It is critical that U.S. agribusinesses are aware of how the application of European Union’s health and environmental standards to imported agricultural products may impact their exports to and from the EU.
By Cienna Reed and Harriette Thomas
As the third largest importer of agri-food products, the European Union (EU) aims to be a global leader in food sustainability through trade policy. The justification for implementing health and environmental standards on agricultural imports lies within the EU’s commitment to the UN Sustainable Development Goals. This initiative was developed through the European Green Deal’sFarm to Fork Strategy (F2F) and places the promotion of sustainable food systems at the forefront of the EU’s trading strategy.
In February 2022, the European Commission launched a public consultation to inform a report on the application of EU health and environmental standards to imported agri-food products, as requested by the Council of the European Union and the European Parliament during the negotiations of the EU’s Common Agricultural Policy. The report assessed the legality of applying health and environmental standards for agricultural products produced in the EU to those that are imported from elsewhere, a policy known as a “mirror clause.” If these new standards are enforced, they could majorly impact the future of exporting agricultural goods to the EU.
Regarding international trade, the recent initiative outlines how the EU can engage in strategic trade agreements that effectively require others to adopt their relevant standards. For instance, the EU is pursuing bilateral cooperation and trade agreements as opportunities to promote sustainable production in their partner countries. While abiding by WTO exceptions, this allows for the creation of preferential bilateral trade agreements with developing countries. The EU has commented that these ambitious standards are not self-serving, but rather working towards addressing global concerns in line with the One Health approach.
Process and production methods (PPM) refers to the way products are manufactured or processed and how natural resources are extracted or harvested (OECD). According to the report, the EU does not usually impose their PPM on imported products. While health standards are clearly maintained at high levels for human, animal, and plant protection, environmental and animal welfare standards vary by PPM in the country of origin. Historically, this has acknowledged and protected individual countries’ variability in agricultural practices, climate conditions, and agronomic challenges.
The feedback received from this public consultation acknowledges the urgency of addressing environmental and societal issues while emphasizing the potential consequences imposing EU standards on third countries could have on international agricultural trade. This feedback pointed out how the umbrella of EU non-tariff barriers, specifically with MRL regulation, could disrupt trade, create issues with market access, and enforce unjustified regulations. In particular, a member state crop protection association highlighted the Wageningen Economic Research Institute’s F2F Impact Assessment, which found that EU agricultural production could drastically decline and lead to a myriad of economic issues if these standards are adopted. This decline is expected to be brought on by the enforcement of an EU mirror clause in countries with different agronomic and climate conditions, plant diseases, pest variations, etc.
“The umbrella of EU non-tariff barriers, specifically with MRL regulations, could disrupt trade, create issues with market access, and enforce unjustified regulations.”
Feedback from another member state organization argued that MRL regulation is not the way to address the environmental issues of other countries and that these sovereign states themselves are best suited to assess the impact of pesticides on their environments and their respective PPM. Additional feedback from the private sector stated that if the EU were to regulate the PPM of imported products, they would be in violation of the General Agreement on Tariffs and Trade (1994), which aims to promote international trade by reducing or eliminating trade barriers. To justify a mirror clause under the GATT, the EU would need to ensure that they are not disguising protectionist policies as non-tariff barriers.
Essentially, the EU’s interest in enforcing a mirror clause policy
fails to consider individual countries’ food pressures and system
demands. This is particularly important for the future of import
tolerances for pesticides. In line with the F2F, applications for import
tolerance for pesticides that are no longer approved for use in the EU
would be determined based on health and agricultural practices as well
as global environmental concerns. In the public consultation, the EU
stated their intention to abide by the WTO and consider Codex MRLs when
promoting multilateral agreements. However, there is a lack of
assessments on how enforcing these standards could impact the food
systems and export economies of their trading partners. Despite
outlining how trade agreements will align with WTO regulations, the EU
clearly sees the potential for these new standards to require the
production methods of their trading partners to shift in response.