014. A large share of the deficit is
in wine and dairy products. U.S. companies shipped about $100 million to the EU
but imported about $1 billion worth to the United States.
#30
