The Transatlantic Trade and Investment Partnership (TTIP), the controversial trade deal being negotiated between the EU and the US, is both a vast opportunity and a significant risk to companies in the food industry, according to Dominic Watkins, partner at London-based business law firm DWF.
“Vast” opportunity
Watkins, who was speaking at last week’s Sustainable Foods Summit in Amsterdam, said that the deal had “the power to change the playing field for us all” by removing trade barriers, making the EU and US systems more compatible and equalising technical barriers to trade.
The deal was a “vast opportunity” for EU companies, he said, referring to 2012 statistics showing an EU trade surplus with the US of €6bn. Only 8 per cent of EU agricultural imports come from the US, he added, while 13 per cent of EU exports cross the Atlantic.
“Large companies will benefit most from the deal as they are more likely to be cross-border,” he said. “But the EU’s analysis suggests that SMEs could also benefit considerably.”
“Significant” risks
However, he warned of the “significant” risks involved, including the agreement’s effect on geographical indications – one sticking point in the negotiations and one that impacts on many fresh produce companies, since almost 30 per cent of registered foodstuffs are fruit, vegetables and cereals.
Watkins also highlighted the danger of regulations being harmonised downwards, especially regarding environmental protection, pesticide use and genetically modified organisms (GMOs), for which there is no labelling requirement in the US. In the EU, there is a mandatory labelling requirement, and only 100 per cent GMO-free food can bear a “GMO-free” label.
Such fears appeared to be well founded last month when documents were released showing that the EU had dropped laws on pesticides linked to cancer and male infertility following pressure from the US over TTIP.
Amarjit Sahota, president of conference organiser Organic Monitor, suggested the increased competition anticipated from TTIP could put EU companies at a disadvantage.
“Production costs in the US are a lot lower,” he said. “So if they don’t raise regulations up to the EU level, that could spell trouble for EU farmers.”
“Huge” chasm
Watkins equally touched on the gulf between the health claims that are acceptable in each region. In the US, he said, the following statement is legal: “Low fat diets rich in fiber-containing grain products, fruits and vegetables may reduce the risk of some types of cancer”.
In the EU, by contrast, a company can only claim that such foods “increase faecal bulk, changes in bowel function, reduction in intestinal transit time”.
“There is a huge chasm between what you can say,” he said.
The deal appears to have created a similar chasm between political parties as well as between governments and the people. A debate and vote in the European Parliament were postponed this week after the session descended into chaos – a reaction, many believe, to the huge public opposition to TTIP.
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